Performance Management & Strategy Execution Blog: The Glue

Healthcare: Quality Improvement for the Long Haul

In a recent write up from HealthLeaders Media, Elyas Bakhtiari provided a great summary from a recent panel discussion in Chicago, The Hospital of the Future Now. The leaders on the panel suggested five strategies for improving healthcare outcomes, all of which stress performance management principles as ways to drive results in hospitals. The strategies included:

1. Make quality permanent. The panelists made the point that we need to create a culture around quality, even setting quality as the foundation. I'd ask you to think about what you do to help make quality a key theme within your organization? What tools do you use to help keep your quality meetings timely and focused? Establishing a “rhythm” and an expected, repeatable approach to reviewing measures and the status of initiatives helps keep the quality message at the forefront.
2. Seek the right outcomes. The panelists talked about getting to the core of the measures that make a difference. At ActiveStrategy, we often describe this as identifying the “lagging vs. leading” measures. Does your organization report on “everything” – only to find that little to no gains are made over time? Focusing on the right set of metrics is a big key; it takes some work and targeted facilitation, but the impact is well worth the effort.
3. Include a broad community. Here the panel was stressing the point of focusing not only on the outcomes of procedures, but also on the outcomes of the communities being served. Again, I think the question from a performance management standpoint is: do you have the right metrics? Do your measures capture the impact you have (or wish to make) on both short term and long term outcomes? Collaborative measures may also be appropriate for joint efforts in areas like childhood obesity prevention or rural health programming.
4. Use technology to support, not drive, improvement. The panelists urged the attendees to beware of making technology a solution in itself. As you well know, with any implementation of technology, it’s the “meaningful use” of that tool or system that will help drive and sustain change.
5. Get ready for integration. The panel suggested that while new models like medical homes and accountable care organizations show promise, healthcare leaders need to continue pursuing innovation and new solutions.

When a Balanced Scorecard performance management framework is cascaded and deployed, it supports these approaches perfectly. It helps an organization focus on quality in a broad, outcome-based, collaborative, and integrated way -- making the quality message and the quality culture “stick.”

Have you come up with strategies to make quality a key, enduring theme? Let me know in the comments!

Lessons from a Successful Turnaround at One Public Hospital

Today, in a Wall Street Journal Health online article titled “Mending the Hospital Safety Net”, the author talks about a hospital that turned itself around financially  -- not through government monetary infusions, but by applying internal discipline, creating focus, and enforcing accountability.

This story resonated with me because of the emphasis on changing the culture to one that is based upon ensuring successful strategy execution.

Here's an excerpt explaining CEO James Valenti's take on what worked:

"He says he did it by using the "the private-practice business model" and applying it to the public hospital: he demanded individual accountability and financial accountability; he developed a clear strategic plan, and recruited people who could execute the plan; he changed the culture from one of inertia, defeat and pessimism, to one of excitement and belief in the future."

The article goes on to describe how far Valenti went to ensure his strategic plan would succeed -- which required support from all of its diverse stakeholders. He made "up to three speeches a day to different community groups, selling them the hospital's mission and strategic plan. He won over the city council, the hospital board, law enforcement and the public with his singular vision of where the hospital needed to be."

Why was this hospital able to achieve success when so many others can't? Clearly Valenti's leadership and unwillingness to accept business-as-usual was key. But just as importantly, he articulated a clear plan and ensured it was executed well.

As this turnaround at one El Paso hospital shows, pairing the right strategic focus with accountability for results, is the right medicine for ailing institutions of all kinds.

What’s Cool About Scorecards?

Today I was reminded what the coolest thing is about Balanced Scorecards: THE CONVERSATION

 

The point of a scorecard is to force "the conversation" about the most important “red” measures (those not hitting targets). Sure there are other benefits of scorecards, like communication of strategy and transparency, but for me I’m most excited to see my client have an honest conversation about what they can do to turn “reds” to “greens.” The real reason to develop a scorecard, after all, is that it's not just a report. Reports don’t relieve stress in the organization. The conversation that occurs during a Scorecard Business Review does.

As many of you can appreciate, there are no guarantees that you’ll get to the conversation.

But after the strategic planning, the scorecard cascading, the cultural resistance to “more work,” the gathering of the data, the setting of targets…today we made it!

 

I felt truly happy to listen to a cross-functional conversation about a “red” measure in the purchasing area. At the beginning you could feel the tension in the room.  This measure symbolized the stress behind the process.  But the conversation forced the participants to truly understand the current process and to brainstorm how they could improve it.  Once that happened, the scorecard participants could see the light at the end of the tunnel.  This will be a "green" measure soon.  Their lives will be so much less hectic next year. They finally saw the value that the CEO promised would be there.

 

That's cool.

Meeting IOM’s Six Aims - The Role of Accountability and Scorecards

The Institute of Medicine’s (IOM) Six Aims for Improvement state that healthcare delivery should be Safe, Timely, Effective, Equitable, Efficient, and Patient-Centered. In addition, The American Hospital Association (AHA) has a new and permanent activity called “Hospitals in Pursuit of Excellence.” This portfolio of resources is available to help hospital leaders, clinicians, and staff accelerate the transformation of care and processes to the IOM Six Aims for Improvement (www.ahaqualitycenter.org).

As you read through the summary of the Six Aims and core principles of the AHA’s Hospitals in Pursuit of Excellence (HPOE) program, there are several themes that come through very strongly. From a leadership standpoint, the need for measurement is essential. Not only do you need to know your baselines, but you also have to know the benchmarks, establish goals -- and more importantly -- decide upon and implement the initiatives which are going to move the meter on the prioritized, leading measures. 

Three of the core principles of HPOE describe the reduction of variability, removal of process variation, and the removal of inefficiency. Managing these endeavors requires organizing a portfolio of projects and initiatives. Of course, all that may actually be the “easy” part. The biggest challenge for many organizations is building the culture that supports and accelerates a pursuit of excellence. One of my favorite lines regarding culture is that “culture eats strategy for lunch every day.” Not making individual accountability a central theme of any large scale initiative only sets you up to get your lunch eaten by that cultural challenge.

So how can you go about providing a framework to build, manage, monitor and drive successful change? One way is to use Balanced Scorecards. Scorecards and tools that facilitate and promote accountability not only can help provide strong building blocks for cultural shifts, but they can also lead to organizational accountability. My colleague, Jeff Bunting, has written about this in an earlier blog:

“Ensuring that leaders and employees are accountable for business results is not primarily a technology issue. However, both the Strategy Execution methodology and related software must be designed to help nurture and facilitate personal and organizational accountability for real change to occur.”  (The Glue: Blog, 08/25/09  Jeff Bunting).   

Scorecard software that is effective in facilitating a higher level of accountability will include initiatives (with tasks and milestones) with assigned owners. Providing a status report on predetermined dates, and having the review of the initiatives “real time” in a business setting set the stage for communicating expectations. The questions, dialogue, and action items that come from these exchanges bring true value to the organization. 

How are you organizing your efforts for the IOM Six Aims or the HPOE programs? Does your approach facilitate accountability and present an audit trail of status reports, milestones, and level of achievement? Let me know what you see as a “recommended practice” for these pursuits.

Healthcare Stimulus Funds and Scorecards

The American Recovery and Reinvestment Act of 2009 (ARRA), signed by President Obama on February 17, 2009, includes $19.2 billion in provisions for healthcare information technology (HCIT). As part of this program, there are incentives through Medicare and Medicaid for the “Meaningful Use” of Certified EHR Technology.

So just what does “meaningful use” mean for hospitals? Medicare defines it so far as “using certified EHR technology and, to the satisfaction of the Secretary of HHS, demonstrating that the certified EHR technology is connected in a manner that provides for the e-exchange of health information to improve the quality of health care, such as care coordination; and, the hospital submits information, in a manner and form specified by the Secretary, on such clinical quality measures and such other measures as selected by the Secretary.”

Assuring appropriate use of ARRA funds will be a key priority for many hospitals. To that end, utilizing a scorecard methodology and product can provide the necessary tools to track, monitor, manage, and document the meaningful use of ARRA projects and programs. The Secretary of HHS will determine the measures that will be required and these measures will need to be tracked over time and submitted as “proof” for quality of care improvement requirements for incentive payments.

An effective scorecard should provide the following capabilities for hospitals and healthcare systems:

• One centralized repository of key cost, schedule, outcome, and status measures for each project with intuitive scorecard and stoplight views -- this provides healthcare clients with unprecedented capabilities to document meaningful use of ARRA funds.
• Accountability at the project/program level -- each project has an accountable person responsible for monitoring and reporting project/program progress and status. This ensures that there is personal accountability for individual projects/programs.
• Built-in audit trail -- ongoing status reports and project/program measures are maintained so it is clear what accountable parties were reporting and what issues were raised over the life of the project/program. This helps avoid unnecessary delays and removes numerous barriers.
• Tracking of leading and lagging outcome measures -- the tools and the approach enable the definition of outcome measures for each project or program and track the outcomes over the life of the project. If outcomes are not reaching the targeted goal, corrective action can be taken early in the life of the project or program. This helps ensure that the ARRA funds deliver the outcomes expected.

Hospitals will need a strong closed-loop management process to assure that ARRA funds are tracked accurately and appropriately with the right amount of transparency. Furthermore, the accountability and review process that scorecards can provide will help to diminish the chances of unwanted project and initiative delays and helps to drive a hospital’s ability to provide the outcomes envisioned by the Federal Government.

The Healthcare Information and Management Systems Society (HIMSS) has some great resources and summaries on their website regarding the ARRA and its impact on HCIT. The first link provides an overview, while the second link has valuable FAQs.

1. http://www.himss.org/content/files/HIMSSSummaryOfARRA.pdf
2. http://www.himss.org/EconomicStimulus/docs/HIMSS_FAQs_ARRA.pdf

The Quest for Best Practices in Hospitals: Top-Level Measures

I recently read a great article by the AMR Research's Healthcare Exchange entitled "A Hippocratic Oath for the Healthcare Supply Chain".  The article suggests actions for creating a more efficient value chain for hospital patients based on best practices learned in sectors outside healthcare.  In this blog, I'm extrapolating how to take those lessons learned and apply them toward any top-level measure on your hospital scorecard.

The most common roadblocks in reaching targets on a top-level scorecard measure are:

1. The top-level measure is focused internally, not on patients' needs
2. There is no drill down from the top-level measure into the contributing departments/silos that are part of the process
3. There is a fundamental lack of understanding from each silo as to what their process is
4. Performance reviews that cut across silos from an executive champion of the top-level measure are seldom (if ever) conducted

These roadblocks result in a lack of trust between silos and poor planning within the silos.  Furthermore, we see incredible amount of waste in terms of time, money, and inventory due to the poor planning, which in turn leaves less time and money for making improvements.

So what are the best approaches for overcoming those roadblocks?

1. Think about the patient -- pick the top-level measure (and target) with patient needs in mind, not department needs.
2. Think lean -- develop a process flow (value chain) that starts with the patient and maps back to the beginning.  This will help you cut across the silos.
3. Get representatives of all the silos in a room and have them identify waste and engineer it out of the process.
4. Offer drill down from the top-level measure into process measures from each silo that will track reduction in the waste.
5. Hold consistent performance reviews -- data doesn't change behavior; good questions on a regular basis from the executive champion does.

As the AMR article discussed, results that arise from adopting these best practices include better planning, lower costs, and more time to make improvement.

How Hospital Scorecards Change Before, During, and After Improvement

During each stage of an organization's improvement journey, the discussion changes and therefore their Balanced Scorecard content/structure changes.

• Before improvement you look for root cause.
• During improvement you verify that suggested remedies fix the problem.
• After improvement you sustain the gains you've achieved.

Take for example a hospital with poor performance in the medication reconciliation component of their patient safety composite.  That would appear on your top level scorecard as the lagging measure "Accurately and Completely Reconcile Medications Across Continuum of Care" which is the Joint Commission's National Patient Safety Goal 8A.

Scorecard Structure Prior to Improvement:  the first action will be to charter a project team to look into root causes and suggested remedies.  The scorecard should show three things at this point:

• The Lagging Measure: "Percent of Medications Accurately and Completely Reconciled Across Continuum of Care."
• The Dimensional Drill Down Measures: Break down the lagging measure by the same unit of measure across your departments to see if the problem is systemic or exists in just a few areas.
• The New Initiative: You want to get a status on the timing, budget, and resources right away and make sure your team gets to root causes as quickly as possible. They might follow the PDCA, Test of Change, CAP, RPI, or even Lean Six Sigma project methodology to do so.

Relating the "Medical Home" to Balanced Scorecards

According to a July 21st  New York Times article called “Trying to Save by Increasing Doctors’ Fees”, the latest "new, new thing" is the Medical Home, being piloted by payers across the nation. As stated in the article:

"The idea is that by paying family physicians, internists and pediatricians to devote more time and attention to their patients, insurers and patients can save thousands of dollars downstream on unnecessary tests, visits to expensive specialists and avoidable trips to the hospital."

Here in Pennsylvania, where I live, IBC, Aetna, and Cigna are spending upwards of $13M on these programs over the next 3 years.

The way I see it, there are striking parallels between these ideas and some of the fundamentals of well-deployed Balanced Scorecards. To explain, let me translate the Medical Home concepts into Balanced Scorecard speak. The goal of the Medical Home is to save money on “downstream” costly conditions (i.e. lagging measures) by spending money on less costly “upstream” activities (i.e. leading measures). This is exactly the type of thing you would want to see on a Balanced Scorecard for a Primary Care area of a health system.

In a deployed Balanced Scorecard framework, there should be alignment between the lagging indicators of performance (e.g., the number of patients with expensive conditions) and the leading indicators that impact that measure (e.g., t he number of preventative efforts that have been shown to improve or prevent those conditions).

Hospital Scorecards: Where Should Strategy Live? How About Balance?

At all levels of a hospital or health system, from the board of directors to the nursing units and support departments, good scorecards should be "balanced," meaning that they should include objectives that represent all of the hospital's key stakeholders (e.g., patients, physicians, employees, community, financial stewardship, etc., depending on the particular hospital's situation).

But there are different reasons for that balance.

First, let me say that there will be meetings where parts and pieces of Balanced Scorecards will be reviewed, such as budget reviews, event reviews, and quality governance meetings, but these meetings are not intended to be conversations about the holistic strategy, so these won't necessarily cover the full scope of a truly "balanced" scorecard framework, which is just fine.

Now let me examine the different reasons for balance in scorecards at all levels of the hospital.

The Board Level and CEO Scorecard – All perspectives (i.e. strategic groupings) will be present and the holistic strategy will be represented. This audience views the strategy as it cuts across all the silos of the organization. This scorecard shows how success in objectives for the workforce, internal processes, and external partnerships will translate into better patient experiences and improved quality of care, as well as improved financial performance.

Chief Strategy Officer Titles & Roles in Healthcare

I have lately been seeing the position of Chief Strategy Officer (CSO) become more prominent in the hospital setting, either by title or by invitation to executive leadership meetings.

In the past, there was often a business development/marketing person that reviewed business opportunities and assembled a proforma for review by the hospital’s CFO and CEO. More and more, I see that same person actively engaged with the “C-suite” and, as was discussed previously on this blog (in "Is Strategy Execution Anyone's Full Time Job in a Hospital?"), an individual is sometimes named as a chief officer over strategy development and execution.

As we all know, even with improved visibility for this role, there are still debates over who actually “owns” the strategy process. Is it accounting, finance, marketing? Is it the CEO? It really shouldn’t be a question of who or where it is owned, but one of who is involved in the strategy development and execution processes, from A to Z. Are they working together? Are they, as a team, able to achieve alignment? If there is a CSO, he or she can help drive this, but -- much like quality -- strategy must be everyone's job if it's going to be executed effectively.