• Industry: Healthcare
  • Type: Survey report
  • Date: 4/16/2013

Putting the strategies together 

While these strategies are not mutually exclusive, there are limits to how many components can be viably pursued at once. There are a number of dimensions of the strategic choices available. Perhaps the most significant are questions about the scope of market being served and the extent to which the model is reimagined.

This informs the strategy map in Figure 5 and it can be seen that some of the options cover more of the territory.

“Strategies based on small improvements and growth, while important, are not going to be sufficient to meet the challenges.”

The reality is that there is no silver bullet or off-the-shelf solution for providers; each will need to develop their own unique approach based on local conditions and the decisions made by the different players in the system.

Moreover, strategies based on small improvements and growth, while important, are not going to be sufficient to meet the challenges; wholesale change will be needed. Indeed, many hospitals will need to change their clinical, operational and business models much more fundamentally. This will require experiments and investment.

Figure 5

Small hospitals, in particular, find themselves threatened in this environment and will increasingly find benefits to being part of wider networks both locally (with primary and home care) and across wider areas (working with specialist providers). In many systems, primary care will also have to change radically to be able to provide the level of services and scale that is needed. Providers that have grown accustomed to running services in institutions are going to need to develop a range of new skills, take a different approach to managing risk and ultimately move many of their services out of their buildings and into the wider community. It seems likely that hospitals will need to reimagine themselves as the core of a health system and start to retrain staff, rethink their business models and think about their buildings and other assets in new ways.

Key takeaway points for providers

Providers will have to act quickly to meet these challenges. Health system leaders at our summit in Rome were very clear about what needs to change in their organizations in order to fundamentally alter the status quo.

  • Invest in leadership at all levels – University College London Hospitals has an internal leadership academy targeting the top 400 leaders in the organization.
  • Rethink internal structures – for example, the Erasmus Medical Center in the Netherlands has moved away from structures based around medical disciplines to ones closer to the needs of patients with multiple conditions.
  • Develop a focus on value and create new relationships with physicians and patients. Gary Kaplan, CEO of Virginia Mason in Seattle, has developed a new compact between the medical staff and the organization to engage them in helping to drive forward improvement focus of value.
  • Invest in strategies to get the best out of the workforce – for more on this, see Value walks: Successful habits for improving workforce motivation and productivity, a report by KPMG International.1
  • Use measurement, improvement and information to gain strategic advantage.
  • Build networks – both internally and internationally.
  • Learn from other markets and industry sectors.
  • There needs to be a greater focus on outcomes not inputs. Leaders need to empower managers and physicians and give them the freedom to innovate and act in order to deliver quality and best practices.

Back to top

“Leaders need to empower managers and physicians and give them the freedom to innovate and act in order to deliver quality and best practice.”

Leadership and culture

KPMG’s Global Healthcare conference featured a number of speakers who focused on the vital importance of leadership. This was not just about their personal contribution as leaders (which was clearly substantial) but rather about the importance of their teams, being humble about what needed to be accomplished, and being passionate about improvement. Indeed, much of the emphasis within organizations tended to fall on the followers (mid-level leaders and front-line staff), and how the leadership team created an effective culture that includes:

  • a clear set of values;
  • consistent leadership towards a shared purpose over a long period of time and, in particular, considerable stability and longevity amongst top leaders;
  • commitment to real and deep engagement from the medical staff;
  • a strong focus on the front-line, particularly the need to nurture and develop front-line and mid-level leaders. In all systems, this part of the organization was perceived as being both vitally important and underdeveloped;
  • an expectation that teams and individuals act according to the culture and are prepared to be held accountable for their performance; • the alignment of measures between medical, patient and organizational perspectives;
  • transparency of information, both internally and externally; and
  • curiosity about how other high-performing organizations achieve results.

This requires health system leaders to get basic operations, internal coordination, and the processes that support clinicians running very smoothly which, in turn, will improve quality and the experience of both patients and staff. But it is also the entry ticket to being taken seriously as a strategic leader.

It was clear there is a growing complexity facing all systems around the world. These include: regulators that are demanding ever more information; the growing complexity of the patient and the services they need; and the growth of internal and external monitoring systems.

The best leaders were finding ways to manage and even reduce this complexity by directing staff as much as possible by using outcomes (not detailed process targets) while at the same time creating space for them to innovate, experiment and continuously improve.

“I believe people should learn how to make more mistakes, take more risks, and risk public humiliation in the service of seeking new solutions and finding creative approaches to solve problems,”says Tim Harford, author and columnist, the Financial Times.

1 Value walks: Successful habits for improving workforce motivation and productivity. KPMG International, 2012.


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