| 1 April 2016
Dear Interested Readers,An Overview of This Week’s Letter
This is the fourth letter in a series that I began back on March 11. At that time I said, “The series will be an ambitious attempt to look at what creates success in an organization committed to continuous improvement.” I began with a discussion of leadership that was driven off John Toussaint’s observation from examining organizations that attempted to do Lean but were disappointed by their lack of success,
“...leaders fail to recognize the magnitude of change that will be required and that change extends to the leaders on a personal level.”
The search for what creates success has included references to the importance of “Lean leadership” and of “soft competencies” like the ability to build trust and engagement through effective understanding and utilization of relational contracts to enable sustained superior performance. All three letters have been an attempt to understand leadership within the context of Lean and Lean leadership’s ability to be the catalyst for transforming a medical enterprise to meet the challenges that inhibit our progress toward the Triple Aim.
I warned you that along the way we might chase a few rabbits and indeed I think we have. I would be surprised if you did not consider the discussion of relational contracts and my recurrent obsession with adaptive change to be rabbit holes of sorts that you were forced to visit if you were a faithful reader. In that initial letter of this series I also expressed the hope, as a request, that you might help me out with your comments and suggestions for my enlightenment. Thomas Rice immediately took me up on my request and sent me a review that he had written on a book, For The Common Good; Redefining Civic Leadership, by David Chrislip and Ed O’Malley. After reading Thomas’s review I knew that I must read the book. To my dismay Amazon informed me that there would be a delay in the delivery of the hard copy. I knew that this would be a book that I wanted on my bookshelf and not as a Kindle edition, so I placed my order and waited. The book arrived last week and it was well worth the wait. Although I have not completed it yet, I have gone far enough to know that I must share its wisdom with you in this letter.
The second section of the letter is somewhat connected to the first since it is a manifestation of civic action in response to child abuse, a social issue which surely impacts the health of our communities in a way that yields issues and problems that persist for decades and lifetimes. In the last section I report on my observations and adventures in Houston and my anticipation of a special weekend in Galveston. I could not end and be consistent with who I am without acknowledging the beginning of our collective journey for 2016 toward the World Series.
Last week’s letter has been abridged and slightly modified and you can find it entitled, “Speaking Truth to Power”, on strategyhealthcare.com where your colleagues and friends can sign up to be an Interested Reader. I hope that you will let them know about both the website and the weekly “Healthcare Musings” letter.
Leadership: More Than A Position, An Activity
I have made frequent references over the years to the Lean leader and there are many books on Lean leadership that outline how leaders in a Lean organization approach their work. We all know that “standard work” for leaders includes being involved and practicing a style of management that includes coaching, mentoring and teaching rather than just commanding, expecting, and holding accountable the people who do the work. Much of the standard work of the Lean leader is done “in the gemba”. John Toussaint has postulated that sustained success with Lean requires organizational transformation and the movement from “doing Lean” to “being Lean” cannot occur without the transformation of senior leadership.
Toussaint is very practical and graphic when he talks about dumping the culture and tools of “management by objective” which he calls “Sloan Management” in honor of the very top down style of Alfred Sloan the legendary CEO of General Motors. Toussaint points out that management by objective with its tendency to produce “silos” will be replaced in a Lean enterprise by collaboration across functions which is labeled as management by process. Lean is the foundation of the organizational culture that creates sustained value and is the operating system through which breakthrough improvements have been achieved when management moves from functioning through pure “authority” to being involved in the transformation to an organization capable of producing sustainable value.
As I mentioned in the “Overview of This Week’s Letter”, Thomas Rice recently sent me his review of a new book on leadership. Until I began to read For The Common Good; Redefining Civic Leadership, by David Chrislip and Ed O’Malley, I did not fully appreciate the intent of his recommendation. Now I see that Lean leadership is highly correlated with the evolution of management as described in the book as “civic leadership”. The authors elegantly trace the relatively short history of the academic analysis of management and the evolution from the “big man” concept of leadership, through situational leadership and less explicitly toward “level five leadership” and “servant leader” models that I discussed in the first letter of this recent series on March 11.
My intent had been to position Lean leadership as an even more evolved state and had moved well past the use of distant authority toward active involvement that disperses authority by creating opportunities for leadership and the development and deployment of strategy up and down the organization. Inviting others into the roles of problem solver, improver, innovator and silo bridger are the core competencies of the Lean leader. Knowing how to build the relational contracts and foster the trust that accompanies those invitations to become problem solvers, improvers, innovators, and silo bridgers is a key competency of the Lean leader.
I believe one of the reasons that Thomas recommended the book is that its authors share my belief that leaders can be made. I have seen people emerge as newly minted leaders during a Kaizan event or when challenged in the evaluation of a value stream or the creation of a transformational plan of care. Lean methodology, when given life and credibility by an active Lean CEO or senior leader, can create a learning lab for leadership that multiples the organization’s capacity to respond to the needs of their patients and the external challenges of our times.
Reading as far as I have read in the book has given me greater hope that by enlarging and continuously transforming our concepts of leadership in a way that is consistent with Lean leadership, we will accelerate our ability to process change and achieve the Triple Aim goals that are our shared vision of better care for everyone at some time in the future. There were hints of this reality in Thomas’s review that I did not fully appreciate until I began to read the book:
For The Common Good; Redefining Civic Leadership, by David Chrislip and Ed O’Malley, is a singular contribution to the leadership literature, a genre that churns out over 2000 volumes a year and shows no sign of waning. With that kind of volume cascading off the press, I’m aware that it stretches credulity to claim singularity for such a slim volume…
Why is this book so special? For openers, it is a direct challenge to an orthodoxy that has dominated a field that was first established as such in the late 60s and 70s. Even a casual review of this daunting body of work cannot fail to notice that, for all its variety, there is one dominant carrying beam, a mostly-unspoken premise, at the center of this literature: Leadership resides in the individual in a position of authority with a followership dependent on the leader for vision, strategy, and inspiration. Sometimes charismatic, often not, the leader is always at the center of the action. His character and intellect—and it is typically a man —is the main determinant of the fate of his followers, be they organizations, cities, regions, or nation states...
Others have broken with this “great man” theory before, but no one I’m aware of has prosecuted the case so explicitly, with such theoretical elegance and empirical clarity…
Thomas is right. The concept that leadership is confined to an individual posited with “authority” has been challenged in many ways. The “great man” model is gradually being replaced by people like the authors and also many in Lean like John Toussaint who are arguing that leadership needs a new model with new objectives and a broader base. The book and Thomas’s review are another take on Toussaint’s concept of the problematic limitations of “Sloan Management” or “top down” use of authority to direct the enterprise. The book traces the evolution of leadership theory and practice over the last 60 years and comes to the conclusion that focused authority in one or a few individuals who theorize and then direct the efforts of others is a process with a limited arc of success. The old leadership style is probably not adequate for our complex times and the interconnected problems and opportunities that exist in the volatile, uncertain, complex, and ambiguous world that we call home. My reading verifies Thomas’s assertion that the book
[the book]..is not just an inspirational statement on why this new model of leadership is imperative, but also a highly accessible theoretical framework that has already passed the practitioner’s test in the field. The result is an exemplary act of civic leadership worthy of Gandhi’s adage that “…we must be the change we want to see in the world.”
This week I had hoped to connect what Thomas calls “a foundational essay” to the statements that I have been making about Lean. It is at moments like this that a story helps so I want to briefly digress once again to the story of my evolution and experience as a leader. I spent time with some of this story in the March 11 letter, and I will not review all of those points again but I will try to extend the discussion in the context of my personal learning.
In the mid nineties, a colleague, Carl Isihara, introduced me to the work of Peter Senge and others who were talking about the “learning organization”. The description of the “learning organization” was an attractive alternative to the “top down” style of leadership that the physicians of the “staff model” practice of Harvard Community Health Plan had come to experience. Even more than twenty years ago there was a sense that with each new year we were delivered an order for yet more productivity that would require running harder with less and less local say in how we achieved those goals. Leadership set the direction and the goals (management by objective) and then issued the command to go forth and accomplish those goals without much additional help or advice.
At about the same time I also read Charles Handy’s paper on federalism from the Harvard Business Review. The concept of local control and the idea of subsidiarity seemed to me to be totally consistent with the concept of the “learning organization” and together they constituted a significant argument against the command and control environment that we were experiencing as each year upper management translated the external pressures coming from the marketplace into new demands that the practice had to meet and exceed. The tools that evolved included compensation systems that were more oriented to volume than quality and value. At a time when the IHI was emerging with a focus on safety and quality we were headed toward an obsession with market share and the bottom line. It felt like we had lost all of our internal values. We did not know where true North was.
The demands of management that seemed to place clinical values in a subservient position to business concerns eventually led the emergence of a “coalition of the concerned” that spawned a lot of grassroots leadership. The result was several years of tension and negotiations that eventually led to the creation of Harvard Vanguard Medical Associates on January 1, 1998. As HVMA emerged from what by then had become Harvard Pilgrim Health Care we were quite articulate with the language of self determination and local decision making. We believed that our values were most consistent with a confederation where there was very little central authority.
Our initial structure was a utopian reaction formation to “top down” management. The CEO had no capacity to remove a site leader and each site had a local board. The central organization negotiated contracts and maintained shared functions like Epic. It could convene and lead the discussion about shared objectives that when decided were difficult to manage or enforce if they were disregarded locally. Despite the lack of central authority other than the consensus decisions at the central board level there was good will and an understanding that collectively we all shared great benefit when we were seen from the outside to function efficiently as a homogenous and harmonious collective.
Most remarkably management would suggest and the board would approve budgets that were a transfer of income and resources from locations with financial surpluses to locations with populations that required more services because of the external social determinants of health and disease. Those resources were then managed locally with little accountability other than peer pressure and local pride. Paradoxically the less obligated we were to collaborate the more we saw benefit in our collaboration.
The progress toward our utopian world was torpedoed by the financial collapse of Harvard Pilgrim at the end of 1999. Our dream was really over before it was over because there is almost always a run up to disaster. By the beginning of the new millennium we were facing insolvency because of the loss of many tens of thousands of patients. We lost at least 150,000, perhaps 200,000 patients, in a very short time period. We were in trouble just as we were beginning to make progress on a core objective which was to diversify the source of our patients by moving from being an exclusive offering of Harvard Pilgrim to accepting patients from all payers.
Interestingly, growth was not the sole objective of our diversification strategy, nor were we originally clairvoyant enough to predict the collapse of what appeared to be a strong corporate entity until about nine months before it happened. Then it was almost too late to avoid the pain. Our major motivation to separate from Harvard Pilgrim was to gain the ability to retain our therapeutic relationships with patients when their employer decided to offer only one insurance plan. Most of the businesses in our market were moving to a “sole source” or “self-insured” offering to their employees and it was regularly true that when a change occurred our patients often lost access to us. As a physician I was tired of having patients whom I had known for up to twenty years crying in my office because they would not be able to come back since we did not “take” Blue Cross or Tufts or whatever plan their employer was forcing them to join.
It was important to successful contracting to be able to present ourselves as a collective where quality and service did not vary by site, even as we were focused on a high level of local autonomy. Our belief in subsidiarity required that every decision be made as “close to the patient” as possible. It was unfortunate that our separation and diversification plan was not complete by the time Harvard Pilgrim’s miscalculations, in their attempt to buy market share, put them into receivership. On the upside, fortunately we had done enough to have a little bit of a head start on our efforts to survive and that gave us a chance. Our colleagues in the Rhode Island staff model practice of Harvard Pilgrim were not so lucky and ceased to exist.
In those dark days the first metaphor that came to mind was that we were in a lifeboat rowing as vigorously as we could to get away from a sinking ship so that we would not be sucked under by the swirling vortex that the ship created as it went down. Later the metaphor would be the image of our little band of survivors huddled in the cold on the barren rocky beachhead of our new world, burning much of our essential equipment and eating our seed corn to get through the miserable winter while we buried our dead. It was not a happy time.
Our grand experiment in local control died as we shifted to survival mode and returned to the standard management structure of the “big man” leader who is empowered to managed top down. Collaboration across departments and sites was replaced by hoarding of resources within specialties and service lines. We entered a new world where the credo was “eat what you kill”. Each individual was valued or not based on their monetary contribution. The glaring unfairness of how the external world distributes reimbursement created problems for some specialties. Everyone had to generate enough surplus to pay off the center and survive on the residual. The phrase was “everyone on their own bottom”. Those that could not produce were banished or became beggars. Some departments like Behavioral Health never had a chance to even cover their own direct costs because of the low reimbursement for their services. After a long discussion, they became the recipients of the charity of the collective. Despite their key contributions to our model of care, they were never allowed to forget that they existed because of the charity of others.
That was our world that I described last week when I attempted to explain the dysfunction that greeted Zeev Neuwirth when he brought Lean to Kenmore. You might remember:
Zeev had interrupted an interesting medical career in academic practice and consulting to go back to the Harvard School of Public Health. After completing his MPH he was full of exciting ideas about reinventing the practice when he took the job as Chief of Kenmore IM. When he arrived at Kenmore Zeev was confronted with an environment that was still recovering from the stresses that had been associated with the practice’s near death experience following the financial collapse of Harvard Pilgrim Health Care. In 2005 the spirits of the practice fell even further with the departure of our very popular CEO, Ken Paulus who most of us credited with having saved the practice.
My primary care practice and the central cardiology practice were located at Kenmore and I can attest to the dysfunctional environment that greeted Zeev.
Without repeating the whole story of how it evolved, even before 2008 when I became CEO, we were living in a time of increasingly uncertainty about the future. Even before the housing market collapsed in late 2008 taking investment bankers and the stock market with it, our world was uncertain. We were unsure how the world would respond to healthcare reform but sure that revenue would no longer increase by 8-10% each year on the same book of business. In response to our external assessment senior management wrote a strategic plan that was approved by the board that focused on cost reduction by controlling total medical expense, coupled with efforts to improve quality, safety and patient satisfaction.
To many it seemed imprudent to spend money to develop competencies when all anyone could see on the horizon was declining revenue relative to expense. One view was that we should save our surplus cash and hunker down hoping to survive the impending storm. I have shown it before, but here is the picture that Tom Congoran, our CFO, generated in 2009 to show the practice our unpleasant expectations. |
| | This simple presentation of reality showed the need to reduce overhead and preserve our financial integrity by reducing expense through efficiency and waste elimination and growing the practice to a size that was more appropriate to our fixed costs. That realization was central to deciding to become a Lean organization.
In mid 2009 we restarted our Lean journey in earnest. No longer were we trying to do it ourselves but we invested in ramping up with a partner, Simpler. We chose Simpler because of their results. They had worked with ThedaCare and Denver Health as well as many other groups and organizations like IHI. I soon discovered that the principles we were learning would lead us back to a reversal of “top down” management. An organization trying to become Lean with a focus on respect for those who do the work and with the desire to create value is a learning organization. Lean took us back to the principles of local involvement that respected subsidiarity and moved toward a “distributed form of leadership” that created many active leaders. Lean offered a way back to many of the essentials of the grand experiment that we had attempted in 1998-1999. It gave us hope that we could avoid some of the pain of what would surely be coming our way if the predictions we were making of a downward pressure on revenue with rising internal costs as health reform evolved in Massachusetts, came true.
Previous experience had shown that two years was a short time for preparation for a financial storm. My biggest worry as we began Lean was that we might not have enough time. I was constantly worried about our pace and progress toward the reduction of waste, improvement of quality, and the improved ability to satisfy patients with care that was efficient and effective. My fear was that we would not transform ourselves fast enough to avoid the pain that we had known before.
Thomas continues by saying:
... the book begins with a “foundational essay” that lays out the history of thinking about civic leadership in the U.S., including a linkage to the four great social movement dating back to the 60s and 70s: civil rights, grassroots, environmental, and women’s—all with common themes which “…threatened traditional power structures, radicalized and mobilized unheard of or disenfranchised voices and, at times, menaced the country with anarchy when institutions failed to change …”
The parallels between what has happened in our collective civil lives and what has happened within healthcare and what happened at Harvard Vanguard was not lost on me. In the “foundational section” the authors scored big points with me when they launched into an extensive review of the work of Professor Ron Heifetz, a psychiatrist who is on the faculty at Harvard’s Kennedy School of Government, and has written most of what I know about adaptive change.
Thomas points out that the the authors argue that almost all our 21st century challenges are complex in nature and cannot be solved with technical adjustments within systems. Radical change is necessary. The change that is needed exceeds the capacity of the “traditional 20th century paradigm of top down, hierarchical, authority-centered leadership.
I was amused when something similar to a PDSA cycle was subtly introduced as dependent on four competency that sound like standard work for Lean leaders.
...four competencies follow from the guiding principles. They rely on citizen activists’ ability to: diagnose the situation, manage the self, intervene skillfully, and energize others.
I am looking forward to the remainder of the book. Thomas’s review suggests that I will be reading about an “I to We transition”.
The book closes by coming full circle to a spirited advocacy: a shift from individualistic thinking to a “much more appropriate view for the 21st century…leadership as sharing responsibility for acting together in pursuit of the common good”
Within that description and within a Lean culture there is a compelling need for the creation of a host of problem solvers and an army of committed leaders distributed through every level of the organization. Thomas says the alternative is:
We could, of course, continue to play the waiting game, cynical bystanders one and all, waiting for a charismatic hero to gallop to the rescue, only to dash our hopes all over again…
Child Abuse Prevention Month
This last week I was attending an event in my new hometown where many people who are interested in the health of the community were in attendance. The main reason for the gathering was social and educational. It was the sort of thing that “retirees” do midday before they take a long walk.
I was not expecting the announcement that occurred before the main program began. We were all reminded that by “presidential proclamation” since 1983 April has been Child Abuse Prevention Month. There is much pain in our world that we often prefer not to experience or contemplate. In April I would prefer to think about the opening day of baseball rather than the fact that 646,261 children in our fifty states, Puerto Rico and the District of Columbia were victims of Child Abuse in 2014, or that 1,580 children died as a result of neglect and abuse.
Somewhere ten or twenty years into practice I began to ask myself why there were some patients that just could not respond to my outreach. They seemed reluctant to engage or enter into what I thought of as a natural doctor-patient relationship. If I was successful, it was a long and difficult journey for both of us. As I began to search for similarities in this population, it occurred to me that in almost every situation the patients had been abused or traumatized at some point earlier in their lives. I do not think people easily recover from being abused as a child. I am sure that for many of the more than 600,000 who do survive their abuse every year, the experience leads to a lifetime of continuing difficulties with trust. The legacy of abuse is more abuse and suffering. Just being open and aware of child abuse and giving it “a month of focused awareness” seems necessary but insufficient as a response to such a significant problem.
All problems that impact health can’t be addressed in a fifteen minute appointment every year or so. Our system of care needs to include what we know that can help. There is a body of research that has identified factors that can prevent and reduce child abuse and neglect.These factors include parental resilience, nurturing and attachment, social connections, knowledge about parenting and child development, social and emotional competence of children, and supports to parents. These actions and more can be reviewed in the 2016 Prevention Resource Guide: Building Community, Building Hope.
I hope that you will take a look. The problem of child abuse and neglect is complex and obviously not easy to solve or even improve. Neglect of the social determinants of health and the failure to correct many disparities that exist in our imperfect world are surely foundational causes that we must not ignore if we ever hope for a future world where we have:
Care better than we have ever seen, health better than we have ever known, cost we can all afford, …for every person, every time.
Texas Big is the Biggest and Another World
I have spent the last two days involved in a conversation at Houston Methodist Hospital. Houston Methodist sits in the middle of the Texas Medical Center which is a huge “city” within the city of Houston. The aerial view of Texas Medical Center which is the picture in today’s header is worth quite a few words of description. The picture reveals two skylines. In the distance is the skyline of downtown Houston. In the foreground is the skyline of the Texas Medical Center. It is the biggest collection of medical real estate in the world. On over 1000 acres there are the dozens of towers of over 54 non profit medical organizations. There are 21 hospitals! More than 100,000 people work in that 1.5 square mile medical city of which 20,000 are doctors. That’s not a typo. There are 20,000 doctors. An organizing factor has been the Baylor College of Medicine but there are many other medical education and research organizations. All of the medical institutions in the Texas Medical Center are both collaborative and competitive. It is a very interesting environment.
Houston Methodist is a huge part of the Texas Medical Center and it is the hub of a system that includes seven other hospitals across the greater Houston area. You can drive for 90 minutes on an interstate to get from one point of its system to the north to another point on the south. The same is true east to west. Being big is more than part of the culture, it is a reality in concrete and steel. I must say that my breath was taken away when we drove our rental car into the heart of the area. The closest memory I have to the experience was when I saw the canyons of Manhattan for the first time when I was eleven years old. Before Wednesday I had never seen canyons whose walls were huge hospitals.
Inside the buildings the resources seem unlimited, but there are other striking contrasts with the rest of the world. The huge system is still primarily financed by fee for service reimbursement, yet I never heard anyone talk about revenue as a motivation for what they were doing. I have never visited an organization where concepts of mission, patient centrality, evidence based practice, quality and safety were stressed more.
The people with whom I talked were committed to the highest standards of care. The discussions were about innovations that would improve the experience of care for patients and the professional satisfaction of physicians. They expressed a growing interest in population health and the overall health of their community, but their interest was not based in finance and no one was talking about preparing for a transition from volume to value. One executive was asked about why they were interested in population health and his answer was that their interest was not because they wanted to be an ACO. The driver of all conversation was how to improve care or the experience of care, including timely access and more efficiently using their resources.
What was missing for me were discussions about how to foster universal access and how to lower the cost of care. I never heard any reference to the total cost of care as a problem, yet the motivation of everyone seemed to be altruistic. The problems being solved primarily related to providing better care for those who looked to Houston Methodist for their care.
As I reflected on what I was hearing I was not judgemental. I realized that we solve the problems that press us. I was not so interested in cost containment until I realized that something I valued, universal access, was threatened or unlikely to be sustainable without efforts to reduce waste and lower the cost of care. I would love to see what the people I met in Houston would do if the problem that was at the top of their list was financing universal access. I expect that they would respond to the challenge.
I left the meetings encouraged for the future of healthcare in Texas because it is loaded with medical expertise. In a few discussions I did congratulate the people I was speaking with for having the foresight to be putting into place the tools and the competencies to accept risk if the moment ever comes, and I think it will. Until then I see them fully engaged in the continuous improvement of their practices within an economic system and collective values that are still working for them.
As I thought more about what I was seeing, I realized that the Texas Medical Center was probably more like most of this country than I had previously realized. We are a very heterogenous society with real differences from one region to another, and we always have been. Change is a slow process and the motivation for change resides primarily in a concern about the vulnerabilities of the present state. I did not see much that looked immediately vulnerable from either the outside or the inside of the Texas Medical Center. It will be interesting to follow what happens as the next few years go by. I am confident in their skills. I am sure they will do well and continue to serve their patients to the best of their ability no matter how the larger political discussions evolve. They have a great legacy of achievement to defend and they are dedicated to the mission of using all of their skills and assets to delivering the best care possible to their patients. The visit widened my sense of what good can look like.
I had a great time with great people in Houston and picked up a couple of new “Interested Readers”. Welcome, Pam and Sue, and thanks for some great conversations and your hospitality. Keep up your good work!
Next Stop, Galveston. Then Opening Day!
The forecast for New London, New Hampshire where I live for this weekend is pretty grim with cold rain for Saturday and a high of 30 with snow for Sunday. Winter will apparently be returning for an encore. I am happy to say that this weekend I will be taking my walks on the beach in Galveston where I will be introducing my wife to an old friend whom I have not seen for fifty five years. My family left Waco, Texas in August 1961. Through a reunion and Facebook I reconnected with a close friend who I have not seen since I moved away. Ironically he and his wife were in Cambridge for several years while he was getting his doctorate at the Harvard Divinity School. Their son was born while they got their care at the Cambridge practice of Harvard Community Health Plan while I was beginning my career at the Kenmore office just across the Charles River. Perhaps we even passed each other on the street and never knew it.
Life is just too good! My flight to Manchester will land just in time on Monday for me to tune into the 2016 Opening Day game between the Sox and Cleveland. I can feel it in my bones. The stars are all lined up. I am full of hope that this will be a big year and I am ready to see how it plays out.
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| Keep working and advocating for better care, stay in touch, and be well,
Gene
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