Curbside Consult with Dr. Jayne 6/10/24

I have a lot of friends who work in the healthcare technology vendor space, and they are always curious to know my thoughts about health system priorities. A lot of them are on the sales side of their respective organizations and are trying to meet quotas, figuring out how they can get a hook with the health system executives that make purchasing decisions.

Of course, when they ask my opinion, they get just that. I can only comment based on the health systems that I know and the conversations that I’ve had. Priorities can vary based on community and regional factors, as well as based on specific challenges that a given organization has faced in recent months, such as cybersecurity incidents, labor challenges, and natural disasters.

McKinsey & Company recently released a report that looked at the investment priorities of health systems. AI always makes the list as something that organizations think will help in their transformation efforts, but it is unclear how much individual systems are investing in those technologies. McKinsey cites a 2023 working paper from the National Bureau of Economic Research as stating that machine learning could result in reductions of healthcare spending of up to $360 billion. However, McKinsey notes that while the majority of respondents to its survey say they are making digital transformation a priority, they also report challenges in resource allocation and planning.

In looking at data on already implemented capabilities, top priority areas include virtual health, revenue cycle management, digital front door, acute care throughput, and ambulatory care efforts. Leaders who were surveyed reported that those areas that might have the biggest impact include AI at the top, followed by virtual health and digital front door.

It’s interesting to see that the most impactful area fell lower on the spectrum of implemented technologies and roughly middle-of-the-road in being ranked as “unplanned” by leaders. From my discussions with leaders, it sometimes feels like AI isn’t being planned for in the same way as other technologies because of overall uncertainty in how to approach it.

The McKinsey survey gathered data on barriers to executing digital and AI transformation in the next two years. The item most commonly earning a number one ranking was “budget or capital limitations,” followed by “legacy systems are difficult to upgrade.” I was surprised that “unaware of the right digital solutions available” scored so low, with only six of 200 respondents ranking it as number one. That makes me wonder if those surveyed really believe that or if they’re just not admitting how challenging it is to find the right answers to some of the sticky situations that they are facing.

The report goes on to recommend five ways that health systems can evolve, including embracing the cloud, building partnerships, cautiously moving to AI, looking beyond off-the-shelf solutions, and changing up how they operate. For the latter two, they offer advice that I’ve been giving healthcare organizations for two decades now. Their example for looking beyond available solutions involves optimizing workflows “to enable more appropriate delegation” in order to save on nursing costs.

Process improvement advocates have been pushing the idea of delegation for years, yet I still regularly encounter physician offices that don’t have delegation policies for medication refills or scheduling overrides. I continue to see organizations that refuse to use proven strategies, such as data-driven float pools for staffing. Maybe now with the idea of technical enablement for delegation, as mentioned in the piece, people will get on board since adding technology often makes things appear more exciting.

As far as the recommendation to operate differently, the article calls for structures with “flatter, empowered, cross-functional teams,” which management consultants have been pushing for as long as I’ve been in the industry. In thinking across my career, I’ve probably only worked on three truly empowered teams the entire time. Too often, I see teams that are withering due to micromanagement and barriers they can’t seem to remove, such as absent organizational support, questionable corporate values, and lack of funding for key resources.

I asked a friend who is a health system administrator to weigh in on the recommendations. She agreed that many organizations need to get back to basics and to focusing their efforts on initiatives that might not seem sexy but that are needed to help build a strong base after the challenges of COVID. These include things like making employees feel valued, providing adequate resources for training and onboarding, and having a dedicated focus on removing the barriers that keep teams from meeting their objectives.

She told me a story about an operating room utilization project that another part of her organization worked on for months, crunching data about supplies, staffing, and room turnover rates. Despite recommendations from their on-the-ground process improvement staff, leaders wouldn’t negotiate with other departments to make frontline operating room staff available for interviews or workflow mapping activities.

It’s hard to fully understand a problem when you’re just looking at data and not talking to the people who do the job day in and day out. And if you’re not talking to the stakeholders, you definitely can’t get their buy-in or their support for your proposed changes.

The process improvement team was frustrated by the leadership barriers and their inability to make progress. They ultimately spent six months and who knows how much money designing a solution that made people feel disenfranchised, which automatically reduced its chances of success from the moment it was announced. After a failed pilot, the organization reopened the project and figured out a way to remove the barriers, with the team performing a significant amount of rework as they were able to get the input of those with the greatest knowledge of the process.

What would the outcome have been if the team had been empowered to do the job they were trained to do in the first place? In addition to providing process improvements six months sooner, they would have had the satisfaction of knowing that their expertise was respected and that they were treated as valuable members of the organization. I wouldn’t be surprised if the members of that team are a retention risk over the coming months, and anyone who has had to crunch staffing numbers knows that it’s always more expensive to replace someone then to use resources that you already have in place.

What do you think about the McKinsey survey and report on organizational investment priorities? Do their findings match what is happening where you are? Leave a comment or email me.

Email Dr. Jayne.