A doctor reviews an iPad in a glass hallway

At DHG Healthcare, our broader industry perspective is technically grounded in a concept we refer to as "Risk Capability." Since introducing this concept in 2019, we have helped hundreds of organizations better position themselves in an increasingly value-driven industry. Through those efforts, DHG Healthcare has helped identify and resolve significant barriers to success in realizing these strategies and, as a result, has learned a tremendous amount about the struggles of health systems in addressing a "risk capable" future state.

As we asserted in our article, Risk Capability 2.0 // Moving Beyond the Tipping Point, "strategy creation must be linked, in real time, to execution plans supported by enterprise performance optimization platforms." We identified this concept of ‘linkage' as perhaps the critical success factor along the Risk Capability path. Despite establishing this fundamental linkage between strategy and effective execution, it seems elusive to many healthcare organizations. We believe this failure to embrace the link is largely due to operating models that do not fully align the organization around planning, performance and accountability.

(Dis)Organization

Typical health system operating models and related viewpoints on organizational management protocols tend to evidence a rigid hierarchical system more akin to "command and control" military organizations than nimble, innovative start-ups or value-driven private equity firms. We believe this results in a less-thoughtful adherence to historical archetypes, planning and performance goals that are not aligned with the requirements of Risk Capability and a lack of accountability to the more challenging goals required in a sustainable healthcare future state. The standard-issue organization structure consists of:

  • A board of directors of a hospital comprised mostly of local and perhaps (depending on institutional size and brand) national business leaders;
  • A hospital CEO who reports to the board; and
  • Chiefs under the CEO who are generally asked to interpret a perhaps vague vision through the lens of their personal responsibilities and associated agendas; Various leaders of nurses, HR, IT, finance and other functions who are often left to do their best operationally with little context for strategic goals or initiatives; Clinical managers who worked their way up the ladder who may have little or no formal business or management training; and
  • Clinical and support teams who are left to explain a new portal or process to patients and their families with little known connection to the overall system strategy.

Most of these individuals, and some of their associated teams, were called to healthcare to serve and set about their daily routines doing their absolute best to serve patients and their caregivers. Yet, we have found that there is often little coordination among them and limited connection to the overall organizational strategy. In fact, we often observe fundamental processes working against the achievement of strategic goals.

Consider...

How many times have you seen a strategic plan published after the budget cycle? Or a budget that is created independently of the endorsed strategy? Such dynamics leave teams pondering how to execute against a strategy without allocated funds.

How often do you see teams working on competing or, if lucky, complimentary projects with one team completely unaware of the goals and objectives (or, oftentimes, even the existence) of the other? This dynamic creates inefficiencies, risks the creation of duplicate functions and spend, and often results in an unhealthy, or even toxic, working environment.

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