Admitting mistakes, crafting compromise, being flexible and understanding marketplace dynamics are vital ingredients for succeeding in business. Some recent examples of wise decisionmaking:
* The New York attorney general's office showed prudence by offering a Medicaid billing fraud settlement that Staten Island University Hospital couldn't refuse. The record $84 million settlement was harsh, but it allows the teaching hospital 20 years to pay off its debt. Without the lengthy payback schedule, Staten Island's balance sheet would have taken a potentially life-threatening blow.
* Crozer-Keystone Health System, one of the first providers to contract directly with Medicare beneficiaries, will not renew its contract with HCFA. While the suburban Philadelphia system will draw criticism for its aggressiveness and seeming inability to manage managed care, its decision to pull out of the Medicare HMO market makes good business sense. Crozer-Keystone has a razor-thin profit margin, and its Medicare HMO plan lost millions. The plan's patient mix and reimbursement levels left little chance of its reversing its financial fortunes.
* In the past, the American Hospital Association has been slow to make decisions that buck the status quo. But by forming a joint venture intended to help its members tap into alternative medicine, the AHA is responding to consumer demand for unconventional therapies. More than half of the $21 billion consumers spend each year on alternative medicine is out-of-pocket, which offers AHA members a much-needed shot at bolstering the bottom line.
* Like many trade group boards, the Catholic Health Association's directors typically are senior executives of member healthcare organizations. While the CHA has talked about the need for ethnic and racial diversity on its board, most of the trustee requirements have worked against change. Now, a diversity committee has recommended that the CHA make a special effort to recruit board members from not only the top levels of management but among individuals who may be fairly new to Catholic healthcare.
Achieving diversity often requires an overhaul of the business-as-usual philosophy that permeates organizations. As the Rev. Michael Place, CHA President and Chief Executive Officer, acknowledges, "We have a way to go, but we have made the first cut." The next cut is up to the CHA's nominating committee.