Alignment

                Alignment is another popular buzz word which has different meanings for different people. A recent survey of health systems leaders showed 48% say alignment is achieved when[1]
 
                 “the organization’s mission, vision, and goals, are supported by governance, strategy, and incentives.” Only   5% label alignment as “a financial model that incents providers and executives toward common goals.” This result is unsurprising as the predominant financial models today are not aligned with patients’ best interests, physicians’ best interest, or even organizations’ best interest. There’s huge overuse in health care that has at its root a payment system based on more tests and more procedures—a production model that doesn’t serve anyone well.”
 
                91% of the responders thought alignment between frontline clinicians and top executives was critical for organizational success, but only 30% thought their organization was extremely or very aligned in this regard. Opinions varied as to the causes of the disconnect, but one thread was the cultural differences between the clinicians and the organizational leaders.
                This is not about the culture of the individuals who serve in one of these roles, rather it is the unspoken assumptions about authority and purpose. David Hackett Fischer[2] devoted more than 700 pages to an analysis of the competing notions of liberty and freedom in American history, so it is a gross simplification to assert that freedom is derived from membership in a group, while liberty is granted to an individual by the group. At least until recently, physicians believed they had the freedom (and duty) to act, provided it was in the patient’s best interest, without reference to any other outside authority. Administrators, though, thought the organizational authority structure granted “privileges” to allow physicians to expend organizational resources. Both perspectives have validity, but they are not fully compatible. In practice, the differences, if thought about at all, were viewed as semantic or legal issues. But with the increased financial pressure, and the trend toward direct employment of physicians, the issue has become more acute.
                Direct employment was adopted by organizations as a presumed short-cut to alignment, but a recent paper argued health care organizations needed to get a better control of their costs if they were to survive, and clinical staffing and variation were prime areas.[3]

            “It is essential to address how the health system manages its clinicians, particularly physicians. This has been an area of explosive cost growth in the past 14 years as the numbers of physicians employed by hospitals has nearly doubled. In addition to paying physicians the salaries stipulated in their contracts, hospitals have been augmenting their compensation [in a variety of ways.] The growth of these costs rival those of specialty pharmaceuticals and the maintenance and updating of electronic health record systems. Fixing this problem is politically challenging because it involves reducing physician numbers, physician incomes, or both…Sustaining losses based on hazy visions of “integration” or unproved theories about employment leading to clinical discipline can no longer be justified.”
 
                So here we have the seeds for more disunion, particularly if we can’t find a way to meld the unspoken cultural assumptions each party brings to the table. Finding a way out will not be easy, but there is an unusual model that seems appropriate for health care organizations: The John Lewis Partnership.[4]
 
            “The John Lewis Partnership is a hugely successful enterprise, with annual revenues of nearly $14 billion, profits of more than $630 million, and 87,000 employees in England, Scotland, and Wales. Those employees work at two or Britain’s most admired retailers, John Lewis department stores and Waitrose supermarkets, both of which have carved out a powerful bond with customers, both of which have unveiled big innovations in branding, merchandizing and e-commerce. What truly distinguishes the John Lewis Partnership…is that it is 100% owned in trust for its employees. All 87,000 employees are considered partners in the business.
 
                Just as noteworthy, John Lewis operates as a full-fledged democracy that distributes power up and down the ranks. It’s a business in which employees and their elected representatives debate issues large and small. Democracy at John Lewis is not a metaphor or a state of mind. It is a system of management…[one senior executive said] “The focus of most companies is to improve financial capital. Our focus is social capital.”
 
                Imagine what that might look like in a hospital. Not only physicians, but nurses, technicians, environmental service workers and clerks would all have a say in how things got done. Of course, there would have to be some rules of the road—CMS and other licensing authorities have a big say in what can and can’t be done. Maybe the solution to alignment isn’t so much to pave over the conflicting perspectives of management and physicians, but rather to engage in dramatic democratization. Initial steps can certainly be taken in that direction by smart use of information technology, including discussion groups, Wiki technology, and so forth. But to be effective, these steps need to result in a system where decision-making and “power” are devolved from the few to the many.
Many health care organizations are not-for-profit, and it is not reasonable to expect those that are for profit to adopt this model. But maybe thinking more about social capital and what that means for daily operations does seem like a good idea—it might be an idea everyone could align with. This may seem hopelessly unrealistic, but it is the season of the year when we hope for peace on earth with goodwill to all. So, this doesn’t seem all that dramatic.
 
10 December 2018


[1] Swenson S, Mohta NS. Leadership Survey: Why Big Gaps in Organizational Alignment Matter. 22 March 2018. https://catalyst.nejm.org/big-gaps-health-care-organization-alignment. Accessed 28 March 2018.

[2] Fischer, David H. Liberty and Freedom. (New York: Oxford University Press, 2005.)

[3] Goldsmith J. Health Systems Need to Completely Reassess How They Manage Costs. 15 November 2018. https://hbr.org/2018/11/health-systems-need-to-completely-reassess-how-they-manage-costs.htm. Accessed 16 November 2018.

[4] Taylor B. Companies That Do Right By Their Workers Start by Elevating Their Definition of Success. 19 January 2018. https://hbr.org./2018/01/companies-that-do-right-by-their-workers-start-by-elevating-their-definition-of-success.htm. Accessed 23 January 2018.

Further Reading

Medical Care as a Commodity
Are big data and machine learning likely to solve the problem of uncertainty in medical practice?

On Strategy
 A central question for healthcare organizations as they face the future is what is our goal?  While taking care of patients might seem the obvious answer, it is the one that is usually not considered.

Politics and Medical Organizations
Organizational politics are inevitable, so recognizing the types and the advantages and disadvantages of each is important.

The Tragedy of the Commons
Recognizing the Commons is critical for success in an era of rapid change.

What Do I Owe? 
A discussion of unexamined assumptions about what physicians owe their hospitals.