How does one transform a 0.2 business model to function in today’s let alone tomorrow’s changing healthcare model? The clinical side of healthcare, the healthcare business, in juxtaposition to the business of healthcare, would never quarter to the idea of buying millions of dollars of technology without first knowing the benefits. When a hospital builds a new wing, they forecast its costs and revenues in great detail, and they know by when and how the will pay for it. Often, this same principle does not apply to healthcare IT.
The hospital's infrastructure inherently has duplicate structure, cost duplication, and rigid departmental silos. Its various functions often operate in isolation, perform much of the same work, and do not share information readily.
Plenty can be learned from what other industries have done to become more effective. Other industries operate with a much less tribal model than healthcare. Over time, hospitals have evolved into a business model resembling tribes and tribal chiefs. In some hospitals the tribes have names like radiology, general surgery, psychiatry, and OBG/YN. Other hospitals have redundant tribes, tribes like--admissions, human resources, IT, and payroll. Each tribe is run by the tribe’s chief. The chief’s dominant weapon is its budget.
The tribal organization is more a reflection of how the running of a hospital has evolved over the years. For many, the business model is ineffective and internally competitive, and it supports duplicated business functions. Acquisitions have reinforced and exacerbated the problem, duplicating and increasing costs without yielding a resultant increase in value.
Before the business of healthcare is prepared to cope with the unknowns of the myriad of external influences it will face in the next few years, it must first change how it functions within its current structure. One way to do that is to challenge the current structure, and the way to do that is to do away with the roadblock of being guided by "That is the way we always do things."
Too many leaders look to become more efficient. Efficiency implies speed, and doing bad things faster is no solution. Work at improving effectiveness and good things will happen. A quick win when trying to be more effective is to look for opportunities to remove duplicated functions. If through acquisition or evolution you now have more than one IT function, payroll, admissions, or human resources group, you have one more then you need. Some people call that type of organization a decentralized business model.
The CFO undoubtedly has another name for it--a waste of money. If your hospital has multiple groups performing the same function, it is worth evaluating a shared services approach to save money without adversely affecting the quality of delivering those functions.