Chapter One
Office-Level Healthcare Leaders: Who They Are and What They Do

1.1 A Brief Introduction

The healthcare field contains a diverse array of corporations that do everything from producing and selling durable medical equipment (DME) to providing on-the-spot emergency care. Additionally, these companies can range in size from small “mom and pop” operations to large, multiregional or even multinational entities, which employ tens of thousands of people. The same can be said for the leaders who work in this field. They might perform any of a myriad of tasks and possess a varied array of skills. Depending on their job descriptions, these men and women might only supervise a few employees, or they may, at least indirectly, manage thousands of workers. At the same time, these leaders might spend their time on the frontlines, in corporate offices, or shifting back and forth between these two areas.

While acknowledging this diversity, I will touch on some key points that I believe distinguish almost all healthcare leaders from other employees. I will delineate the different levels of leadership, running the gamut from the chief executive officer (CEO) to the frontline managers. Next, I will show readers where I think office-level healthcare leaders fall within this hierarchy of positions. Finally, I will demonstrate why I believe that the aforementioned individuals are a healthcare organization’s most important employees.

Given the important roles that office-level healthcare leaders play in helping their organizations to succeed, I find it surprising that many companies devote few resources to training these managers and professionals to become good leaders. Instead, large numbers of administrators are left to fend for themselves—to learn what they can from their everyday interactions with employees and from their life experiences. That might be okay if these individuals imbibed proper management techniques in school (K–12 or college) or through other sources; however, I will demonstrate that, in many cases, they do not get the needed training.

Some office-level healthcare leaders, despite these training deficiencies, will develop into good or great leaders. However, a sizeable portion of this cohort will display at least some suboptimal management traits, and a number of these individuals will fail to master even basic management concepts. In Chapter 2, I will discuss this topic in more detail. As a part of this conversation, I will show how the latter two groups’ lack of administration-related skills might be negatively impacting their own and their organizations’ efficiency, effectiveness, and relationships with key stakeholders.

In Chapter 1, I discuss some of the key reasons why healthcare organizations often do not devote enough attention to properly training their office-level healthcare leaders. I also highlight some potential factors that might lead administrators to use poor management techniques even when they are aware that these methods are not the optimal ones. As part of this process, I spend a significant amount of attention on one potential driver of this phenomenon. It relates to the fact that, at least until recently, many healthcare professionals did not have any incentive to learn and utilize best practices leadership techniques because they could get by with being, to use an old cliché, “just good enough.”

In the final part of this chapter, I briefly touch on some of the key factors that, over the past few decades, have been exerting an ever increasing amount of pressure on healthcare organizations to become more efficient and effective. As the healthcare industry adapts to this changing landscape, more of its executives are espousing corporate cultures that center on the use of best practices management techniques. Ergo, a large number of current and future office-level leaders will soon have to learn to utilize these leadership methods if they want to succeed in the 21st century healthcare workplace. Why not start now? As a corollary to this discussion, I will include references to continuous improvement (CI) and Lean Six Sigma throughout this chapter. All of the points that I have made with reference to leadership also applies to the healthcare industry’s adoption of these approaches. Later in the book, I will focus more attention on CI techniques and especially on Lean and Six Sigma.

1.2 Healthcare Leaders: A Definition

Before I begin to describe office-level healthcare leaders, I first have to define what I mean by the term: “healthcare leader.” For the purposes of this book, I will delineate this type of employee as anyone who, according to a statement from the University of California, Berkeley’s (UCB’s) human resources (HR) department, “exercise[s] independent judgment in determining the distribution of work of at least 2 FTEs [full-time equivalents]” (UCB HR, n.d.). I would add to this definition by stating that healthcare leaders must possess the company-sanctioned ability to give direct orders to subordinates. They cannot rely solely on indirect means, such as audits or general recommendations, to manage workers’ duties. At the same time, these individuals should also have at least partial control over decisions relating to employee motivation and discipline. With that said, healthcare leaders do not necessarily have to maintain continuous oversight over any particular group of individuals; they might find themselves leading one team of people today and managing a different batch of men and women a short time later. Finally, for the purposes of this book, I will not try to differentiate between managers and leaders. In fact, I will often use those two words interchangeably.

In using this definition, I can eliminate some stakeholders who have quasi-supervisory roles or who manage via indirect means. One of the more important classifications of people who would fall into this area include auditors, accreditors, and other regulatory personnel. These men and women can exercise a great deal of ancillary control over a healthcare organization’s staff; however, they usually do not possess any direct administrative powers. Additionally, some senior-level frontline employees might fall into this category. As a result of these individuals’ experiences or knowledge, they may be able to exert influence over their peers; however, they do not have any company-sanctioned oversight roles. I would also include in this discussion a large number of support-level employees, such as many HR personnel, when they are limited to making recom mendations as opposed to giving commands—even if workers usually follow their advice (Fallon & McConnell, 2007, p. 27). Finally, my definition of leadership would exclude some staff who have supervisory titles, including many team leads and team leaders, if they almost exclusively focus on monitoring employees’ compliance with rules or in evaluating whether or not these people meet monthly goals (and reporting their findings back to their department managers).

1.3 Healthcare Leaders: A Significant Part of the Workforce

By many estimates, a relatively sizeable minority of healthcare staff perform management-type tasks. For instance, some researchers believe that almost 25 percent of American workers “supervise others as a major part of their job[s]” (Murray, 2010, loc. 295). Using this figure as a guide, one would find that more than four million men and women in the health services industry alone perform leadership-type functions as a part of their employment responsibilities (Bureau of Labor Statistics [BLS], 2015a). This figure excludes a large number of individuals who work in healthcare but are not employed by companies, such as hospitals, nursing homes, home health agencies, and doctors’ offices, which provide some type of direct patient care. Even using more conservative estimates, one would still find that hundreds of thousands of health-care staff have company-sanctioned leadership roles (BLS, 2015b). Any way one parses the data, he or she will attest to the fact that a large number of people in the healthcare industry shoulder supervisory tasks as part of their job descriptions. What is more, they can be classified into a number of different employee-related groupings.

1.4 Types of Healthcare Leaders

As I noted in the previous section, large numbers of healthcare workers shoulder some leadership-related tasks as part of their jobs. One can divide these individuals into a number of different classifications. I will spend a great deal of time talking about one such group—office-level healthcare leaders. However, before I begin that process, I think it is worthwhile to briefly describe the basic management levels. To simplify matters, I will assume that the companies in question do not have subsidiaries or control multiple facilities.

  • The CEO: This individual is the highest ranking executive in the company. He or she “take[s] overall responsibility for leading and managing a company’s operations” (Linton, 2016). Among other things, the CEO will work with staff to help craft overall strategy, to manage stakeholder relations, and to oversee key initiatives (Linton, 2016). As a part of the process, this person takes ownership of the rules and regulations governing his or her employees. Many of these leaders primarily interact with upper-level supervisors and external stakeholders; however, a CEO can theoretically issue direct orders to any staff member. In my experience, CEOs of small companies will sometimes actively intervene in the day-today affairs of department managers.
  • The C-Suite (Upper Management): This group, which includes the CEO, consists of the “organization’s most senior executives” (Linton, 2016). Healthcare companies will differ from each other with regard to whom they include in this inner circle; these corporations will also vary in how they refer to (what name they give to) each job title. However, the usual entries include, in some form or another, the chief financial officer (CFO), the chief operating officer (COO), the chief marketing officer (CMO), and the chief information officer (CIO) (Linton, 2016). Many hospitals and other clinical providers will also employ a chief medical officer (CMO), a chief nursing officer (CNO), and a chief legal officer (CLO). In large companies, several layers of management-level personnel might stand between a c-suite executive and the frontline staff under his or her control. However, at smaller healthcare organizations, the executive might only have one manager—and sometimes no one at all—who acts as a liaison between that person and first-line employees.
  • Middle Management: The individuals are aptly named. They take orders from at least one higher-level supervisor (not the CEO) within the company. At the same time, these administrators have authority over “at least one subordinate level of managers” (Business Dictionary, 2016). In my experience, healthcare organizations, depending on their size and scope, might possess several layers of middle management; many of these men and women will have almost no contact with first-line staff. Alternatively, these leaders might spend significant amounts of time working with customers or directly interacting with frontline employees (Henricks, 2007).
  • Front-Line Management: I have heard businesspeople, in healthcare and in other industries, use one of several terms to describe this group, including first-line managers, frontline managers, lower-level managers, and first-level managers. Regardless of what executives call them, these leaders sit at the bottom of the administrative totem poles at their respective organizations. They directly supervise the frontline employees or teams in both clinical and non-clinical settings. At the same time, these individuals report to one or more supervisors (Fallon & McConnell, 2007, p. 252).
  • Professionals with De Facto Management Responsibilities: The health-care industry is different from many other fields in that some of its professionals also possess de facto leadership responsibilities. For instance, doctors and, in some cases, nurse practitioners not only directly care for patients but also often supervise nurses, physician assistants, certified nursing assistants, and other caregivers. They sometimes possess this right even when they do not directly employ these staff members. As a case in point, a surgeon who has privileges at a hospital, and is performing an operation on a patient at that facility, will often have authority over the institution’s employees who are helping him or her perform the surgery.

1.5 Healthcare Leaders Are a Diverse Group of People

In the previous section, I briefly outlined some of the key leadership levels that one can find in healthcare organizations. However, as anyone who has worked in the field can attest to, many of these supervisors do not fit neatly into any one category. For instance, in smaller companies, c-suite level executives might supervise frontline workers. As noted earlier, many middle managers also perform first-line tasks. At the same time, one cannot always look to an employee’s title to determine the individual’s place in the organizational hierarchy. That is because, at least in my experience, each company will assign different values or meanings to these designations. In many instances, the powers conveyed by these honorifics will be relative to a specific department within a company. As an example, an administrator of a large department might act more like a middle-level supervisor. He or she may not have any first-line duties. Instead, this person will oversee several assistant managers, who will be the ones to actually supervise the frontline staff. In other instances, a department head might directly manage the first-line employees, but he or she will have little to no autonomous decision-making powers. Instead, the individual’s primary task will be to enforce highly detailed company-related policies, which have been created by higher-ups (or by an agreement between a union and management).

At the same time, healthcare is an extremely diverse field. Many of the organizations that are part of this industry have very little in common, except for the fact that they participate—in some way—in keeping people healthy or in helping them to get well. For instance, an organization that sells DME would have little to no experience in directly caring for sick patients. Following this logic, individuals at different companies might be on the same supervisory level but perform radically different tasks. As I have seen firsthand, one can even find this type of divergence between management tasks within individual healthcare firms—especially ones that contain both clinical and non-clinical elements.

1.6 Where Do Office-Level Healthcare Leaders Fit In?

Even given this diversity, healthcare leaders, at every level and in each field, share some key things in common. As I stated previously, all of these people devote at least some time to managing other individuals. In its simplest sense, this means that they have company-sanctioned authority to issue orders to subordinates. At the same time, these supervisors expect their staff to follow directives. As a corollary to this principle, most healthcare leaders, at least the ones I know, have at least a modicum of power to discipline the employees who are under their control. Many business experts would also argue that a healthcare administrator (another term I will use for a healthcare leader) must also possess some authority to “set goals for each member of the group” (Murray, 2010, loc. 246) that he or she manages. At the very least, the supervisor should have some say over how his or her team goes about meeting its goals (Murray, 2010, loc. 246). One can point to other traits that most leaders share in common; however, those are the ones that are key to the discussions in this book.

I view office-level healthcare leaders as people who possess leadership responsibilities, which center on supervising, motivating, and disciplining employees. At the same time, they need to have some control over the establishment of team or department objectives. Additionally, the people I have in mind should spend most of their time overseeing frontline employees. Ergo, my definition of office-level healthcare leaders will include most first-level managers. However, using my definition as a guide, a significant number of professionals with de facto power and a smaller portion of middle managers will also fall into the “office-level healthcare leader” category if they devote a sizeable portion of their time to directly supervising frontline staff.

1.7 Office-Level Healthcare Leaders: The Most Important Cogs in the Corporate Wheel

I think many corporate executives, regardless of the particular field that they work in, would state that their company’s most cherished asset is its workforce. This is especially true in healthcare, which is a “labor-intensive industry” (Sultz & Young, 2014, p. 299). To wit, hospitals, doctors’ offices, nursing homes, and other providers need to employ large numbers of people in order to provide clinical care to their patients and residents (Sultz & Young, 2014, p. 11). These organizations, at least at this time, cannot relegate most of these hands-on tasks to machines. Additionally, almost all healthcare companies, regardless of the services or products they provide, need to employ people in sales, accounting, revenue cycle management, information technology (IT), and the like. In fact, according to one source, “more than 50% of [a healthcare organization’s] costs are connected to staffing” (Cleverly, Song, & Cleverly, 2011, p. 259).

In short, healthcare organizations depend upon their employees to help these companies meet their obligations to investors (in the case of for-profits), patients, clients, and other stakeholders. As a result, office-level leaders, including first-line managers and professionals with de facto power, play pivotal roles in ensuring that their firms succeed (or fail). These administrators are an indispensable part of any healthcare organization because they are the ones who directly manage the frontline workers. In this role, they help to ensure that the company’s employees create products or deliver services to stakeholders in an effective and efficient manner. Additionally, as Fred Hassan notes in a Harvard Business Review article, these managers “represent an all-important feedback loop that allows the CEO to stay abreast of the latest developments in the business” (Hassan, 2011, n.p.). Although a healthcare organization’s frontline staff might serve as its ears on the ground—noting any important external developments—it is the office-level leaders who usually make sure that these observations get to the higher-ups.

1.8 The Three Interrelated Elements: Best Practices Management Techniques, a People-Focused Culture, and CI Methodologies

Throughout this chapter and the next one, I focus much of my attention on the use of best practices leadership styles, which center on people-focused management techniques. I decided to begin my narrative with this topic because I believe that healthcare supervisors need to utilize participatory management methods if they want to foster office environments that support the implementation of CI philosophies. As I will explain in detail later in the book, CI systems work best when staff are self-confident, engaged, satisfied with their jobs, team players who possess some degree of autonomy, and accepting (at least to some degree) of change. In my experience, administrators who adhere to humanist leadership philosophies are more apt than their more autocratic peers to oversee workplace cultures in which the majority of employees possess the previously mentioned traits and capabilities.

1.9 Healthcare Organizations Often Do a Poor Job of Training Office-Level Leaders

Most readers would probably agree that office-level leaders play very important roles in helping to keep their companies running effectively. Given that fact, I find it surprising that many organizations, in both healthcare and in other fields, do not provide newly crowned administrators with much if any management training. Too often, firms take a “next person up” approach; they will simply call on the most senior employee in the department to fill an open managerial position. Even in cases where a worker with some management-type experience, such as a team lead, takes over the job, that individual is still often unprepared to handle all of the aspects that go along with being a leader. I am not the only one who has observed these practices. Many other researchers bemoan the lack of management training for newly promoted frontline supervisors (Belker, McCormick, & Topchik, 2012, p. 5; Murray, 2010, loc. 110).

Perhaps more worrisome, many healthcare organizations, especially smaller ones with limited resources, do not provide management-level training or offer other developmental opportunities to their experienced office-level leaders. Instead, at least in my experience, these companies expect administrators—both new ones and seasoned veterans—to develop these skills over time, as part of these people’s daily interactions with their subordinates. One could refer to this type of training as a sort of trial by error system. Professionals with de facto power have traditionally operated under the same type of on-the-go learning system. Making matters worse for this group, many of their cultural motifs have, at least traditionally, adhered to paternalistic notions that run counter-current to best practices management styles (Ficarra, 2010; Fitzgerald et al., 2013, p. S25; Nasca, Weiss, & Bagian, 2014, p. 992).

In my experience, even many of the healthcare organizations that have created training programs for their office-level management staff (and sometimes for the professionals with de facto power as well) do not offer enough real-world instruction. Instead, these companies posit ideal scenarios, which administrators will rarely encounter in normal day-to-day office environments. In other instances, firms might give their supervisors real-life situations (via case studies or scenario-based exercises) to work through, but they do not show these people how they can translate the lessons learned from this one experience to other situations. At the same time, in my experience anyway, the educators too often assume that managers operate in silos—making decisions based solely on their particular department’s needs. These coaches provide flawed advice because they do not consider the ways in which interdepartmental, as well as external, cultural, and economic factors might impact an office-level healthcare leader’s decisions.

1.10 A Case In Point: What Does One Do with a Well-Connected but Troublesome Employee?

As a case in point, most management-related materials that I have seen provide department managers with similar advice regarding how to deal with an employee who lacks the skills, the temperament, or the work ethic necessary to perform a certain job. They suggest that the supervisor first try to work with the individual to correct his or her problems. If the person’s behavior or performance does not improve after a certain period of time, then the office-level leader should initiate a series of steps that lead to the firing or dismissal of this underperforming or ill-tempered staff member (Fallon & McConnell, 2007, pp. 256–259; The HR Specialist, 2017).

That process works much of the time; however, in some cases, the employee in question will have powerful friends in upper management. For instance, the individual might be a close acquaintance or blood relative to a director, a vice president, or even the CEO of the organization. As a result of this fact, the worker is, for all intents and purposes, “untouchable.” In these situations, the supervisor risks damaging his or her career by firing or dismissing the troublesome or underperforming staff member. What does this office-level leader do?

I have been faced with this type of scenario, and it probably happens all of the time in the business world. It represents just one of many complex, difficult situations that real-life office-level healthcare supervisors and professionals with de facto power have to deal with on an everyday basis. Many training manuals and healthcare-related management books do not delve into these topics. Even when the texts do look at these real-world scenarios, they do not provide readers with satisfying answers or with solutions that these leaders can use in their offices and clinics.

1.11 Many Office-Level Healthcare Leaders Do Not Learn Proper Management Skills in School

One could perhaps forgive corporate America for not doing enough to train its office-level supervisory personnel if these individuals learned best practices management skills during their K–12 schooling or while in college. However, many of the people who serve in frontline administrative positions do not procure proper leadership techniques during this period. For example, most business experts encourage administrators to forego authoritarian management styles (at least in most instances) in favor of more participatory approaches (Belker, McCormick, & Topchik, 2012, p. 110). However, when I was growing up, many of the instructors and administrators who I knew utilized primarily autocratic teaching methods. Faculty members told students what to do and assessed these individuals based on how well they listened to their instructors’ lectures or memorized the textbook-based lessons. Most of the books—at least early on in my schooling—stated what was fact and what was fiction; these texts did not allow students to develop their own ideas on the matter. I have talked to numerous other people from many different places and economic circumstances; most of them, at least on some occasions, had to deal with the same type of autocratic school-related structures.

To be honest, most instructors—at least in grade school and in middle school—probably have to utilize somewhat autocratic methods. These teachers must get students to learn incontrovertible theorems, such as 6´6 = 36, where there is only one right answer. At the same time, lecturers would lose total control of their classrooms if they allowed the schoolchildren to exert too much freedom. For instance, one might find it difficult to utilize participatory management techniques when working with kindergartners. That being said, people learn behavioral skills and practices by following the examples of teachers and others who were influential during their years of maturation. And many autocratic methods that might be optimal for controlling a fourth-grade classroom do not work as well when one wants to use them to manage a hospital’s finance department.

Some of these students might obtain the necessary leadership training if they attend college; however, most of the university grads that I have come into contact with do not learn best practices management techniques. That is because the majority of people graduate from an institution of higher education with specialized degrees in IT, nursing, medicine, and the like. They might learn a lot about the subjects they are majoring in, but they do not receive much in the way of leadership training. I have also known many healthcare administrators who majored in a humanities- or fine arts–based subject. Having one of these degrees myself (in history), I can personally attest to the fact that one does not develop adequate leadership skills from studying great authors, philosophers, or historians. Granted, many of these students might have held administrative-level positions in a college organization; however, they are no more likely to learn the correct methods for supervising people than is an employee of company that thrusts him or her into a management position with little formal training.

1.12 From a Healthcare Organization’s Perspective: Allowing Administrators to Stick with Suboptimal Leadership Practices

In Chapter 2, I will compare and contrast effective, efficient management styles with less productive ones. Suffice it to say here that business-oriented researchers believe that some leadership methods are better than others. Additionally, they argue that a large number of office-level managers and professionals with de facto powers, in the healthcare field as well as in other industries, adhere to outmoded, ineffective management concepts (Fallon & McConnell, 2007, p. 98). Further, numerous organizations not only promote administrators who utilize these flawed techniques, but they also perpetuate the outdated practices by refusing to train/retrain these individuals (Belker, McCormick, & Topchik, 2012, p. 5; Murray, 2010, loc. 110).

I am sure that one could suggest any number of reasons to explain this phenomenon. Some business and healthcare experts will of course focus on the prior training (or lack thereof) and life experiences of people who utilize flawed leadership styles. To some extent, I have already discussed the topic in previous sections of this chapter. Additionally, an individual could argue that poor performing administrators are the ones who are at fault because they do not take the initiative to learn best practices management techniques. I will focus on this issue later in the narrative. For now, I want to spend a little time looking at the other side of the coin and try to determine why companies, in healthcare and in other industries, tolerate managers who rely on outdated leadership and organizational methods.

I think it is important to take a moment and ask the question: Why do executives at many healthcare organizations—and for that matter at com panies in almost all industries—sometimes condone and even look with favor on front-line managers and professionals with de facto power who adhere to poor leadership and organizational philosophies? If readers stop to think about this, they might come up with any number of reasons why healthcare brass would tolerate these supervisors, including the following:

  • Cost–Benefit Concerns: In this scenario, executives believe that the benefits of teaching office-level healthcare leaders to utilize best practices leadership and organizational techniques do not outweigh the costs of the training. Along the same lines, the corporate heads feel that it is not in their particular company’s best interests to attempt to create a culture that supports CI and to train employees to use Lean, Six Sigma, or other CI-focused methods.
  • A Strong Belief That the Old Styles Are Effective: Perhaps executives, whose mentors used outmoded leadership styles, still believe in the value of utilizing the techniques despite empirical research showing that these management philosophies are suboptimal. As a result, they permit managers at all levels to use these now outdated methods (Fallon & McConnell, 2007, p. 98). Additionally, these corporate chiefs might be skeptical of the benefits of organizational techniques like Lean and Six Sigma.
  • An Aversion to Change: One could also argue that executives and middle managers are like any other type of employee. These leaders do not want to change their old habits even when they realize that there are benefits in doing so. Hence, the higher-ups are willing to let frontline supervisors and professionals with de facto power utilize outdated management and organizational methods because these executives do not want to deal with the hassles that might arise if they forced their administrators to adopt new leadership techniques.
  • A Belief That Frontline Managers Are Not That Important to the Company’s Success: These executives would look at office-level leaders in the same way that chess players view pawns. In short, these corporate chiefs feel that frontline administrators might play a role in a company’s success, but the higher-ups believe that first-level supervisors’ contributions to an organization’s bottom line are relatively unimportant when viewed against other cogs in the corporation’s machinery (Hassan, 2011, n.p.).

1.12.1 Healthcare Organizations Have Sometimes Espoused the Mantra of “Just Good Enough”

I think that all of the factors mentioned in the previous section could help to explain why healthcare organizations sometimes tolerate and even approve of their leaders using outdated management and organizational tactics. I feel that one could also point to other things, such as cultural motifs (e.g., corporate cultures) and personal relationships, which might play a part in this phenomenon. However, I believe the key reason that many healthcare corporations have traditionally been slow in encouraging their administrators to adopt best practices leadership ideas centers on the executives’ willingness to do just enough to keep the stakeholders happy. In other words, upper-management figures are content to promulgate corporate cultures that espouse mediocrity, so long as their firms create products and services that are just good enough to satisfy investors (in the case of for-profits), patients, the community at large, and any other key external partners.

Over the course of my career, I have worked for several different healthcare companies. Just as important, I have spoken with a large number of people in the field, including vice presidents and CEOs. Obviously, most healthcare executives say that their organizations are focused on achieving superior outcomes for stakeholders. More specifically, these men and women state that their particular firm seeks to provide the best patient care, maximize shareholder returns, or achieve some other lofty goal. Additionally, large numbers of these leaders assert, at least in public, that their specific healthcare company deserves an A+ when it comes to meeting its mission statements. I’m sure that, in many cases, these higher-ups’ lofty statements are spot on, and their organizations do an excellent job of meeting key goals. However, too often, healthcare executives, despite their exalted rhetoric, oversee corporate cultures that would more closely conform to the phrase, “Do just enough to keep everyone happy.”

In short, the executives and administrators, as well as many of the employees in these companies, work hard to meet their important stakeholders’ minimum requirements. Sometimes, the people in these organizations (if they were graded) would turn in B (above average) work, and on occasion, their efforts might come closer to reaching the B+ level. However, if they have satisfied the needs of their stakeholders—and no one is crying out for change—these individuals, when taken as a whole, will rarely produce A+ work. They simply do not have the motivation to do so.

1.12.2 Resistance to Change at Hospitals and Other Patient-Focused Facilities: A Special Set of Circumstances

Until relatively recently, executives and administrators at many US hospitals and other clinical-based providers would have needed to overcome an additional set of roadblocks if they attempted to implement innovative leadership methods at their facilities or tried to encourage their particular organization’s employees to utilize Lean, Six Sigma, or other efficiency-focused philosophies. For one thing, hospital supervisors would have had (and still have) to deal with powerful, semiautonomous professionals, such as physicians, who were resistant to change (Blumstein, 2010, p. 141). They also would have been required to navigate a reimbursement environment that discouraged healthcare organizations from minimizing waste and maximizing patient care (Hopper, 2016, pp. 8–11). At the same time, forward-thinking healthcare leaders had to grapple with a number of other cultural, financial, and logistical impediments. I will explore this topic in more detail in Section 1.13.

1.12.3 The Takeaway: Office-Level Healthcare Leaders Can Sometimes Get by with Being “Just Good Enough”

Given the discussion so far, readers can see that some frontline administrators have been able to get by with being “just good enough.” Following this logic, a department manager who utilizes autocratic tactics to motivate staff might not achieve optimal results, but he or she nevertheless does well enough to avoid the firing line. In fact, that person’s company might even promote the individual. At the same time, a surgeon might not be very good at leading teams, but that man or woman, due to his or her non–management-related skills, is still able to earn a decent living. As a final example, a supervisor who is not very good at staying under budget but is well liked by upper management might still be able to move up the corporate ladder.

1.13 Some Key Reasons Why Individuals Stick with Ineffective, Inefficient Leadership and Organizational Techniques

One can probably point to many reasons why healthcare managers, professionals with de facto power, and other office-level leaders might continue to utilize outdated management styles and also to shy away from adopting Lean, Six Sigma, and other CI methods. However, in my experience, I think that these three motives are among the most important:

  • Faith in the Old Ways: These individuals believe that the management styles and organizational techniques they learned as youngsters or early on in their careers are optimal. They will adhere to these beliefs even when presented with evidence to the contrary.
  • Lack of an Incentive to Change: As long as their management positions are not threatened, these people are happy to keep using suboptimal leader ship and organizational methods. Many of these individuals are even less inclined to alter their current modus operandi when they realize that they will need to devote significant personal resources, such as time and money, to learning and utilizing the new routines.
  • Self-Interests Rule the Day: The management styles that I will discuss in Chapter 2 require a person to adhere to some basic ethical beliefs, including respecting the dignity of others and upholding key corporate, state, and federal regulations. If an office-level manager is willing to ignore these basic principles, that individual might be able to maximize his or her material self-interests. However, this administrator will do so at the expense of other stakeholders. I discuss this topic in more detail in the next section.

1.13.1 Self-Interests Rule: Why Individuals and Organizations Sometimes Subscribe to Anachronistic Leadership Strategies

I firmly believe that healthcare administrators can usually better meet their stakeholders’ needs, as well as their own self-interests, by following the best practices leadership principles, which I lay out in more detail in Chapter 2. However, I should note that supervisors and professionals with de facto power can sometimes outperform their peers if the former group adheres to anachronistic management styles. I am sure that readers can point to instances in which this is the case. At the same time, an individual can sometimes benefit personally by relying on outdated or even unethical leadership practices, though his or her actions might negatively impact other stakeholders.

To be more precise, the leadership tenets that I discuss in more detail in Chapter 2 require office-level healthcare leaders to treat others with dignity and respect, to act with honesty, to meet the needs of all stakeholders (not just one or two key groups), and to obey key corporate, state, and federal regulations. As anyone who has worked in the field can attest to, administrators who adhere to these rules have to deal with certain levels of inefficiency in key services and processes (more on this topic in Chapter 5). In my experience, they often must also be willing to sacrifice their own personal interests in order to ensure that they meet the needs of key stakeholders.

From what I have seen during my time in the healthcare field, a selfish or narrow-minded healthcare administrator, who focuses primarily on accumulating wealth and prestige, can sometimes profit handsomely by utilizing unethical and/or flawed management practices. What is more, this individual can often attain what he or she wants without incurring any penalties either from the company or via external agencies. At the same time, healthcare organizations can often get away with doing things that are unprincipled or illegal. In both cases, the individual or firm is the only one who benefits; the other stakeholders will lose out. However, a person or company that views self-interest in very limited terms will be okay with this result (after all, “to the winner go the spoils”). Anyone who has worked in healthcare or another field for at least a few years can probably point to these types of situations.

1.13.2 A Case in Point: Bad Management Practices in the Emergency Room

As a case in point, assume that the management team of a hospital emergency department (ED) decides to ignore, at least on occasion, the tenets of the Emergency Medical Treatment and Labor Act (EMTALA). They ask the facility’s staff to turn away, without an examination, a small percentage of the uninsured (they still exist) or Medicaid-eligible people who come to their ED seeking treatment. The facility’s workers also violate EMTALA by releasing some poor but hard-to-treat patients without stabilizing these individuals’ conditions. I think most readers would agree that these leaders would not be following best practices principles since they are asking their employees to break laws. However, assuming the ED’s supervisors could undertake the aforementioned actions without generating any bad publicity or incurring the ire of regulatory agencies, both they and the hospital would benefit. By turning away nonprofitable patients, the hospital will realize decreased costs (in lower write-offs if nothing else) and improved bottom line results. The ED’s management personnel also win, at least in a limited sort of way, by securing higher wages or receiving choice promotions. Of course, key stakeholders, such as the patients who are turned away, will lose out, but that does not matter to the healthcare professionals in question or their employer.

Although the aforementioned narrative is fictional, it does demonstrate quite clearly that both people and corporations can sometimes better their material self-interests by adhering to unethical management strategies. Additionally, research has shown that they often get away with these illicit activities (Murray, 2010, loc. 2349). Ditto for managers or other leaders who get pleasure from mistreating their employees or who take pride in creating a culture that supports employee harassment or bullying. In my experience, most administrators and executives do not behave in this manner; however, too many of them do. I would bet that most of the book’s readers can point to one or more individuals who fit the aforementioned descriptions. In short, the good guys and gals do not always win.

1.14 Key Reasons Why Office-Level Healthcare Leaders Should Adopt Best Practices Management and Organizational Approaches

In previous sections of this chapter, I discussed why healthcare administrators might choose to utilize outdated or inefficient leadership and organizational systems. I spent more time than most experts on this topic because I think it is important for individuals to understand the factors that may motivate a supervisor to use suboptimal techniques. In my experience, people are most comfortable in adopting new methods when they are fully cognizant of these strategies’ pros and cons. To provide this balanced perspective, I sought to ascertain why someone might choose to adhere to outdated or anarchic leadership and administrative philosophies before demonstrating to readers why they should adopt best practices management practices.

With that fact in mind, I now turn my attention to the benefits that one can procure when he or she utilizes best practices management and organizational techniques. I believe that office-level healthcare leaders, and those people who will soon reach this status, should adopt these practices for two key reasons. On the one hand, many healthcare organizations, under pressure from a number of key groups, are beginning to abandon their motto of “just good enough” in favor of one that espouses CI. At the same time, I believe that administrators can best meet their obligations to stakeholders and satisfy their self-interests, especially their emotional, social, and psychological wants, by adopting these measures.

1.14.1 Factors That Are Pressuring Healthcare Organizations to Become More Efficient and Effective

Until relatively recently, hospitals and other patient-focused healthcare organizations could survive and perhaps even thrive if they were “just good enough.” Due in part to generous insurance reimbursements and a lack of competition, these companies could often afford to operate in an inefficient manner. In fact, it sometimes made more financial sense for them to do so (Hopper, 2016, pp. 6–10). At the same time, these providers could perpetuate a culture that supposedly put the patient first but in reality reduced these stakeholders to second-class citizens (Berwick, 2009, pp. 555–558).

Beginning in earnest only in recent decades, a number of important factors have forced hospitals and other clinical-focused providers to pay closer attention to efficiency and productivity measures. At the same time, key stakeholder groups, aided by the growth in the Internet and in social media, have pressured healthcare organizations to improve both their patient (or resident) safety and satisfaction standards (Hopper, 2016, pp. 12–13). As part of this process, administrators and professionals with de facto power have, over a period of years, begun to devote more time to cultivating workplace cultures that are efficient yet also put the patient or customer first (Berwick, 2009, pp. 556–558; Sultz & Young, 2014, pp. 3, 54).

These factors did not come onto the scene at the same time, nor did they lead to a tsunami of immediate changes in the health services industries. Instead, these elements prodded organizations to begin, over a period of decades, to focus ever more attention on enhancing patient care, on creating a more patient-centered environment, and on improving operational efficiency and effectiveness in both clinical and non-clinical areas. Personally, I think we are reaching (or perhaps have recently hit) the inflection point in this tide, in which a majority of healthcare professionals—including those people who previously held fast to old ideas—have at least begun to pay lip service to patient quality and CI-related themes.

I will quickly list some of the key drivers for the aforementioned transitions. Due to space considerations, I will keep this conversation brief. Readers who want to delve into these topics in more detail can peruse the numerous books, articles, and other literature that focus on these issues.

  • Private Third-Party Payers Limit Reimbursements: In 1940, relatively few Americans had private healthcare coverage—or, for that matter, any health insurance whatsoever. For a number of reasons, which I will not go into here, this figure increased severalfold over the next decade—going “from a total enrollment of 20,662,000 [people] in 1940 to nearly 142,334,000 [individuals] in 1950” (Thomasson, 2003). The number of men and women in the United States who possessed self-funded or employer-paid healthcare policies continued to grow in the ensuing decades. In 2012, 195.9 million Americans had private health insurance (Smith & Stark, 2012).

    Up until the 1970s, hospitals, doctors, and other healthcare providers were the chief beneficiaries of the seemingly ever-increasing pool of Americans with private health insurance coverage. That is because third-party payers reimbursed organizations “for medical services without asking providers to justify their prices or reasons for the services” (Bodenheimer & Grumbach, 2009, p. 194). This situation began to change in the 1970s and 1980s when insurance firms started to limit both the utilization of healthcare services and the payments for these procedures and visits (Bodenheimer & Grumbach, 2009, pp. 195–198). While providers have stymied some insurer-sponsored cost-cutting initiatives (e.g., HMO usage has declined) and have even gained back some ground at times, the latter group has maintained its pressure on hospitals, doctors’ offices, and similar companies to become more efficient and effective (Bodenheimer & Grumbach, 2009, pp. 195–198; Diede, 2002). These carriers, spurred on by the employers (and, to a lesser extent, individuals) who pay for a good portion of the subscriber premiums, will likely continue to look for ways to further reduce reimbursements to health services organizations (Diede, 2002). Third-party payers will also demand that these providers deliver more bang for the buck—in the form of higher quality of care.

  • Federal and State Governments Also Pressure Providers: Over the last few decades, federal and state governments, faced with ever-increasing healthcare costs, have, among other things, begun to put pressure on health services organizations to improve patient safety and satisfaction, to reduce or eliminate wasteful spending, and to become more efficient (which doesn’t always equate to eliminating waste). The Centers for Medicare and Medicaid Services (CMS) is one of the key federal agencies involved in helping to promote this trend. In response to the passage of the Tax Equity and Fiscal Responsibility Act (TEFRA) in 1982, the government organization—for its Medicare plans—ditched the cost plus reimbursement model, which allowed providers great leeway in clinical and operational decision making, and replaced that system with one that focused on prospective payments. Since that period, CMS has continued to leverage its oversight of Medicare to help it push hospitals and other health services companies to become more efficient, effective, and patient centered (Hopper, 2016, pp. 11–12). The agency has had some success with regard to these efforts (DeWalt, Oberlander, Carey, & Roper, 2006, pp. 79–88). States have not sat quietly by during this period. Among other things, they have handed over control of their Medicaid reimbursement systems to managed care organizations in an effort to reduce their costs (Syrop, 2016). These trends will likely continue into the future.
  • Accrediting and Licensing Agencies Play Their Parts: Over the past few years, accrediting and licensing agencies have also begun to push healthcare organizations to become more accountable with regard to their spending and patient care. The Joint Commission (JC) has taken the lead in this endeavor. Over the last couple of decades, it has placed an increasing emphasis on ensuring not only that hospitals and other providers meet structural guidelines (employing an adequate number of staff, etc.) but also that they achieve process and outcome-related goals. In order to meet the JC’s requirements, healthcare organizations have had to become more efficient and effective (Morrison, 2011, pp. 89–90; The Joint Commission, 2016). As another example, many states, prodded initially by federal legislation, have in recent decades started to exert more pressure on nursing homes to improve patient safety and satisfaction scores (Singh, 2010, pp. 28–33).
  • Competition Among Some Healthcare Providers Is Increasing: In recent years, some healthcare providers have had to deal with a larger number of competitors than in the past. As a part of this process, these organizations have, among other things, needed to cut costs, improve their efficiency ratings, and better manage patient/customer desires in an effort to remain viable. A case in point is the hospital industry. At one point in time, many hospitals could leverage state-based certificate of need laws and other measures to limit the number of potential competitors. Even when these facilities did have to contend with other providers (e.g., other local hospitals), they were often able to limit the struggles to a narrow range of areas (Hopper, 2016, p. 10). For instance, in the past, hospitals often did not compete with each other on price or duel it out over the airwaves (Berkowitz, 2011, p. 4; Hopper, 2016, p. 10). In the past couple of decades, that situation has changed dramatically; now, these organizations find themselves tangling with a wider array of providers—and over a much more diverse number of services (Hopper, 2016, pp. 14–15). As a result, hospitals have responded to these challenges by reducing expenses and providing better patient care.
  • The Rise of the Consumer: Until recently, physicians, hospitals, and other providers operated in a culture that espoused paternalistic, authoritarian attitudes. Following these tenets, providers told patients what to do and expected these individuals to obey. At the same time, prior to the technology revolution, key healthcare groups had a near monopoly on medical information; they leveraged this fact to help them maintain their places in the power structure. Flash forward to today, patients can now use the Internet to become near experts on almost any disease or condition. They can also utilize the information on the Web and social media to help them determine how well doctors, nursing homes, hospitals, and other organizations perform on a range of important safety and satisfaction metrics. As a result of these and other factors, healthcare-related customers are gaining power vis-à-vis their providers. Although it is difficult to determine how far the pendulum has swung in this regard, the rise of the consumer has likely forced healthcare companies to become more efficient and effective in an effort to adjust to this growing movement (Feinberg, 2012, pp. 1–5; Sultz & Young, 2014, pp. 3, 54).
  • Other Issues: There are many other factors, apart from the ones mentioned above, that have led healthcare providers, especially ones which are involved in patient or resident care, to become more efficient and effective. They include the steady rise in healthcare costs (alluded to in previous paragraphs), advancements in technology, the big data revolution, the growing public focus on wellness and prevention-related methodologies, the increased attention on individual privacy, and changes in American culture that have resulted in a push for greater transparency and individual empowerment. Due to limited space, I will not discuss each one of these trends. Readers who want to learn more can find literally thousands of articles and books that cover these topics.

1.14.2 Healthcare Organizations Respond: Growing Focus on Best Practices Management and CI

In response to the factors listed in the previous section, many healthcare providers are trying to become more efficient and effective. They are utilizing a number of strategies to achieve these objectives. A large number of these companies have begun, when possible, to replace hierarchical management structures with ones that center on participatory (or team-based) methods. Many of these healthcare corporations are also are using CI-related methods, such as Lean and Six Sigma, to help them reduce waste and improve their operational efficiency. Tying both of these themes together, healthcare organizations have placed an increasing focus on creating office cultures that espouse ideals that are amenable both to a customer/patient–focused environment and CI philosophies.

In healthcare, topics centering on best practices management, CI, Lean, Six Sigma, and Lean Six Sigma (which combines elements from Lean and Six Sigma) are hot right now. I can attest firsthand to the fact that both undergraduate and graduate healthcare programs offer classes that focus on all of these subjects. Additionally, many healthcare conferences, webinars, and the like offer informational lectures, hold discussions, or provide training courses that are centered on these themes. As a measure of these terms’ popularity in the healthcare arena, I placed the phrase, “continuous quality improvement and healthcare” in Google and brought up 15,400,000 results. I performed a query for “team and healthcare” in Amazon and pulled up 38,921 books. Granted, searches on Amazon for phrases like “Lean and healthcare,” “Six Sigma and healthcare,” and “Lean Six Sigma and healthcare” produce fewer results, but they nonetheless still pull up hundreds of unique entries.

Importantly for office-level healthcare leaders, a large number of organizations now require them to learn and utilize best practices management strategies and CI systems such as Lean and Six Sigma. Over the coming years, many more healthcare companies will likely demand that their administrators imbibe and utilize best practices leadership and organizational systems (which include topics related to patient-focused and CI-supportive office cultures). If nothing else, almost all healthcare professionals will probably, at some point, interact with peers in other areas of their particular facility who do use these techniques. Thus, it is important for these leaders to know something about best practices management, CI, Lean, and Six Sigma.

1.15 Summing Things Up and Looking Ahead to Chapter 2—A Brief Synopsis of Key Leadership Ideas

As I noted in this chapter, office-level leaders are among the most important people in any healthcare organization. That is because they oversee the frontline employees who are responsible for keeping the company running. Given that fact, readers might find it somewhat surprising that numerous healthcare firms have typically not provided administrators with the tools, including the proper training, which they need in order to maximize their ability to properly manage workers. In fact, in my experience anyway, some healthcare organizations have maintained a status quo that reinforces bad leadership practices. One can posit a number of reasons to explain why executives and other pertinent staff at these organizations have, traditionally, been willing to accept and even reward leaders who, to use an old cliché, do not “run a tight ship.” Perhaps the most important factor contributing to this phenomenon is the realization that, until recently, some healthcare officials had no incentive to push supervisors to adopt best practices management and organizational techniques.

In recent years, a number of factors have prodded healthcare organizations to become more efficient, effective, and patient or customer centered. To accomplish this feat, many of the decision makers in these firms are trying to integrate best practices management systems and CI-focused methods into their corporate cultures. As I have stated in this chapter and in subsequent parts of this book, a facility needs to possess a core group of supervisors who utilize good leadership techniques if it wants to create a company-wide culture that is supportive of CI philosophies, as the two processes are interrelated.

In the next chapter, I will describe in more detail what I mean by best practices management, and I will contrast this leadership style with one that relies on authoritarian or hierarchical principles. As a part of this process, I will demonstrate that healthcare administrators who utilize good leadership techniques typically oversee departments that are more effective and efficient than would otherwise be the case. Following this logic, they achieve results that better meet the needs of important stakeholders, including employees and patients or customers. By adhering to these methods, supervisors also are acting in their own self-interest, at least when one considers human needs that go beyond the purely material ones. Most importantly, at least with regard to the themes in this book, managers and professionals with de facto power who utilize best practices leader ship methods are more likely than peers to oversee workplace cultures that are supportive of CI initiatives.

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