In Good Times and Bad

In Good Times and Bad – Recently, my friend Tony over at Hospital Impact wrote a post on hospitals that have gone through hard financial times and the strategies they used to make the turnaround. In a time when my own organization is going through its own financial difficulties, I found his post both timely and encouraging. Among its stressors, financial turnarounds involve difficult decisions about people and services where the impact on the organization and the community is uncertain. With many hospitals (I believe the figure is near 50%) running in the red, due to low reimbursement, uncompensated care, or costly government mandates, I am sure that many hospital administrators can sympathize.

I spoke with a mentor about the changes we are making at our hospital and he told me about a CEO he had worked with in the past. Every few years, regardless of financial performance, this CEO would ask every department director to redesign their department. He would ask them to clean the slate and design a department from scratch that would offer the same level of service with fewer people. This process was difficult for the organization, but the CEO was convinced that it was necessary for the organization’s long-term health.

I think my greatest lesson during this time is that an organization must always stay fit. Even in the good times, an organization needs to stretch itself and create a resilience that avoids dips in performance all together or else makes them much smaller. There are lots of reasons for a hospital to stay fit – improved quality, expanded services, etc. – unfortunately I am discovering yet another.