If you had asked me a year ago whether large U.S. health systems were delivering better results as a direct result of their scale, I’d have told you “no.” That does not mean health systems are generally underperforming or poorly managed. But, the data my Advisory Board colleagues and I study suggest more size and more complexity generally do not translate to improved performance relative to smaller organizations. That’s true for clinical outcomes, cost of care, and the financial bottom line.
Why not? For many leaders, the necessary investments in technology and organizational redesign have made the payoff too remote and elusive relative to the cost. But the unprecedented circumstances of this past year’s pandemic have introduced strong incentives to change. And as a result, I see compelling new evidence that scale might actually create tangible advantages when yielded strategically. But to more fully prove that their scale is in fact a net positive to their communities and to themselves, health systems need to show that they can build on recent accomplishments once the urgency of Covid-19 recedes into the rearview mirror.
Health systems have demonstrated incredible resiliency, capability, and agility during the current public health crisis. Across the past 12 months many have started to see themselves for what they could be: organized, interconnected parts of a whole. Under emergency conditions, leaders restructured decision-making protocols to respond quickly to events on the ground – sometimes through centralization, and sometimes through decentralization. They designated specific sites of care for Covid-19 patients, diverting others to alternative locations. They moved clinical staff across markets to mirror shifts in demand, ensuring adequate coverage during surges. They created new dashboards with comprehensive views of system-wide supply inventory, allowing them to identify and resolve shortages more quickly. In short, they’ve demonstrated “systemness,” an approach to decision-making that centers value to the whole organization over its individual entities and stakeholders. This is to their credit; lives have been saved.
Where these organizations go from here will say a lot about the outlook for health systems in a post-Covid world. Leaders have made the types of bold changes to organizational behavior that have long been theoretically possible but rarely demonstrated. If they fail to hold their newly staked strategic positions to see what long returns might await them, then the answer to the question of scale’s value will continue to elude us. And if their achievements in the face of this crisis fail to convince other leaders that systemness is worth pursuing more aggressively in service to endemic challenges, then nothing will. Put simply, I believe the next 12-18 months represent a litmus test for the validation of systemness as the conceptual heart of the modern health system’s value proposition.
In my role at Advisory Board, I spend an extensive amount of time coaching health system executives on how to apply new insights to their organizational leadership. Here’s what I’m telling them about their pursuit of systemness post-Covid:
Identify the root causes that enabled you to act more like a system this past year
Was it a change in incentives? A different organizational design? Clearer lines of accountability? Streamlined decision making? Those underlying drivers are telling you a lot about how to achieve systemness when you tackle other initiatives in the future.
Ask yourself how your innovations from the past year can be repurposed to serve another objective
When we don’t exercise muscles, they atrophy. Don’t let that happen here. What else could the command center model for decision-making do for your institution? How can you adapt your Covid-19 data flows and dashboards to provide you with better information about how the parts of your organization are performing relative to the whole? Is it inevitable that your staffing model and use of physical space will revert to pre-pandemic norms, or can you maintain a higher floor for flexibility and agility moving forward? Can you use your newfound capacity and capability in telemedicine as part of a broader strategy in access or value-based care?
Embrace the power of storytelling as a mechanism for changing institutional culture
In too many organizations, the systemness successes of 2020 are a well-kept secret. Health systems and their employees ought to feel a tremendous sense of pride for their accomplishments this past year. And those accomplishments need to become embedded in the language of the organization as well-told and oft-repeated stories, not lost in a slide deck somewhere. When re-told and celebrated, these examples of impact, rooted in change, can re-train institutional muscle memory and help defy the gravitational pull back to the old way of doing things.
I don’t know for certain if the specific tactics developed in response to Covid-19 are going to help health systems address their longer-term challenges around quality, cost, and access. But leaders in this industry have talked for years about the promise of systemness to dramatically improve those things, often without the accompanying evidence to support that claim. This past year has given us that evidence. We should all aspire to act on it.