Outline Health Care Reform and Environment Changing Culture for - PDF document

Outline – Health Care Reform and Environment Changing Culture for Success in a White- – Transforming Your Organization Water Environment: – Readiness for Change Leading and Managing Change – Strengthening the Culture Presented by John F. Tiscornia, MBA, CPA – What to do? Estes Park Institute Senior Fellow Health Financial Planning & Governance 2 The Healthcare Reform legislation and private sector trends The Healthcare Reform legislation and private sector trends will have a profound effect on healthcare providers: will have a profound effect on healthcare providers: – Don Berwick, head of CMS says: – Immediate reductions in reimbursement to hospitals and physicians – Focus on purchase for value – not volume! • Better patient care • Better health care • Outcomes and quality • Lower costs • Bundled payments • ACO – Prevalence of mergers, acquisitions and affiliations – Transition from volume-driven fee-for-service to value-based. • Swedish Health Services and Providence Health and Services Insurance – Financial penalties for poor quality outcomes • Southwest Washington Medical Center and PeaceHealth – Private sector moving independently to control rising cost of • Jewish-St. Mary’s and University of Louisville healthcare • West Penn Allegheny and United (Insurance) – Measurement of Quality and Transparency 4 3 Business Model Transition What will it take to navigate the white water? Fee for Service Business Model Global Payments Risk Model Revenue & Income Hospital Diagnostics Sources Expense Hospitals Diagnostics Centers Incentive Structure Transition 6 5

Leading the Transition Curve 1 – All about volume – Reinforces silos Leadership – board, management and clinical – Little incentive for real leaders– need to make their organization more integration Curve 2 Curve 2 Curve 2 ‘change-ready’ and be able to develop a culture of Performance Performance Performance Curve 2 – Shared saving program accountability for performance. – Bundled payments – Value-based reimbursement Curve 1 Curve 1 Curve 1 Natural Trajectory Natural Trajectory Natural Trajectory – Rewards integration, quality, outcomes, and efficiency Time Time Time 8 7 Eight Steps to Transforming Your Organization Eight Steps to Transforming Your Organization 1. Establishing a Sense of Urgency 5. Empowering People in the Organization to Act on the Vision 2. Forming a Powerful Guiding Coalition 6. Planning for and Creating Short-Term Wins 3. Creating a Vision 7. Consolidating Improvements and Producing Still 4. Communicating the Vision More Change 8. Institutionalizing New Approaches and a New Culture Source: John P. Kotter; Harvard Business Review, March-April 1995 9 10 Assessing the Organization’s Readiness for Change Assessing the Organization’s Readiness for Change 7. Does the organization use specific measures to assess 1. Is the change effort being sponsored by senior-level business performance? executives? 8. Does the change effort support other major activities 2. Are all levels of management committed to the change? going on in the organization? 3. Does the organization culture encourage risk taking? 9. Has the organization benchmarked itself against world- 4. Does the organization culture encourage and reward class companies? continuous improvement? 10. Do all employees understand the customers’ needs? 5. Has senior management clearly articulated the need for 11. Does the organization reward individuals and/or teams for change? being innovative and for looking for root causes of 6. Has senior management presented a clear vision of a organizational problems? positive future? 11 12

Change Dependent Upon Culture Assessing the Organization’s Readiness for Change 12. Is the organization flexible and cooperative? – Underlying qualities that make an organization 13. Does management effectively communicate with all levels ready and able to change is a change in culture. of the organization? – The change is one from a culture of entitlement to 14. Has the organization successfully implemented other one of accountability. change programs? – To be successful, a change to a strong culture is 15. Do employees take personal responsibility for their necessary at all levels within the organization: behavior? Board, Physicians, Clinicians, Management and 16. Does the organization make decisions quickly? staff. SOURCE: Based on the discussion contained in T.A. Stewart, “Rate Your Readiness to Change, “Fortune, February 7, 1994, pp. 106-10 13 14 What do we mean by “culture”? How do you change/strengthen culture? – Communicate and discuss culture, mission, values, vision – Organizational culture drives actions, beliefs and values • What do you want the organization to be like? that guide the behavior of its people and the way it • How do you want people to act in the organization? conducts its business – Create a felt need for the new way of doing things, a sense of urgency, make a case – It is the personality of an organization – Translate the culture into specifics, e.g., expected behaviors, norms. – It defines the “way we do things around here” – Model the culture and desired behavior; recognize others who do . – It is the shared practices, behaviors and beliefs of the – Create incentives that promote the culture organization • Performance appraisals • Incentive compensation • Who gets recognized and rewarded 15 16 How do you change/strengthen culture? How do you change/strengthen culture? – Measure the culture • Staff surveys – Simple core theme • Patient feedback • “Our patients come first” • Internal audits – Leadership; Time; Persistence – Recruit people who fit the culture – Logo; symbols; visual representations – Training and development for leadership: boards, management, – Job enrichment; job rotation clinicians and staff – Put the organization in a position to be held accountable – Celebrate the examples and successes – Orientation, socialization – Reorganize • Clinical/service line vs. functional structures • Cross-functional communication and teams 17 18

CHANGE IS COMING! WILL YOU BE READY??? 19