CVS Stops Tobacco Sales: Retail and the Consumerization of Healthcare

By now you have heard the news: CVS Caremark Corp announced that it would stop selling tobacco products at its 7,600 stores by October, becoming the first U.S. drugstore chain to take cigarettes off the shelf. The decision follows several recent indicators bolstering CVS Caremark’s position in the healthcare market. In December CVS said it expected its pharmacy benefit manager revenues to rise between 7.25 percent and 8.5 percent in 2014, easily outpacing growth of 2 percent to 3.25 percent in its retail business.

CVS and pharmaceutical distributor Cardinal Health Inc announced a 10-year agreement to form the largest generic drug sourcing operation in the United States. A month earlier it said it was buying Coram LLC, Apria Healthcare Group Inc’s specialty infusion services business unit.

In our strategy work with healthcare clients, we work on simulated scenarios of the future as a way of mapping the Terrain–Based Strategy. Two of these realistic scenarios are the consumerization of healthcare and retail healthcare. When these scenarios are discussed, we view them as both as opportunities and as threats. Players like CVS, Walgreen, Walmart and even Apple will continue to shift their business models to take a bite out of the 3 trillion dollar healthcare market.

The CVS announcement should be a surprise. It is an example of our simulated strategy models becoming more of a reality. This strategic shift is what we talked about in a previous blog post in which consumer engagement becomes a key wave of disruptive change >>

As the retail consumer market builds via public and private exchanges, consumers will use their healthcare dollars to actively vote for better care. Wave 1 population-health managers will invite extra-industry players into the market to improve their value proposition to the consumer and to increase points of engagement. Some extra-industry players will barge in with disruptive (and much more valuable) models, as we have already seen with convenient-care models in pharmacy chains.  With the convergence of electronic health records, personal health records, cloud computing, health kiosks, personal genomics, mobile apps, and home-based monitoring, consumers will expect and demand personalized real-time access to health services. Wave 2 will be driven by pent-up consumer demand from aging baby boomers and tech-savvy Millennials. Players like Rite Aid, Wal-Mart, Walgreens, IBM, and tech/social media companies are already entering the healthcare value chain.

How will this impact business?  By creating new opportunities which are far more lucrative than dwindling cigarette sales. CVS executives said they’ll replace some of lost cigarette sales through smoking cessation programs and will offer more programs to members. CVS also said the programs will be also be a key selling point as it tries to land more corporate contracts this year.

Some of this is already being “blamed” on Obamacare, but what we are really seeing is a shift to value.  The consumerization of healthcare, like the consumerization of IT, is user or patient-centric. It will bring us to a better understanding of customer needs and wants – and find faster and cheaper ways to meet them.

Ask yourself: what does it mean to have CVS, Walgreens and Wal-Mart provide access to care? How would that impact your business and most importantly how will you differentiate your services around quality, outcomes and value!!

Welcome to the brave new world of retail healthcare!

Physician Leadership: An Interview with Dr. Daniel Kollmorgen

Dr. Daniel Kollmorgen is a surgical oncologist, sometimes called a cancer surgeon, practicing with the Iowa Clinic in Des Moines. A graduate of the Physician Leadership Institute, Dr. Kollmorgen is the medical director of the John Stoddard Cancer Center.

How do you view physician leadership?  Can physician leadership be taught?

I think the definition of leadership is evolving. The variety forms of leadership can take is one of the things I relearned in the year-long Physician Leadership Institute sessions with Mo Kasti.   What does it mean to be a leader? It’s not always the visible, captain-of-the-ship leading the charge.  There’s a lot of different ways to lead, and I think that is what is important today. Some people have different skills, but leadership is not just stepping up to be the CEO. It can be applied at every position and the best leaders adjust to each situation.

How does physician leadership impact work performance? Have you changed how you behave?

I think empathy from a leader is as important as command and control. When I’m in the OR, it’s the captain-of-the-ship model, the buck stops with me. But I’ve learned the importance of relationships, being correct every time is not as important as maintaining relationships. Relationships build success for the long run.  How do you help others get to their goals? In the leadership class I learned about myself, how I’m perceived, and it’s not the same for everyone. I became far more aware of how others perceive me, getting feedback on how my actions impact the team.

Self-awareness is huge, especially when you are in a leadership role where people might be intimidated by your position. You have to hold yourself back, and remind yourself to be a friend, a teacher, or a father. By encouraging others to participate and engage, you build a team for the long run.  You have to learn how to switch hats – I have good days and bad days. Taking the leadership class improved my leadership skills and self awareness but it doesn’t provide a foolproof formula.

Who should be enrolled in physician leadership?

I think there are significant benefits to wide participation. First, there’s succession planning. Leaders need to be developed from within the local medical profession. Secondly, and more importantly, is the common language we share which comes from sharing the learning experience.  We build a common lexicon and experience, which helps align us across different specialties and areas.  You get a better understanding of where everyone is coming from, even if you don’t use their strategy.  The spillover into your personal life is significant as well. Trust is a relationship-building tool across all human interactions. The journey is about going from being “unconsciously incompetent” to “consciously incompetent” and then slowly evolving and becoming “unconsciously competent.” I’m still catching myself as I fall back into old habits.

How has physician leadership impacted your business?

The biggest difference has been the breaking down of silos across our multi-disciplinary group.  At the board and committee level we’ve shared common experiences that brought us all closer together as individuals.

We’re not just business associates and partners, we’re friends.  We’ve built shared values and experiences.  I have a better understanding of the colleagues in my class. I recognize how important group activities and culture building is in the greater scheme of things.  We’ve built a stronger business culture, with a common vision, a common purpose; that’s powerful.  It’s helped make the big business decisions less difficult – you don’t have to go to the wall to get 100% input on every decision.  We trust each other to do the right thing, in ways we probably would not have earlier.

Is physician leadership a prerequisite for the navigating the turbulence in the industry?

If physicians want to maintain, or have any say in the future direction of healthcare, they are going to have to see the bigger picture.  If you can’t lead, engage, and participate you’ll become just a cog in the wheel. I think that physicians know what’s best for the patients and that without physician leadership, we won’t be able to make our voices heard. Physician leadership can eliminate barriers between disciplines and the administration. Again, the importance of relationships cannot be stressed enough.

Why Leadership Development Programs Fail

The January issue of the McKinsey Quarterly includes a timely discussion on four common, avoidable mistakes companies make in the implementation of their leadership programs:

1) Overlooking context

2) Decoupling reflection from real work

3) Underestimating mind-sets

4) Failing to measure results

Each one of these pitfalls is addressed in the design and execution of the physician leadership sessions developed by the Physician Leadership Institute. Let’s examine each of these in detail:

According to the McKinsey article, too many training initiatives rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organizational culture, or CEO mandate.

Here’s how the authors frame the context debate:

In the earliest stages of planning a leadership initiative, companies should ask themselves a simple question: what, precisely, is this program for? If the answer is to support an acquisition-led growth strategy, for example, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the answer is to grow by capturing organic opportunities, the company will probably want people at the top who are good at nurturing internal talent.

Focusing on context inevitably means equipping leaders with a small number of competencies (two to three) that will make a significant difference to performance. Instead, what we often find is a long list of leadership standards, a complex web of dozens of competencies, and corporate-values statements. Each is usually summarized in a seemingly easy-to-remember way (such as the three Rs), and each on its own terms makes sense. In practice, however, what managers and employees often see is an “alphabet soup” of recommendations. We have found that when a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business—such as high-quality decision making or stronger coaching skills—it achieves far better outcomes.

Our approach takes context into account in its very design. Our physician leadership model is purpose built around the observed challenges in the field.  And to make sure the focus is on the right topics, participants have too undergo a 360-degree assessment before they start our programs.  The assessment is used to tailor sessions for each participant, ensuring that the team curriculum is balanced with individualized dimensions.

Decoupling from Work
The authors view is presented as follows:

When it comes to planning the program’s curriculum, companies face a delicate balancing act. On the one hand, there is value in off-site programs (many in university-like settings) that offer participants time to step back and escape the pressing demands of a day job. On the other hand, even after very basic training sessions, adults typically retain just 10 percent of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing. Furthermore, burgeoning leaders, no matter how talented, often struggle to transfer even their most powerful off-site experiences into changed behavior on the front line.

The answer sounds straightforward: tie leadership development to real on-the-job projects that have a business impact and improve learning. But it’s not easy to create opportunities that simultaneously address high-priority needs—say, accelerating a new-product launch, turning around a sales region, negotiating an external partnership, or developing a new digital-marketing strategy—and provide personal-development opportunities for the participants.

Our physician leadership academy approach does both. We start by first building up the foundational attributes of physician leadership, using our physician leadership model.  This is followed by action projects where cross-functional teams embark on their challenge projects – fixing some of the organization’s most pressing concerns.  The impact of these “action learning” projects allows the physician leader to “be, know, and do” in ways tied directly to business performance.

Change won’t happen if minds don’t change. Here’s how the issue is described in the McKinsey article::

Becoming a more effective leader often requires changing behavior. But although most companies recognize that this also means adjusting underlying mind-sets, too often these organizations are reluctant to address the root causes of why leaders act the way they do. Doing so can be uncomfortable for participants, program trainers, mentors, and bosses—but if there isn’t a significant degree of discomfort, the chances are that the behavior won’t change.

In healthcare, the issue is no different. A common response is as follows: “I am already a leader, why do I need leadership training?”  Our physician leadership programs are designed to change minds. The “expert” individual-contributor culture of the medical profession fosters individual leadership, but fails at building organizational leaders.  We help these “experts” step beyond their comfort zones to become organizational leaders.

Measuring Results
The final obstacle to change is lack of accountability. Here’s how the article states the issue:

We frequently find that companies pay lip service to the importance of developing leadership skills but have no evidence to quantify the value of their investment. When businesses fail to track and measure changes in leadership performance over time, they increase the odds that improvement initiatives won’t be taken seriously.

Too often, any evaluation of leadership development begins and ends with participant feedback; the danger here is that trainers learn to game the system and deliver a syllabus that is more pleasing than challenging to participants. Yet targets can be set and their achievement monitored. Just as in any business-performance program, once that assessment is complete, leaders can learn from successes and failures over time and make the necessary adjustments.

The article goes on to suggest an important way to measure the efficacy of leadership training: “One approach is to assess the extent of behavioral change, perhaps through a 360 degree–feedback exercise at the beginning of a program and followed by another one after 6 to 12 months.”

At the Physician Leadership Institute, we use this 360-feedback approach, coupled with another performance-based metric – the actual ROI of the action-learning projects commissioned through our programs. This allows all involved to see the impact of physician leadership at both individual and organizational levels.

Finally, we make sure that our physician leaders understand that the transformation is a journey that never ends. All our programs include an ongoing leadership component that ties back to the organization’s strategy and purpose.

Physician Leadership: An Interview with Dr. Lennox Hoyte

Dr. Lennox Hoyte is a board certified OB/Gyn physician and fellowship-trained in Urogynecology and Female Pelvic Medicine and Reconstructive Surgery. He treats women with prolapse, bladder and bowel incontinence, overactive bladder, childbirth related pelvic floor injury, and complications related to vaginal mesh surgeries. He offers a wide range of successful surgical and nonsurgical therapies to treat these problems, specializing in advanced robotic surgery to correct vaginal prolapse, and is one of the leading robotic prolapse surgeons in the world.

In addition to his role as a clinician, Dr. Hoyte is active in the development of intellectual property related to the practice of medicine; he has filed and obtained US patents on devices ranging from bladder drainage aids, to instruments for enabling prolapse surgery, as well as methods for accurately measuring intravascular blood volume. He is also Chief Medical Information Officer for the USF Physicians group, tasked with designing an electronic health record optimized for delivering high quality healthcare outcomes, while decreasing the documentation burden on providers .

How do you view physician leadership?  Can physician leadership be taught?

Traditional medical training is based on the idea of becoming the best individual, becoming masters in our specialties. This training process was designed for a time when physicians ran the healthcare enterprise, and everyone accepted healthcare to be an extremely hierarchical arrangement, with doctors sitting on the top of the pyramid.  And this is something we have been taught all our lives. The traditional system was based on the master-apprentice approach, where seniority conferred authority.

Let me explain: As a student, you start by getting the best grades so you can be the top of your class to create the most competitive medical school application.  You work hard to differentiate yourself, and demonstrate your uniqueness. In medical school, you work hard again to be at top of your class, so you can be picked by the best residencies. Then, predictably, you’re trying to be the best resident, in order to be accepted at your chosen fellowship, or land the best job.  Then you go for a fellowship, and guess what – you’re trying to prove that you’re the best fellow.  This sequence does not naturally lend itself to the kind of training required for leadership.

For me, leadership entails something entirely different. It’s about inspiring individuals to work together to achieve amazing results. It is about bringing ordinary people together to accomplish extraordinary things.  The leader is not the one with the best ideas, but rather the person that inspires others to come up with the best ideas, and choose the ones that are suitable for solving the problem at hand; to obtain agreement among team members and stakeholders, and to guide the team so that they obtain the desired results. In so many ways, I see leadership as the job of inspiring others to achieve, to fire them up, and aim them at the problem to be solved. It requires a unselfish mindset that puts the team and project first.  That’s quite a different mindset from what we are taught in the traditional path of medical training.

Physician leadership can be taught, and this teaching must encompass the entire career, starting with medical school, and continuing through clinical training, and lifelong professional education after formal training is completed.

How does physician leadership impact work performance?

For us at USF Health, many of us were inspired by our former Dean Dr. Klasko, who presided over the creation of USF Health.  His objective was to create an collaborative approach to healthare, which led to the integration of the University of South Florida Morsani College of Medicine, the College of Nursing, the College of Public Health, the College of Pharmacy, the School of Biomedical Sciences, the School of Physical Therapy and Rehabilitation Sciences, and the Doctors of USF Health.  For him, physician leadership was prerequisite for this integration and collaboration. The Physician Leadership Institute (PLI) itself was a spin-off from this exercise in collaborative innovation.

I remember how we participated in a specific workshop with the Physician Leadership Institute in which we were challenged to find a solution to a problem. The team stood around in a circle and tried to accomplish the challenge, with modest success. No one was speaking up.  It occurred to me that, as individuals who are trained to be right, physicians face an element of risk in voicing ideas or opinions that may be wrong. This leads many to avoid speaking up unless they are 100 percent certain that they are right. But this is not the way that unbelievably amazing things get accomplished. Amazing things get accomplished when we start out with less than perfect ideas and progressively improve them to get to the results we want to achieve.

I realized then, that the job of the leader is to “make it safe to speak up”.  I offered a few suggestions, which were not very good ones, but what I learned and witnessed, was that the initial, modest ideas led others on the team to offer progressively higher quality ideas.

Soon, we were hearing ideas from everyone, and the best solution came, unexpectedly, from the physician who was the quietest one in the room.

It’s like when you gather around and ask your friends to start telling jokes.  The first jokes aren’t very funny, but then people loosen up and start telling funnier and funnier jokes.  The leader is the one who breaks the ice and makes everyone comfortable.

As a clinical fellowship director, along with our other faculty members, we produce specialists in female pelvic medicine and reconstructive surgery.  Rather than apply the traditional, hierarchical, authoritarian work environment familiar to medical trainees, my PLI training and subsequent experiences directed me to become an enabler/guide instead of a boss, or foreman.  I seek to become a stepping-stone for my trainees – to help them learn, grow, and master our sub-specialty; to serve as a launch pad for them to do greater things.

In my role, I have the privilege of watching our fellows grow their clinical capabilities, work collaboratively, cover for each other, produce amazing results, while building a team culture above and beyond what I have seen in training before. The team feels more like a family now, and I have to say, our fellows are doing magnificently, succeeding beyond our wildest expectations.  Healthcare employers are taking note as well. Our fellows are being considered for some of the most competitive employment opportunities. That makes me think that we are producing a quality product.

What would you tell someone who is skeptical of the idea of physician leadership?

I would ask them to experience it before passing judgment.

Has physician leadership helped you beyond the workplace?

Doctors do not want to fail at anything we do. In fact we practice risk avoidance and have made it an art.  This is good in some areas.  In other areas, however, it leads to scarcity of innovation, and keeps us boxed in, victimized by our current set of problems.  Physician leadership training has taught me to use failure as a tool for improvement, which leads to future successes. If you’re not failing, you’re not creating opportunities for future successes.

Each specialty has a set of fundamental principles, an evolving knowledge base, and the leader needs to master these, in order to be able to guide and inspire the team. I also believe that if you take care of the basics, the fundamentals, the rest takes care of itself.  This first lesson of leadership is something I try to practice in all aspects of my life.

What else would you like to add?

As our industry is challenged to improve accountability and outcomes, physicians are going to need to drive the change.  For example, most doctors (myself included) do not know the costs of the treatment plans that we offer our patients. Many of us are disconnected from the business side of activities. I think that this is unacceptable. We need to gain a better understanding of the costs of the services that we offer to our patients; so that we can help to drive these costs down.

Also, because of the increasingly interdisciplinary nature of patient care, doctors will be required to become more collaborative team players, skilled at initiating and managing change.  That can’t and won’t happen without physician leadership.

Volume to Value: Three Waves of Disruptive Change in Healthcare

As Michael Porter has been telling us, the healthcare transformation will move from us from a focus on cost-reduction to delivering value. Performance is measured in terms of value which depends on outcomes and is organized around the patient (customer).

But just how will this transformation come about?

For starters, we need to “think different” and ask, “What’s best for the patient?” That simple question shifts the point of business design and leads to incredible patient health improvements and better value, according to veteran strategist Adrian Slywotzky. The transformation will include three waves of innovation** outlined below.

Healthcare providers focus their care model on patient needs. Physicians break the cycle of transactional patient visits that generate a diagnosis and a standardized, non-personal treatment plan. Physicians shift from a one- size-fits-all approach to a population-health approach, aligning care-team resources to meet the needs of different patient segments (e.g., healthy, urgent care need, chronic disease or multiple chronic diseases). Patients with different needs are treated by care teams designed to meet the unique needs of the patient—this is the essence of population-health management.

As the retail consumer market builds via public and private exchanges, consumers will use their healthcare dollars to actively vote for better care. Wave 1 population-health managers will invite extra-industry players into the market to improve their value proposition to the consumer and to increase points of engagement. Some extra-industry players will barge in with disruptive (and much more valuable) models, as we have already seen with convenient-care models in pharmacy chains.  With the convergence of electronic health records, personal health records, cloud computing, health kiosks, personal genomics, mobile apps, and home-based monitoring, consumers will expect and demand personalized real-time access to health services. Wave 2 will be driven by pent-up consumer demand from aging baby boomers and tech-savvy Millennials. Players like Rite Aid, Wal-Mart, Walgreens, IBM, and tech/social media companies are already entering the healthcare value chain.

Given a mature retail health market with fully functional population-health managers, national brands, and fully integrated Web 2.0, expect viral health innovation adoption curves. Imagine holding a mobile device up to your child’s ear and transmitting the relevant biometric information to the retail health cloud for an immediate diagnosis and treatment plan. Imagine a $100 saliva-based genomic-sequencing test at a walk-up kiosk—available in 50,000 retail health stores—along with a personalized health plan and a mobile app or avatar to help navigate your personal health profile. The industry is already on pace to deliver. Will we be ready to understand and manage the implications of our personalized genomic sequence?

These waves of innovation are not fanciful thinking, but the shape of things to come.

Healthcare institutions are going  to face real challenges as they struggle to make the shift to these new paradigms of the dawning Health Age. To do so will require engaged physician leadership at all levels of the organization.

Are you ready?

**The Volume-To-Value Revolution: Rebuilding the DNA of health from the patient in, Tom Main, Adrian Slywotzky, Oliver Wyman 2012.

Daniel Goleman on Focused Leaders: Lessons for Physician Leaders

The December issue of Harvard Business Review features an article by our old friend Daniel Goleman.  You’ll remember his work on emotional intelligence in his seminal article What Makes a Leader, in which he describes the components of emotional intelligence: self-awareness, self-regulation, motivation, empathy and social skill.  That article was followed by Leadership that Gets Results, which introduced us to Goleman’s six styles of leadership: coercive, authoritative, affiliative, democratic, pacesetting, and coaching.  What was important was Goleman’s observation that leaders that master four of these leadership styles – authoritative, democratic, affiliative, and coaching – are the ones most likely to achieve the best results.

Now, Goleman is back with another important message: the primary task for leaders is to focus on what matters.  Here’s what he’s saying:

Attention is the basis of the most essential of leadership skills—emotional, organizational, and strategic intelligence. And never has it been under greater assault. If leaders are to direct the attention of their employees toward strategy and innovation, they must first learn to focus their own attention, in three broad ways: on themselves, on others, and on the wider world.

Goleman has a special warning for physician leaders, relating to how physicians control their emotions: Getting a grip on our impulse to empathize with other people’s feelings can help us make better decisions when someone’s emotional flood threatens to overwhelm us.

Physicians learn to block distressful emotions while they perform their work, gaining a psychical distance that allows them to act effectively and rationally in the overheated environment o fthe operating room, for example.

These same physicians may have difficulty switching back their humane side when speaking to the patient.  Empathy can be taught, says Goleman. Mindfulness of the patient in front of you, by acting in a caring way – looking folks in the eye and paying attention to their expressions – can help physicians come back to earth, engaging with the human being in front of them.

Goleman’s message is spelled in more detail in his book Focus: The Hidden Driver of Excellence. In an age where we find “organizational attention deficit disorder” running rampant across institutions of all sizes, it is the focused leader who leads by capturing and directing the collective attention of stakeholders. In the book, Goleman points to Steve Jobs’ ability to focus on what was important and filter out the irrelevant. A telling example was the “three clicks or less” dictum that Jobs brought to interface design – a directive which helped the customer do what they wanted within three clicks – transforming the user experience at Apple and changing the lives of consumers across the planet.  Imagine using this sort of focus in your design of the patient experience in your healthcare institution.  Focus leads to radical innovation.

Where do you and and your organization stand?  Are you focused on what’s important?

Model for Healthcare Performance: GAP #5 – The Satisfaction Gap

Gap #5 is the gap between expected service and perceived service. It is a summation of all the other gaps taken together:

In essence, the test for Gap #5 and the total patient experience is one simple question asked of the patient: “Would you recommend us to your friends, family, colleagues?”

This is healthcare’s Net Promoter Score (NPS).  The Net Promoter Score measures the loyalty that exists between a provider and a consumer. NPS is based on a direct question: How likely are you to recommend our company/product/service to your friends and colleagues?  Here’s a useful visualization of how all the gaps work together:

Improving performance of a healthcare institution requires using a model similar to this with specific metrics to track each gap:

At the Physician Leadership Institute, we understand that the key to transformation is physician leadership. Our programs are customized so that organizations realize increased patients satisfaction, better quality outcomes, and improved financial performance. We impact results.  Contact us if you are interested in learning more.

Model for Healthcare Performance: GAP #4 – The Outcomes Gap

Gap #4 is the gap between service delivery and external communications.

This gap arises when the expectations of customers/patients are not fulfilled at the time of delivery of the service. For example – The hospital website may depict clean and stylish rooms, but in reality they may less well maintained – in which case the patient’s expectations are not met.

The discrepancy between actual service and the promised one may occur due to the following reasons:

1. Inadequate horizontal communications
- inadequate collaboration between marketing and operations
- inadequate communications between sales and operations
- inadequate communications between HR and operations
- differences in policies and procedures across teams, departments, etc.

2. Propensity to overpromise

In research done across multiple service industries, customers expect reliability to the most important of all factors affecting perception. In healthcare, this translates into being very careful about what and how the patient is told by the healthcare professionals themselves. Differences in what was said and what actually occurs make outcomes difficult to manage. Of course, the cure of a particular patient’s condition is the most important outcome they hope for, but managing customer expectations is a key skill for all healthcare providers – from  physician to the front-line.

Another point of note: the outcome gap is often perceived differently by administrators vis-a-vis healthcare practitioners.  What this means is that the quality of patient experience must be measured using a common set of metrics that everyone understands and is part of the day-to-day operations of the institution. Superior performance depends on how clearly terms like value and outcomes are defined by specific area of treatment.

Uniform standards for patient experience can be developed in a collaborative way to include not just staff and physicians, but patients themselves.  More on this aspect in a future blog.

Next, Gap #5 – the Satisfaction Gap, and one question that gives us a clear indication about patient satisfaction, or the lack of it.

Model for Healthcare Performance: GAP #3 – The Execution Gap

Gap #3 is defined as the gap between Service Quality Specifications and Service Delivery (a.k.a. the gap between talk/policy and action).

This gap may arise owing to the service personnel. The reasons being poor training, incapability or unwillingness to meet the set service standard. The possible major reasons for this gap are:

1. Role ambiguity

2. Role conflict

3. Poor employee-job fit

4. Poor technology-job fit

5. Inappropriate supervisory control and compensation system

6. Lack of teamwork

7. Ineffective internal marketing

8. Lack of proper customer education and training

Ask the following questions:

- Do we provide accurate information to employees concerning job instruction, policy, procedures/processes, and performance assessment?

- Does the number of demands in employees’ jobs make it difficult to serve customers?

- Are we spending enough resources to making sure we hire and train the right people?

- Is there understanding and collaboration between the various hospital staff and physician teams to build a team-based culture?

- Is there a process in place to allow employees the freedom to improve the work processes and policies they must work under?

Execution is where healthcare wins or fails.  Without superior performance, no institution can expect to survive, let alone thrive.

Next we look at Gap #4: Outcomes

Model for Healthcare Performance: GAP #2 – The Standards Gap

Gap #2 in our Model for Healthcare Performance is defined as the gap between management perception and service quality specifications. It’s the gap between what administrators believe is important and the methods used by the organization to translate those beliefs into operational standards.

For example, performance objectives like cost or quarterly profits are easy to measure and track, but measuring service quality is a different story.  Does your organization have standards for the quality of patient experience?

The traditional reasons for Gap #2 are as follows:

1. Inadequate management commitment to service quality

2. Perception of infeasibility

3. Inadequate standardization of service tasks or ambiguous service design

4. Absence of goal setting

5. Inadequate new service development process

At the Physician Leadership Institute, we’ve designated this gap as the Standards Gap.  This gap may well be a symptom of misalignment between the administration and front-line healthcare providers. Or it may simply be a matter of poor definition of service dimensions or lack of adequate training.

To fix this gap, consider the following question: Have we dedicated enough resources to improve service quality? By department? By patient need?

A second, more important consideration is whether the organization can meet patient expectations without hurting financial performance.  This is a tricky question unless we go back to the goals defined in our strategy, which in turn, must be defined in terms of value and outcomes – defined by specific area of treatment.

Finally, and this is also critical: the original developers of the SERVQUAL instrument found that “the perception of infeasibility is often the result of short-term, narrow thinking on the part of managers – an unwillingness to think creatively and optimistically about customer needs, and an excuse for maintaining the status quo.”

Sound familiar?

The proper design of service quality standards will always improve performance over the long term. Service quality standards promote appropriate task-shifting, which allows experts to focus on the more technical aspects of their job.  This does not mean that the non-technical aspects are less important. In fact, the quality of patient experience is most often determined by the non-technical interactions with staff, and front-line healthcare providers.

Next up, Gap #3: the Execution Gap.

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