Although many healthcare organizations own various components of the healthcare continuum-including hospitals, physician practices and managed-care plans-most still fail to think and act like a unified company.
"Instead of thinking how to make internal trade-offs, (each component of the business) believes it has to make money and internally argues with the others," says Dennis Patterson, chairman of IMC Research Institute, Los Angeles. "Integrated systems must think about ways to change that behavior."
Using a model borrowed from General Electric Co., which owns a variety of diverse businesses ranging from GE Capital to the NBC television network, Patterson will outline steps to unite various healthcare business into a successful enterprise during the session "Enterprise-wide Thinking," set for 10: 30 a.m. to noon Monday, June 21.
According to Patterson, an enterprise is a group of organizations that through common ownership or a strategic alliance brings more value to the community than they could as separate organizations. But, he says, many healthcare organizations build the enterprise before they think it through.
"Most people don't spend a lot of time thinking when they bring these pieces together," Patterson says. "They don't think about the vision: Why are we together? How can we bring greater value than we could separately? Everyone inks the deal with a different perspective of what they think they would get out of it. Doctors don't want a cut in income. Hospitals want referrals. It's like getting two families together to talk about politics or religion."
In bringing together separate businesses to form an enterprise, the first step must be to form a common vision and then build a governance structure to fit that vision. Another step in the process is to alter the compensation and incentives offered to employees.
"Vision statements and compensation plans often have 180-degree differences," Patterson says. "Reward people for the enterprise, not for their individual business pieces." When hiring and awarding employees, healthcare organizations must also take into account competencies such as being a team player, not just clinical skills, he says.
Only after the vision, governance structure and incentives are aligned, can the healthcare system begin to adopt clinical changes, he says.
"If you haven't realigned those first three aspects of it, then the organizations are not ready to change," Patterson says. "You need to figure out how the enterprise as a whole can deliver the greatest-quality care at the lowest cost. That's especially true in a managed-care and capitation market where everyone's cost-centered. You should divide (costs throughout) your enterprise."
Finally, to create a successful enterprise, a healthcare system must measure outcomes "around the value of the vision," Patterson says.
"Just as you measure financials each quarter, you should also track health-status information in the community," he says.