Leading Change
HFMA Metropolitan New York Chapter
Joseph A. Levi 52nd Annual Institute
Debora Kuchka-Craig, FHFMA
HFMA National Chair and
Corporate Vice President, Managed Care
MedStar Health, Columbia, MD
March 10, 2011
The Crisis May Seem to Be Over . . .
The recession─at least
technically ─ has ended...
…this month marks
the one-year
anniversary of the
Affordable Care Act
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. . .But the Long-Term Issues Remain
Exponential
Growth in
Healthcare
Expenditures
Need for Better
Access to
Insurance
Coverage
REFORM
DRIVERS
Substantial
Opportunities to
Improve Quality of
Care and Patient
Outcomes
No Correlation
Between
Expenditures
and Quality
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Kotter’s Eight-Step Model for
Leading Change
Create
Urgency
Create Short
Term Wins
Build on
Change
Form a
Powerful
Coalition
Remove
Obstacles
Anchor
Change in
Corporate
Culture
Create a
Vision for
Change
Communicate
the Vision
Source: John Kotter, “Leading Change,” 1996
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Step 1
Create a Sense of Urgency
As We Navigate a New Phase of the Crisis
Emergency Phase
Leaders sought to stabilize the
situation and buy time
Adaptive Phase
Leaders must tackle the underlying
causes of the crisis and build the
capacity to thrive in a new reality
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Step Up:
Healthcare Finance Must Take the Lead
“Somebody has to do
something, and it’s
going to be— and it has
to be—you.”
Former Senator and Senate
Majority Leader
Bill Frist, MD
Speaking at
HFMA’s ANI: The Healthcare
Finance Conference, June 2010
Source: hfm magazine. August 2010.
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Step 2
Form a Powerful Coalition
Other
Administrative
Departments
Finance
Patients &
Community
Members
Physicians
“Leadership has
nothing to do with titles;
it has everything to do with,
“Do you inspire other people?
Nurses
Do they want to follow you?
Do they want to be with you?”
& Other
-Tom Atchison, author of
Followership: A Practical Guide to
Aligning Leaders and Followers
Payers
Clinicians
Other Entities
Within Your
Health System
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Community banks
and residents bought
38% of the $45M in
bonds that a rural
Nebraska critical
access hospital
used to fund
construction of a
replacement facility.
REDESIGNING PRIMARY CARE
A California
healthcare system
created core revenue
cycle teams with
representatives from
10 departments
across all system
hospitals.
Improvement:
$9.4 M
FUNDING A CAPITAL PROJECT
TRANSFORMING REVENUE CYCLE
Healthcare Coalition
Success Stories
A payer funded an
initiative to make a
Minnesota healthcare
system’s primary
care clinics more
efficient and
patient-centered.
Physicians, nurses
and other clinicians
provided the ideas.
For more information, read HFMA’s Leadership e-Bulletin, available at www.hfma.org/leadership.
“Transforming Revenue Cycle” (Providence Health & Services CA region): Oct. 2010 issue.
“Funding a Capital Project” (Beatrice Community Hospital/NE) : Dec. 2010 issue.
“Redesigning Primary Care” (Fairview Health Services.MN): Nov. 2010 issue.
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Step 3
Create a
Vision for
Change
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“The people who really succeed in this field
have a vision. They have a high degree of
motivation, and they are out to make things
better—to do good and to change the world
on whatever scale they can. They work hard,
they have an end in mind, and they will
acquire whatever skills and training and
knowledge they need to get there. ”
Mary Stefl, professor and chair of the department of
healthcare administration, Trinity University,
San Antonio, Texas, and a consultant for the
Healthcare Leadership Alliance Competency Model
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Step 4
Communicate the Vision
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Virtua focuses
around the united
goal of providing an
outstanding patient
experience.
All improvement
projects relate to
one of the five
points of the star.
IDENTIFYING WHAT TO CHANGE
Virginia Mason
leaders use this
pyramid graphic
to continually
communicate and
sum up the health
system’s vision
and strategic plan.
UNIFYING GOALS
REINFORCING STRATEGIC PLAN
Communicating the Vision
Success Stories
At Kettering, team
members can easily
see how close they
are to achieving
annual goals based
on where the darts
fall on the bulls-eye
graphic.
For more information, read HFMA’s Leadership, available at www.hfma.org/leadership.
Virtua case study : Spring/Summer 2010 issue.
Virginia Mason and Kettering case studies : Fall/Winter 2009 issue.
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Step 5
Remove Obstacles
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LEVEL 3
LEVEL 2
LEVEL 1
Leaders Will Confront Obstacles
on Three Levels
INDIVIDUAL & INTERPERSONAL




Resistance to change
Risk aversion
Need to develop new skills
Need to relate differently to team members
ORGANIZATIONAL
 Incentive structure that does not reward risk-taking & change
 Lack of organizational nimbleness
 Limited resources for supporting change
HEALTHCARE DELIVERY SYSTEM
 Divisive political differences
 Complex web of regulations
 Misaligned provider incentives
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“. . . a leader needs to know and
understand his or her people. You cannot
lead without knowing the needs of your
people—what drives them, what makes them
do what they do. Once you understand some
of the psychology of that, then you can give
them opportunities to succeed based on their
own psychology of success.”
Kerry Gillespie, FHFMA, vice president, operations,
Community Health System, Inc., Brentwood, TN,
and a member of HFMA’s Tennessee Chapter
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Step 6
Create Short-Term Wins
“A journey of a
thousand miles
begins with a
single step.”
- Lao-tzu,
Ancient Chinese
philosopher
“Don’t be afraid
to start small.”
- Marty Manning,
Advocate Physician
Partners
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Short-Term Wins Help Bridge the Gap to
Long-Term Solutions
Healthcare
Delivery
System Issue
 In 2008, the U.S. spent $14 billion treating
115 million people who visit the ED for a
non-urgent condition
How it
 Payers no longer want to pay ED prices for
Manifests at the
non-emergency care
Hospital Level
Short-Term
Win
 New Mexico’s Presbyterian Hospital launched
a patient navigator program that deferred
60 unnecessary ED visits within a month after
its launch. The program is expected to save
$10M - $15M over five years
For more about Presbyterian Hospital’s navigator program, see the Oct. 2010
Leadership e-bulletin, available at www.hfma.org/leadership
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Step 7
Build on Short-Term Wins
“Leadership is invaluable to
surviving Step 7.
Instead of declaring victory
and moving on, transformational
leaders will launch more and
more projects to drive change
deeper into the organization.”
-John Kotter
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Building on Short-Term Wins
Success Stories
Floyd Memorial Hospital
One-year initiative
to reduce supply chain
costs by $1.1M
Catholic Health East
Small pilot program
to prevent
readmissions
Two-year savings of more
than $4M
Number of participating
physicians nearly tripled
in two years
 Increased collaboration
 Enhanced quality of care
 Reduced waste
hospitalwide
 Avoided payment denials
from direct readmissions
 Increased physician
satisfaction
For more information, see “The Value Equation” in the Nov. 2010 hfm, available at www.hfma.org/hfm..
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Step 8
Anchor the Changes in
Corporate Culture
“Company cultures are
like country cultures.
Never try to change one.
Try, instead, to work with
what you’ve got.”
-Peter Drucker
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SHARP HEALTHCARE
 Sharp aligns all strategic
initiatives under six pillars
of excellence
 Leaders and staff come
together at an annual All-Staff
Assembly to recommit
themselves to their mission
 Sharp produces an annual
TV documentary that shares
real-life experiences with
the community
ADVOCATE HEALTH CARE
Corporate Culture
Success Stories
 Advocate’s balanced
scorecard centers around
health outcomes
 40 percent of managers’ merit
compensation increases are
based on health outcomes
 Their publicly available
Value Report documents
quality and cost achievements
Read an interview with Advocate’s Lee Sacks, MD, in the Dec. 2010 hfm, available at www.hfma.org/hfm.
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Build on Finance Professionals’
Change Leadership Strengths
“CFOs are often better
leaders than they think
they are. They are good
at setting goals,
measuring results, and
looking at variances.”
-Quint Studer, CEO &
Founder, Studer Group
“The CFO is really in a role to
help the various stakeholders
understand how the pieces fit
together.”
-Noblis Health Innovation
Senior Principal, Paul Breslin
“When asked what role finance
officers can play in transforming our
healthcare system, David Walker said
to remember what the ‘P’ in CPA
stands for.”
-HFMA Board member Edward Giniat,
quoting the former U.S. Controller General
& CEO of the Peter G. Peterson Foundation
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