The Management Challenge of Delivering Value in Health Care

The Management Challenge of Delivering Value in Health Care

The Management Challenge of Delivering Value in Health Care

Chapter 1 The Management Challenge of Delivering Value in Health Care: Global and U.S. Perspectives © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives (1 of 2) • After completing this chapter, you will be able to: – Understand the challenge of delivering value in health care – Identify the major forces affecting the delivery of health services – Distinguish the similarities and differences in the forces shaping health services globally – Understand why it is difficult to change the health care industry © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives (2 of 2) – Develop a system view of health care delivery – Understand the different types of firms operating in a health care system – Identify, understand, and apply the major perspectives and theories on organizations to real problems facing health care organizations – Develop mental agility in analyzing problems from multiple theoretical lenses © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Purpose • • Value: quality provided at same or lower cost relative to other producers Increasing value in health care requires: – – – – Assembling and clarifying alliances Developing local health care infrastructure Balancing global and local commitments Managerial skills © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Challenge: Deliver Value • • Challenge of value proposed to providers, suppliers and insurers Deliver health care value via: – Improving quality – Improving access – Reducing costs of care • “Iron triangle” of health care © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Challenge of Rising Health Costs: Supply and Demand Side Drivers • • • • Health costs: rising steadily over time without restraint Rising costs: consequence of technology and insurance Supply side: costs driven by imperfect information markets Providers’ side: costs due to defensive and acute care and poor coordination © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Other Challenges Exacerbating the Value Challenge • Health care firms must deal with: – – – – – Meeting demands with finite resources Addressing chronic care with acute resources Fostering population-based models Sharing information while respecting privacy Incorporating technological advances while restraining rate of growth in cost – Promoting wellness behaviors © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Challenges are Global (1 of 2) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Challenges are Global (2 of 2) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Complexity of the U.S. Health Care System • • • At present, U.S. lacks single national health insurance program U.S. system has fully-developed “value chain” Health care industry contains: – Many stakeholders – Divergent interests and perspectives – Entrenched position © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. System View of the U.S. Health Care Industry © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Why Changing the Health Care System is So Difficult • Health care system slow to change due to: – – – – – – – – Heavy regulation Consumerism is newcomer to health care Influence by medical profession Reduced competition Hospital care via nonprofit institutions Health care delivery largely local Lack of valid data about quality and cost Outside business practices have failed © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Systemic Views of U.S. Health Care • System’s view important because: – – – – – Health outcomes determined by factors outside national infrastructure Many interdependent players require organization Value requires effective partnerships Innovation requires concomitant changes Organizations consolidate into systems with objective of efficiency © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization and Management Theory (1 of 3) • Schools of management thought – Provide conceptual maps of how to deal with internal and external challenges • Early writings on bureaucracy and organization – Form of administrative organization operated under legal authority – Weber: capable of highest level of efficiency © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization and Management Theory (2 of 3) • Frederick Taylor and scientific management – Emphasized “control” element of bureaucracy • Classical school of administration – – – – Unity of command and direction Subordination of individual to general interest Centralization and authority Span of control and departmentalization © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization and Management Theory (3 of 3) • Human relations school – Primacy of group structures individual behavior • Contingency theory of leadership – Effectiveness of specific management approaches depends on key situational factors • Decision-making school – Focus on large cadre of middle managers © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Institutional Theory • • Organizations are organisms that adapt to pressures from without and within Firms: – Are limited in degree of rationality by both environment and internal members – Develop distinctive character through a process of institutionalization © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Open Systems and Resource Dependence Theories • Effectiveness of specific management and structural approaches – Depended on firm’s environment, technology, and critical tasks • Emphasis on importance of ambidexterity in organizational performance © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Management Perspective • Three main schools of thought – Industry structure and competitive forces – Emphasis on firm’s distinctive capabilities and resources – Emphasis on firm’s relational capabilities and collaboration with upstream suppliers and downstream distributors and customers © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organizational Ecology • • Environment selects out and retains most appropriate organizational form from existing population of various forms Emphasis on: – Population of firms – Changes in organizational populations due to variation, selection, retention, and competitive forces © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Social Network Perspective • • • Social networks: formal and informal work groups shape and constrain individual behavior Interaction approach: consequences of interaction and ability to control interactions Structural approach: groups actors by similarities in relations with others © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. System Perspectives • Conceptual model of system integration – Based on functional, physician-system, and clinical integration • Embeddedness of patients and clinical micro-systems – Within a larger network of mesosystems and larger macrosystem © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Summative Views of Organizational Theory • Complementary rather than competing approaches – Distinct levels of analysis – Different strategies for changing organizations – Various suggestions for competencies that managers need to develop • Can apply to hospital-physician relationships © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Organization Theory and Behavior: A Guide to this Text © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Leadership and Management: A Framework for Action © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives (1 of 2) • After completing this chapter, you will be able to: – Differentiate between leadership and management – Define leadership as a relational concept – Describe the evolution of leadership theory from trait theory to contingency theory – Describe contemporary conceptions in leadership theory © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives (2 of 2) – Solve problems according to the 8-Step Strategic Problem Solving Method – Appreciate current research findings in leadership literature – Understand how to sustain successful leadership © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Purpose • • • • • Define and distinguish concepts of leadership and management Identify theoretical traditions Consider role of organizational culture Explain larger set of roles leaders play in health care organizations Summarize recent research on healthcare and leadership © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Introduction • • Managers often expected to exhibit leadership via directing others Understanding leadership extends beyond understanding of traditional managers – Leadership includes additional skills and responsibilities than management alone – Leadership can be demonstrated by individuals in non-management positions © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership versus Management • Leadership – Process in which one engages others to set and achieve a common goal • Management – Process of accomplishing predetermined objectives through the effective use of human, financial, and technical resources • Leadership and management functions may overlap © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership in Organizations • Front-line managers directly supervise care providers • Middle managers responsible for entire units within healthcare organization – Make up majority of managers • Top managers responsible for managing entire organization – Often referred to as C-suite © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Theories of Leadership • • • Those in leadership roles evoke images of larger than life personalities Important to examine range of leaders, both successful and not successful Leadership theories: – Trait theories – Behavioral theories – Contingency theories © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Contemporary Theories of Leadership © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership Roles • Goal setting: – Goals • Larger aspirations of organization – Objectives • Subordinate goals that must be accomplished to meet larger aspirations – “Management by Objectives” • Method of using goals and objectives to align organizational action toward achieving organizational goals © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (1 of 7) • Approach to integrating strategic function of leadership – Involves goal and objective setting with subsequent organizational action required to achieve objectives • Strategic problem solving uses an 8-step approach © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (2 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (3 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (4 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (5 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (6 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Strategic Problem Solving (7 of 7) © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing External Stakeholders • • Key role of C-Suite is to interact with key external stakeholders Rules for making communication with external stakeholders smooth: – – – Performance cannot be reduced to profits External stakeholders do not have same incentives to contribute to performance External stakeholders must be viewed as champions of organization within community © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing the Internal Workforce: Leadership and Followership • • • Leadership: influence a group of people towards achievement of a goal Followership: share common purpose with leader, believe in organization, and want success for leader and organization Effectiveness of leaders – Measured by ability to leverage and manage capacities and motivation of followerships © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Influencing Organizational Culture • Leaders must understand and influence organizational culture – Organizational culture: deepest level of basic and shared assumptions and beliefs shared by members of organization – Artifacts: signs of physical, psychological, or social environment – Values: what groups and individuals think ought to be, distinct from what does exist © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership in Health Care Organizations: Evidence from Research • Overview: five research questions: – Does leadership matter in health care? – Are there individual or setting characteristics that predict leadership effectiveness? – What competencies are required for leaders? – What are the primary challenges of leaders? – What role does leadership play in successful organizational change? © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership and Performance • Performance outcomes: – Patient-related • Leadership style highly correlated with key indicators of quality of care – Staff-related • Significant link between leadership style and staff-related outcomes – Management-related • People-oriented leadership associated with management-related outcomes © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Predicting Leadership Effectiveness • Three sets of factors predict leadership effectiveness: – Leader traits and characteristics – Leader behavior and practices – Context or practice setting © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Competencies for Leadership in Health Care • • Competencies: knowledge, skills and abilities Four competency areas for effective leadership: – – – – Knowledge of health care industry Technical skills Analytic/conceptual skills Interpersonal/communication skills © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Leadership’s Role in Organizational Change • Transformational leadership is important, but insufficient • Supportive leadership is critical to success • Successful change requires administrative and clinical leadership – Administrative leadership: support provided by those in senior positions – Clinical leadership: support provided by those who hold clinical positions © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Sustaining Leadership • Succession planning: – Not limited to replacing individual – Should include review and codification of organizational cultural elements, work practices, and job design • Self-care – Leadership roles confer personal stress – Key approaches to managing oneself involve recognition, analysis, and processing © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.