Throwback Thursday: Creating the New American Hospital [Book]

throwback thursday lean blog

Today's Throwback Thursday is a look back at a 1993 book that I purchased in 2011 on somebody's recommendation. It was probably one of those used books you can buy for a penny on Amazon… Creating the New American Hospital: A Time for Greatness. It's indeed available for a penny today.

I had flipped through the book at the time as it was interesting to me to get more context on how hospitals are not just suddenly in crisis (financial or otherwise) in recent years.


Chapter 1 of the book is titled “Why Hospitals Fail.” The author says, “Clearly, something isn't working.”

Problems that he lists includes hospitals that are closing or cutting services, malpractice suits and poor quality, lack of key healthcare professionals and high turnover, business cutting health benefits to workers, canceled coverages and personal bankruptcies… and “Even at a premium price, the quality of patient care can be well below acceptable levels. Sometimes care is world-class, sometimes far less.”

The author's assessment, then, under the header of Why Hospitals Fail is blunt:

“Organizations fail because of poor management. Studies show… executives often blame all sorts of external factors — labor attitudes, costs, or government regulations — for their inability to complete, in much the same way that too many hospital executives believe that the magic answer will be found from some outside source such as national health insurance.”

I've been saying similar things for a while in my posts about hospital executives who claim they are “forced” to lay off employees due to external factors instead of taking responsibility for the situation.

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Bad Management = Bad Hospital Performance

The author of this book, V. Clayton Sherman cites Robert Hayes (who my MIT professors cited often during my time there from 1997-1999) and his 1980 HBR article “Managing Our Way to Economic Decline.”

From that:

“Responsibility for this [manufacturing] competitive listlessness belongs not just to a set of external conditions but also to the attitudes, preoccupations, and practices of American managers.  By their… devotion to short-term returns and ‘management by the numbers,' many of them have effectively forsworn long-term technological superiority as a competitive weapon.”

Sherman also cites W. Edwards Deming (who passed away in 1993) who said:

“The kind of management being practiced in American corporations now and being taught at American business schools is the biggest producer of waste… these management practices are the cause of American corporate decline.”

Sherman also cites Regina Herzlinger who said, in her 1989 HBR article “The Failed Revolution in Health Care–The Role of Management“:

“Americans find services to be fragmented, impersonal, inconveniently located, and offered at unsuitable times. Then there is the quality of the care itself, which is notoriously erratic. Although our health care system excels in heroic procedures that save lives, more common procedures are less expertly provided. For example, most experts concede that only a fraction of the 700,000 hysterectomies performed every year can be medically justified… a revolution that in the 1980s was supposed to transform the health care picture.

But the revolution failed… What went wrong? I claim that the failure was almost entirely that of management, not of strategy, that the creators of these new organizations were so blinded by the vision of the dazzling new world they hoped to forge that they neglected the details of management that would breathe life into their vision. My purpose in this article is to reorient the revolution to a second stage that will be guided by those who believe that in management, as in architecture, God is in the details.”

It begs the question if our current healthcare revolution is also failing?

Sherman said that more money from Washington DC would not be the answer. He says bluntly “JCAHO Is Not the Answer” and says “the accountability lies with management, not some external group.”

Stopping the Creation of Fear

So what can hospitals do? Sherman sounds a lot like Deming when he says we need to stop the creation of fear.

“People are intimidated, sometimes by autocratic and demeaning supervision, but more often by a system that seems out of control. Whatever the cause, it's certain that people will not embrace change, which is always fearful, unless the atmosphere in the organization is supportive and encouraging.”

This is still an important challenge in 2015. It's easy for management to blame employees for being “resistant to change,” but what we really need is not better, less fearful employees, but, instead, better management practices and methods… such as what we wrote about in Healthcare Kaizen.

The Need for Kaizen in 1993

Joe Swartz and I were hardly the first ones to advocate for Kaizen and a culture of continuous improvement in healthcare. Dr. Don Berwick was calling for Kaizen in the New England Journal of Medicine in 1989.

On page 101, Sherman writes about “Do It Groups” — and it sounds a bit like Kaizen.

A Do It Group (DIG) is focused on “solving a single, specific problem within 30 days. The goal is improvement, not perfection… quick implementation of these results can be followed up with successive improvements.”

DIGs are focused on associates identifying problems and solutions, although management “is allowed to suggest problem areas where they'd like to help, but they do not control the topics.” Associates will take guidance with “wise management getting out of the way.”

Sherman says that “just do it” assignments should be made to associates if it's not a big enough change to require a group. He also emphasizes (and this is VERY Kaizen-y) that “managers are expected to find a way to make a minimum of 90 percent of ideas work.”

He adds (and this is a great idea) that, “In a number of hospitals, any DIG recommendations that are turned down are reviewed by the CEO. This really keeps the heat on to change the system.”

In Summary

I'm hoping to read more of the book. In chapter 2, Sherman has a great comparison of the “Old Hospital” and the “New Hospital,” which includes:

Human beings being viewed as “subordinates… disposable units of cost who can be laid off”…”Partners, teammates, prime competitive advantage… human resources whose jobs are inviolate”
Paid to perform tasksPaid to improve system
Managers decide, workers implementSemiautonomous work teams
Information only on need-to-know basisInformation widely shared and available
Customer viewed as patients or doctorsCustomer viewed as all who benefit from what is done
Quality defined by providerDefined by customer
Piecemeal quality and service programsComprehensive, from soup to nuts
Turfs and departmental handoffsTeam, seamless performance
Conflict, find reasons to say noConsultative, find solutions
Hierarchical, bureaucratic, top-downFlat structure, teams, mutual influencing
Emphasis on authority, title, degreeEmphasis on results, promotions from within, minimal status, first-name basis
Remote managementManagement by wandering about

It's a book that was ahead of its time, in many ways. I am curious if anybody who has been in healthcare for 25 years who remembers this book and if it had any influence. I've tried connecting with the author on LinkedIn and maybe we'll be able to do a podcast together.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.



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