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Wednesday, July 29, 2009

Keeping Your Brand Healthy After Physician Integration: Part I

The rapid restructuring of the physician services sector and resulting physician alignment, integration and employment models are presenting new brand building challenges for health systems, hospitals and physician organizations. Assuming the average primary care physician sees about 5,000 patients visits a year, back of the napkin math shows us that a health system with 100 employed physicians brings in a half million visits or so annually – with 300 to 400 physicians that number can rise upwards of 2 million. Now assuming that brand impressions are shaped through familiarity and frequency of use, then it’s easy to see how a large employed physician practice can be the catalyst for building – or unraveling – brand reputation.

You see, what we’re still learning in healthcare is that brand is built more powerfully through the customer experience than through promotions. The most creative imagery and well-crafted messages of killer advertising will not survive poor or inconsistent customer service – physician offices that don’t return patient calls, or don’t answer calls over the lunch hour when it’s most convenient for patients to make them, or can’t make timely appointments or see patients on time, or the poorly trained and groomed front desk staff, or the torn upholstery of the waiting room chairs, or the rushed appointment, or the doctor or nurse that enters the exam room, eyes on the chart and not on the patient. Or even worse – the missed diagnosis, the wrong medication, the preventable error.

The significance and potential impact of these everyday irritants and sometimes serious missteps cannot be underestimated once aggregated under the brand umbrella of a large health system. Every physician practice is now a branded access point, perhaps even the most critical of those touch points capable of enhancing or destroying brand reputation.

Brands are about business – growth, customer loyalty, profitability. It just doesn’t make good business sense investing millions to effect a large scale physician integration strategy if only to lose that and more by not purposefully addressing how brand equity will be preserved and enhanced.

So how can brand be unleashed to drive growth and innovation for the health system-physician enterprise? Well, that’s Part II – coming soon.

Karen Corrigan

Saturday, July 25, 2009

How to Lose a Nurse

The call to nursing came the summer my 15 year old daughter had a leg injury that landed her a desk job in a Nicaraguan clinic during a church mission trip to Vida Joven in the mountains north of Managua. Instead of joining her fellow teens in camp activities (made difficult enough even without a leg in a cast by the weather, terrain and primitive conditions), she joined a group of doctors and nurses that set up a temporary clinic to provide medical care to people in neighboring villages. Families, often towing five or six shoeless children, walked as far as ten miles to see the American doctors and receive much needed medical treatment for ailments ranging from intestinal parasites to skin fungus to respiratory impairments caused by sleeping in enclosed tarp huts where kerosene is burned to warm the chilly mountain air. Babies with birth defects, children suffering from malnutrition, young men with malaria, diarrhea, festering cuts – curses of the poor in developing countries.

My daughter spoke Spanish well enough to facilitate conversations between the doctors, nurses and patients. And she was put to work dispensing medications – everyday drugs we take for granted but precious to those that suffer while waiting months and months for the clinic to come to Vida Joven. She came home that summer eyes wide opened by the abject poverty of the people living in the western Hemisphere’s second poorest country.

She went back to Nicaragua every summer of her high school years, taking on greater responsibilities in the medical clinic and growing in the conviction that nursing was what she wanted to do. Back at home she searched for a university with a nursing program. She spent spring breaks and summers off building an orphanage in Boliva, nursing at a hospital for women and children with AIDS in Kenya, volunteering at a clinic in La Paz. One day she said to me, “Mom, I was born to be a nurse. I just didn’t know it until now.” Now being the day she came across a tiny rain-soaked boy of four or five stooped and shivering under a tree in Nicaragua – shoeless, hungry, sick. Something clicked for her. And six years later here she is – RN, BSN.

Last night she called me – distressed, angry – wanting to quit her hospital job of just one year after spending another twelve hour shift trying to care for too many critical patients with too few staff, missing supplies, inoperable equipment and physicians that don’t return calls when their own patients are heading south. Concerns tumbled out. The evening she couldn’t get the doctor or charge nurse to believe that her patient was septic (he was). The day that she held tight to a hypothermic patient using her own body warmth to try and raise the woman’s temperature because there were no warming blankets on the unit and no one to search for any. The night just six months out of school when she was the senior nurse on the floor. The critical care patients admitted to med/surg beds without the monitoring equipment or staff to keep them alive. The psych patient admission that punched her in the face. That one shift when the unit had twice the staff (‘don’t get excited,’ said the charge nurse, ‘it’s the show for JCAHO’), the next day when they were all gone. The countless meetings where nurses were invited to share their concerns and ideas. The weeks that ensued where nothing changed.

Her panic was palpable; seated in the fear that her patients are in harm’s way of a system that is just plain broken. And I heard what she wasn’t saying out loud.

That even in the jungles near Matagalpa, even in the slums of Nairobi, even in the makeshift clinics where a handful of professionals and a dozen suitcases of medical supplies somehow divide like fishes and loaves – she never felt as powerless or worried for the safety of her patients as she does in this nationally-ranked, Magnet-designated hospital.

And that breaks my heart.

Sunday, July 19, 2009

Is Service Line Success Embedded in Design or Execution: Part 4

This is the final installment of four posts on healthcare service line strategy and structure.

With Service Lines, Imitation is Not the Answer

The classic flaw of imitation is the assumption that someone else is doing it right.

For the service line management model to be an effective growth engine, providers must move beyond benchmarking and replication to forge a distinctive position in the market. The secret to competitive effectiveness is not to be better than the competition. But to be different in a way that is distinct, relevant and truly meaningful to your customer base -- by seeking different value-producing approaches to the market, by driving innovations in service delivery, by creating unique approaches to integration and service consolidation, by cultivating unique partnerships, by understanding how different degrees of centralization, delegation of authority, and functional specialization work together to achieve differentiation.

The key consideration for health care leaders is how those differences add value to the service line model in achieving the company’s strategic vision and goals.

So, the critical question for service line execs is how differentiated value is defined, created and delivered. This requires more than an aggregation of tactics, but a leadership-driven approach to identifying opportunities, crafting strategies to create a distinct and compelling value proposition, developing a effective business model and operating structure, forging physician partnerships, and prioritizing investments.

What's important to keep in mind is that service line management, in and of itself, is not the goal. When aligned to an organization’s strategy and configured to achieve results, it can, however, be a powerful model for creating and sustaining competitive advantage.

Karen Corrigan

Sunday, July 12, 2009

Is Service Line Success Embedded in Design or Execution: Part 3

This is the third installment of four posts on healthcare service line strategy and structure. Watch for the 4th post in coming days.

Brand vs. Service Line Management

In comparing and contrasting healthcare’s service line model with industry’s product or brand management model, fundamental differences are realized across key factors:

Market orientation -- A key difference between service line and brand managers (and among better performers and poorer performers of service line management) is the vantage point from which decisions are made – poorer performers operate from the inside out (“here’s my program – let’s see if we can find some customers”) versus outside in (we’ve identified segments offering significant opportunity for growth – let’s build a product to attract them.”). In competitive consumer markets, maintaining an external focus while keeping a direct line into the operations team to deliver against changing consumer requirements is paramount to success.

Strategic focus – Historically, the strategic focus for hospital service lines has been development of profitable clinical services to compete with other health institutions; improving quality, lowering costs, aligning physicians, and adding services all are aimed at creating a better offering. Competitive advantage, however, isn’t sustained by being “better” than the competition but from being “different.” Brand managers seek to create markets and new sources of revenue by finding new and different ways to meet customer needs, extending the life cycle of the brand and representative products, forging strategic partnerships to enhance product offerings, and developing proprietary approaches for channel leadership.

Competitive posture – The health industry’s supply-side orientation to strategy tends to favor defensive posturing. Service line initiatives are over-invested in similar activities amongst providers in a market to protect position and share, as opposed to proactive strategies to leverage strengths against emerging market conditions that offer opportunity for substantial growth. A demand-side perspective acknowledges that consumers have shifting needs that can be met in a myriad of ways. It opens up our thinking as to not only “who” but “what” we compete against.

Value innovation – Organizations that consistently perform above industry norms are those that better anticipate changes in competitive dynamics and continually innovate to create greater value for customers and the market. However, the health industry’s penchant for benchmarking and low tolerance for risk-taking sentences service lines to numbing sameness and marginal improvements. Value innovation does more than raise the bar – it resets the rules of competition by de-commoditizing health care services. The ultimate pay-off is substantial gain in growth.

Marketing – The traditional service line marketing toolbox has offered up a limited set of tactical activities to promote service line offerings and cultivate referral relationships. In consumer markets, marketing is a strategy-critical core business competency to create profitable exchange relationships between an organization and its publics. It is the principal process for creating and linking customers to the organization’s products and services. In comparison, the traditional industrial marketing model includes major functions of producing, packaging, pricing and promoting individual products.

Scope of responsibility and authority – One of the fundamental issues with the service line management model is lack of agreement as to whether service line leaders are operations managers, clinical leaders, business developers, marketing managers or some combination of the mix. A matrix reporting structure, which is often poorly defined, limits the manager’s ability and authority to achieve service line objectives. If we contrast this model to that where cross-organizational teams work for a brand manager who reports to senior executives, there are lessons to learn about lines of authority and accountability for performance

Performance metrics – In poorer performing service line organizations, performance objectives and measures of success are unclear and reward systems are not linked to achievement of specific goals. Even worse are those where authority and accountability are so misaligned that turf wars break out inside the very service line structure intended to “break down silos.” Consider the service line leader who is held accountable for volume growth and profitability, but has no authority to impact capacity, through-put or supply costs. In competitive consumer markets, metrics such as preference share, conversions to trial, percentage of revenue growth from introduction of new products, and repurchasing rates, among others, are leading success indicators.

Coming next: Imitation is Not the Answer

Karen Corrigan

Saturday, July 11, 2009

Is Service Line Success Embedded in Design or Execution: Part 2

The following is a continuation of an earlier posting.

The Disconnect Between Strategy and Service Line Structure

At the risk of boring repetition, structure should follow strategy. There is no universal ‘right’ way -- or ‘wrong’ way, except perhaps blind restructuring of clinical services into service lines without a defined strategy as to how value will be created and what capabilities and resources must be brought to bear effective execution.

Strategy then is not just an aggregation of tactics, but a leadership-driven approach to articulating a futuristic vision for how a service line intends to compete. To get to this point, health systems must develop a point of view as to how the market is likely to unfold, identify specific strategies to create a distinct and compelling market position and then create a business model and structure to effect achievement of its goals.

In its generic form, the product line and brand management models developed by industry leaders such as Proctor and Gamble and GE, are useful frameworks for designing an approach to service line leadership with the fundamental intent of optimizing the organization’s market position for a defined service line.

There may be more to learn today from the product or brand management models that evolved in the consumer goods and services industries as we address increasing consumer influence in the selection, purchase and use of health services and products. However, to be receptive to the advantages offered by brand management models, we must suspend the predominant notion about brands as communication devices and adopt an understanding of brand as the totality of customer experience resulting from organizational decisions regarding positioning, design, development and delivery of products and services.

Fundamental differences are realized across key factors. Part III will compare and contrast healthcare’s service line model with industry’s product or brand management model.

Join the discussion. What do you believe to be the key strengths and pitfalls of service line management models?

Karen Corrigan