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Final Report to the Robert Wood Johnson Foundation
Leadership for Health Care in the Age of Learning, 1999
Michael Maccoby, Ph.D.
My colleagues and I have visited and interviewed leaders at seven health care
organizations during 1999. These were organizations proposed by the project's
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
- 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?
All of the organizations we studied are experiencing change. Academic health
centers in particular have been shocked by cost pressures. Demands for better quality
and cost effective care are stimulating new approaches:
However, health care organizations are running up against a number of factors
that impede progress. These include:
- 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.)
From our interviews and dialogues, we begin to see ways in which these health
care organizations can move in a positive direction.
- 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
- 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.
To overcome the distrust we find in the organizations studied, leadership proves
essential. Top leadership not only can provide a meaningful vision; it also can give
an organization a spirit, a soul, which makes everyone's work more meaningful.
This kind of leadership makes decision-making and the logic behind it transparent.
It involves people in decisions that affect their working life. It communicates by
leading interactive dialogue. And it develops distributed leadership throughout the
organization, the operational leadership essential for clinical programs, learning
better ways of practice and partnering.
- 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:
I will visit these locations with one or two associates. These may include: Barbara
Lenkerd, Ph.D., Richard Margolies, Ph.D., and Doug Wilson, Ph.D.
- Kaiser-Permanente (California or Group Health of Puget Sound)
- Johns Hopkins-
- Mayo Clinic in Jacksonville, Florida and Scottsdale, Arizona
- Vanderbilt University
- Dartmouth - Hitchcock
- 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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