The active members of that committee include:

Polly Bednash, PhD, RN, FAAN, Executive Director, American Association of Colleges of Nursing; Roger Bulger, M.D, President, Association of Academic Health Centers; Paul Griner, M.D., former President, American College of Physicians and currently Vice President and Director, Center for the Assessment and Management of Change in Academic Medicine, Association of American Medical Colleges; Federico Ortiz Quesada, M.D., Director, International Relations, Mexican Ministry of Health; Stan Pappelbaum, M.D., President and CEO Scripps Health; Richard Riegelman, M.D., M.P.H., Ph.D., Dean, School of Public Health and Health Services, George Washington University; Henry Simmons, M.D., President, National Leadership Coalition on Health Care.

I began to look at health care organizations from the point of view of learnings from my work with some of the most advanced companies in telecommunications, energy, banking, engineering, among others. In my Harvard Business Review article (Nov-Dec, 1997) on automobile production, I showed the failure of just taking the best technical solutions including lean production and total quality management without integrating them in a social system with strong values. In my consulting work, I have seen that the best companies are moving to a post-bureaucratic organization, a "learning mode of production" which is defined by continual innovation, organizational learning, shared understanding of purpose and values, empowerment of front-line employees, and the capability to create teamwork across functional boundaries. Some of these companies have advanced by recognizing that their success depends not only on developing the internal social system, but also on partnering with suppliers, customers, unions and community organizations to create a business ecosystem based upon collaborative planning and mutual learning. The health care industry is in an early competitive phase and in need of learning from advanced models. This is particularly the case for academic health centers.

Health care has traditionally been a cottage industry with a craft mode of production. The positive values were expertise, caring and mentoring. The negatives have been cost and variability. Managed care brought with it a manufacturing or industrial-bureaucratic mode of production. The positive values were cost containment and process control. The negatives were disempowerment of physicians, finance driven decision-making, and a climate of resentment and distrust. To integrate the positives of both craft and manufacturing modes, some health care organizations are moving to the learning mode of production which requires visionary and interactive leadership.

In September 1998, I presented this thesis to the annual meeting of the Association of Academic Health Centers. This was well received and my talk was published as the opening chapter of the AAHC's book, Creating the Future: Innovative Programs and Structures in Academic Health Centers, (1999).

At the March 1999 meeting, I led an AAHC workshop where leaders filled in a gap survey, based on elements of a learning organization and discussed ways to close some of the gaps and to engage and motivate health care professionals in this process. I was also invited to give a keynote speech to the March, 1999 annual meeting of the American Association of Colleges of Nursing.

My colleagues and I made study trips in 1999 to the University of Rochester Medical Center, Intermountain Health Care, Penn State Geisinger, Aetna US Health Care Southeastern Region, University of Michigan Medical Center, Shands-University of Florida, and Mayo Clinic, Rochester, Minn.

At each study site, over a three day period, we interviewed approximately 20 leaders for one hour, including the top leadership, using a gap survey to facilitate the interview. Before leaving, we presented feedback sessions and after our return sent a draft report with the request that errors be corrected.

In studying these organizations, we explored leadership practices and visions. We tried to answer the following questions:

a. Have these organizations developed a culture or social system model that guides them? By culture or social system, we mean the alignment of the hard elements of the organizational culture, the strategy, systems (quality, information, human resources), and structures, with the soft elements, the shared values, the style of relationships, and the skills developed and practiced throughout the system. Have they integrated the different logics of hospitals, physicians, and clinics? For academic health centers, how are they integrating the different requirements of the clinical, research, and educational missions?

b. How is the organization led? What are the values of the stakeholders? Are these values aligned with the organization? Do professionals understand a vision? Do they know what it takes to sustain the organization financially? Is there a dialogue about implementing the vision?

c. How do these organizations use information systems? How important is evidence-based medicine in their strategic thinking?

d. Are patients becoming partners in their care?

e. Are these organizations developing partnerships with payors and community-based organizations, including local government?

Study Results

• Developments of evidence-based medicine. Understanding key processes, decreasing variability (Intermountain is a leader).
  

• Clinical programs (Intermountain), product lines (Rochester) that are patient focussed and cut across departmental lines. These require exceptional leadership (Mayo's group practice is an alternative patient focussed system.)

• The feudal model of academic health systems that results in separate fiefdoms that make it difficult to develop patient focussed programs that cut across the silos. Also, different department incentives and IT systems. Added to this is the dominance of research as the road to tenure and its importance to the prestige of institutions. Clinical leaders in these organizations complain that researchers cannot be excellent clinicians when they see patients once a week (Michigan).

• Disincentives to quality (evidence based practice). When organizations invest in decreasing variation in practice, and finding the best processes and clinical pathways, often there is no reward. Not only does it take time and money to do outcome and protocol research, there is also the difficult task of educating and persuading physicians to change practice behavior. In the context of fee for service, the result may be higher quality care, but lost revenue. This is especially the case when physicians invest time and energy in teaching patients with chronic problems (e.g. diabetes, asthma) to manage their condition. The payoff in less emergency treatment is only gained after two years and only benefits an organization if the patient stays in a health plan with upfront payments.
  

  Furthermore, customers are not choosing physicians on the basis of clinical quality. The published outcome results in NY state for CABG surgery, neither increased market share for the best hospitals nor lowered it for the worst. Patients tend to be loyal even to the more inept physicians, as long as they are treated well.

• Conflicts between hospitals and physicians (Intermountain, Michigan). These two groups operate with different logics. Physicians are trained in the craft mode of production and want the autonomy and authority both to do what is best for their patients and optimize their own rewards. Hospitals operate in the industrial-bureaucratic mode and attempt to establish centralized control, including budgeting and standardized practices based on rational principles.
  

• Conflicts between specialists and primary care physicians. This is a particular problem for academic health centers where research focussed specialists treat primary care physicians as second class citizens. Many still believe that patients will come to them because they are at the forefront of research. They underestimate the importance of referrals and ignore evidence that patients are turned away by poor service.

• For academic health centers, creating a matrix organization of departments and group practice. Departments should have the responsibility of maintaining excellence, teaching and developing knowledge while the group practice focusses on quality of service. The alternative of a department running a product line has the risk of making some departments feel left out and resentful and of replacing clinical leadership with triple threat chairs who quickly burn out.

• Partnering with payors and companies. Michigan's partnering with the Ford Motor Company and Intermountain with Becton-Dickinson are extremely promising, because these relationships provide structure and incentives to develop evidence-based practice, patient education and a focus on health as well as illness. By connecting through a health plan, both parties gain by investing in long-term cost reduction.
  

• By adopting a learning logic, hospitals and physicians can transcend their conflicts and together develop an integrated delivery system, particularly when they can establish partnerships.
  

• The relationship between primary care physicians and specialists (ambulatory care clinics and hospitals) will be strengthened by IT systems that include order capability, records, test results, costs, best processes and outcomes. Good technology can in this case overcome bad relationships.

Supported by a continuation of our grant, in the year 2000, we will visit up to five more organizations, chosen in consultation with the advisory committee. These may include:

• Kaiser-Permanente (California or Group Health of Puget Sound)
• Johns Hopkins-
  
• Mayo Clinic in Jacksonville, Florida and Scottsdale, Arizona
• Vanderbilt University
• Dartmouth - Hitchcock
• Inova-
• A well-run for-profit system.

We also plan to write a report on what happened at Penn State-Geisinger and the lessons for other mergers.

The results of the study will be used in reports to the advisory committee, the organizations studied, the Association of Academic Health Centers and AAMC. The cases, findings and recommendations will be written in a book: Leadership for Health Care in the Age of Learning.

The Project on Technology, Work and Character was founded by Michael Maccoby in 1970 and was affiliated with the John F. Kennedy School of Government, Harvard University until 1990. It is a not-for-profit public foundation that studies the relationship between leadership, organization, technology and human development.

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