Smart management practice key to health care reform success
Study identifies principles that promote improved quality, better outcomes
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Jul 22, 2009
Hospitals and other health care organizations are ill prepared to enact many changes that may result from sweeping reform to America’s health care system. The success of these reforms will require harnessing established management strategies to ensure that such “innovations” can be implemented effectively, according to a study published recently in the Academy of Management Perspectives and co-authored by Professor Rangaraj Ramanujam of the Vanderbilt Owen Graduate School of Management.
The health care industry has historically suffered from a high rate of failure in effectively implementing changes, ranging from new clinical guidelines or Medicare reimbursement procedures to error reporting systems. Despite extensive scientific evidence on practices, policies and technologies that yield improvements in patient care and cost efficiency, the National Healthcare Quality Report found that key measures of quality in health care have improved only about 1.5 percent since 2000.
“This pervasive implementation failure threatens to derail the progress we might expect from a re-imagined health care system,” said Ramanujam. “Our nation’s hospitals and health care centers need to take strategic steps to prepare to be at the forefront of change.”
As one example, Ramanujam points to technology for computerized physician order entry systems, which has been available for more than a decade and has been shown to significantly reduce medication errors. Yet only about 10 percent of all hospitals in the U.S. have implemented this system.
Why health care is prone to implementation failure
According to Ramanujam and his co-authors, several distinctive features of health care organizations collectively contribute to the widespread implementation failure. Such features include the high levels of interdependence, uncertainty and risk (e.g., harm to patients) in the delivery of care; extreme specialization in care providers’ roles; a predominantly individual-oriented system of incentives and disincentives; leaders whose specializations differ from their workers (e.g., health care administration versus clinical practice); and underdeveloped performance management and control systems.
“These elements make it very difficult for hospitals to initiate and coordinate change, and offer few incentives for providers to engage in the trial-and-error learning that is critical especially in the early phase of any implementation,” said Ramanujam. “Yet, the success of the coming health reforms will depend on the ability of health care organizations to rapidly implement wide-ranging changes in their administrative and clinical practices.”
Strategies for successful implementation
Ramanujam and other researchers tapped by the Academy of Management for the study, in collaboration with the Institute of Medicine, have identified proven business strategies and practice to improve hospitals’ implementation success. These include:
- Develop leadership capabilities at all levels in the organization, and promote transformational leadership processes that shift the focus of the workforce from individual to collective goals, such as a focus on creating a culture of teamwork or safety.
- Engage the workforce in developing performance measurement and control systems to help overcome distrust and resentment of these processes. For example, give targeted individuals an ongoing voice in system development, maintenance and evaluation; share decision-making authority with targeted colleagues; and foster regular communication and information dissemination.
- Frame implementation as a learning challenge, or a task that differs from regular practice and offers opportunities to explore new actions and relationships; this will encourage experimentation, persistence and collaboration.
- Create opportunities for workers to experiment in non-threatening ways, such as training, pilot projects, dry runs, and simulations for new clinical procedures.
- Measure and reward implementation efforts, especially at the group level, to motivate peer monitoring and increase workers’ willingness to collaborate.
“Taken together and in an integrated fashion, these strategies can serve as effective antidotes to the features that threaten advancement in health care today, and usher in an era that embraces innovation and results in better outcomes for patients and society,” said Ramanujam. “Administrators should tailor each approach to their own organizations’ specific cultures and systems in order realize their full benefits.”
The paper, “Why Does the Quality of Health Care Continue to Lag? Insights from Management Research,” appeared in a recent issue of the Academy of Management Perspectives, and was co-authored Vanderbilt’s Ramanujam, Ingrid M. Nembhard of Yale University, Jeffrey A. Alexander of the University of Michigan and Timothy J. Hoff of the University at Albany, SUNY.
Vanderbilt Owen Graduate School of Management is ranked as a top institution by BusinessWeek, the Wall Street Journal, U.S. News & World Report, Financial Times and Forbes. For more information about Owen, visit www.owen.vanderbilt.edu.