People create value for patients
People create value for patients
For decades now, much of the health policy being debated across the world has focused on laudable but technocratic changes aimed at influencing the way in which healthcare is delivered. As a result, reform has tended to concentrate on payment systems, governance practice, organizational structures, regulation, better purchasing and the welcome explosion of clinical information to patients and citizens alike.
But anyone who has ever managed a healthcare provider will tell you that the most important and sustainable difference to the quality and cost of patient care actually result from the design of the clinical care process, the degree of innovation in the business model, and the motivation of staff. Indeed, all too often, pushing a single-minded focus on productivity ends up demoralizing professionals and other staff. With this in mind, we have developed this report to examine how health systems leaders can create a seemingly paradoxical synergy: enhancing productivity while simultaneously increasing work attractiveness and professional motivation. It is easy to become anxious about the future of healthcare. In some parts of the world, economic crisis has forced countries to make sweeping changes — politically, economically and socially. In its wake, funding for healthcare services, both public and private, has come under pressure and retrenchment has begun. But the simple truth is that, even once the global recession passes, countries will never be able to return to the golden days when healthcare expenditure outstripped GDP growth by between 0.5 percent and two percent per annum for decades at a time. This deal has changed forever. A new era has clearly dawned, whether we like it or not. In the West for example, the combination of slower economic growth, ageing populations, smaller tax-paying workforces and rising healthcare demands is already forcing countries to address some deep seated, pernicious problems. Against this backdrop, many pundits suggest that demography has become our destiny.
Looking back, the casual observer would be inclined to agree; hindsight shows that healthcare has almost always tried to ignore these vexed issues, choosing instead to demand a higher share of economic growth and ramp up staffing levels to respond to immediate ‘pain-points’. But the reality is that this approach is simply not sustainable. A more radical approach that can deliver both better quality and lower cost must be found if we are to fundamentally address the challenges that are already upon us. With deeper analysis, it becomes clear that while for the past 60 years or more technical, therapeutic and professional advances have revolutionized many clinical procedures, the truth is that the underlying business and care models have remained largely unaltered. Unlike most other industries, healthcare has proved to be particularly stubborn when faced with radical change.
In part, this is because many of the new care processes have become imprisoned in the wrong physical infrastructure. Some hospitals lack specialist skills for some of the work they do, even while they provide an over specialized service to patients with multiple chronic conditions. Frequently, different care pathways collide in an uncoordinated fashion and produce sub-optimal quality and cost. At the same time, many primary care systems are underweight and need to be ‘bulked up’. Indeed, the growing elderly population and explosion of patients with long-term physical and mental conditions are a painful reminder that while today’s health systems need different care models fit for the twenty-first century, the day-to-day reality threatens to swamp existing institutions designed for the last century. Clearly, entrenched views make for slow change.
There is a better way. We firmly believe that the five successful habits that we have identified for improving workforce motivation and productivity can produce better quality at lower cost. Christensen, Porter and others have articulated a clear case for clinical and business model change. Their work has demonstrated that the pursuit of better patient value will necessitate care model change that is based on the simultaneous achievement of better segmentation, stratification and integration. Our own work suggests that key ingredients are: the use of sophisticated population modeling techniques that predict risk and assemble a new primary care system focused on supporting wellness and monitoring illness tele-medically; bigger solution shops embedded in local communities and packed with diagnostic capability; integrated services for long-term conditions that create new value-adding businesses; and actively managed and facilitated networks that separate predictable elective procedures from ‘hot’ emergency work, much of which can be both centralized and networked to improve outcomes.
As is increasingly being found in other industries, involving customers (or in our case, patients) in co-production and co-design can dramatically reduce costs, improve satisfaction and enhance outcomes. There are ample examples of those approaches being successfully harnessed throughout the world. Dedicated trauma facilities in Canada and Australia, centralized stroke facilities in England, mass production facilities in India (eyes and hearts) and dedicated orthopedic centers in Scandinavia all show what is possible. In America, Kaiser Permanente’s new ‘cyber care’ approach points to what the empowered patient, when facilitated by technology, can achieve. Experience in South America and Africa tell a clear story of how new and extended non-traditional models of community care can produce substantial health gains.
Our research demonstrates that organizations that are able to achieve these types of transformative changes can increase productivity and work attractiveness simultaneously by adhering to five basic habits. For one, successful organizations tend to have a strategic focus on value for patients. And when this is driven by empowered professionals with considerable autonomy to achieve outcomes, it produces real benefits. We have also found that by combining the intelligent and systematic application of business and care process re-design with a greater level of discretion to change staff roles, adjust deployment and ‘crew’ staff teams, organizations can achieve more stringent adherence to agreed protocols and collective responsibilities. This will require improved management information to support steering staff performance using outcome measures rather than process and input targets. Indeed, the reduction of clinical variation is often controlled, designed and directed by these teams once high-level goals have been agreed with management. Finally, active staff performance management and accountability built on robust dialogue, supportive development and clear lines of responsibility can produce superior levels of discretionary effort.
Underlying these habits is a strong body of evidence that demonstrates that higher staff morale and motivation has a beneficial effect on the patient experience. At the same time, the active maximization of clinical time and the reduction of non-value activities is a central tenet to achieving better quality at affordable costs. Sadly, this is an overwhelmingly neglected area, especially in the public sector. Based on our experience in the sector, we believe that the development of new models and forms of clinical education and training in developing countries represent a great opportunity for educational and healthcare organizations in the West to create mutually beneficial relationships for a sustainable future. If we are to achieve the levels of change necessary then it will be vital that Professional Organizations, Trade Unions, and patient groups are included in the ongoing debate on how policy approaches can be implemented in specific countries and contexts.
If one were to truly believe that demography is destiny then it stands to reason that healthcare is in serious trouble. Already, we are witnessing significant workforce shortages in many developing countries and ageing populations in developed countries. And with fewer staff and more people to care for, we can expect to experience both unaffordable labor costs and further global migration of skilled staff from poor to rich countries. Take, for example, Africa where more than 30 percent of the world’s disease burden is concentrated, but only three percent of the workforce. Clearly, raising staff productivity is absolutely crucial for the wellbeing of billions of people.
Our research also demonstrates that — all too often — staff is seen as a cost to the system. The old mind-set that subscribed to the belief that ‘cost walks on two legs’ needs to be replaced with a new one: ‘value walks on two legs’. This is not just a philosophical nuance. While the current financial climate has led many organizations to opt for ‘quick fixes’ through blunt staff retrenchment and redundancies, the reality is that, in the long run, mass redundancies in healthcare almost always turns out to be unproductive.
Indeed, evidence suggests that dramatic and unsophisticated cost cutting does not last and that costs bounce back. Simply put, the recruitment and training of staff is a costly affair, particularly when all evidence points to the fact that we will need all of the workforce we currently have, and more. Surely the better path, therefore, is to enhance our health workforce’s ability to create more value, efficiency and productivity, meaning that — in the short-term — flexible right-sizing may be the better option. For example, rather than redundancies, health systems may instead focus on the temporary adjustment in working hours coupled with clinical re-design to effectively reduce costs without impacting on quality.
We would like to thank our clients and all of those that participated in this valuable research. Those seeking more detailed analysis of our findings can read the full report at kpmg.com/healthcare. We hope that this report raises the profile of what is currently a relatively neglected issue, and that workforce considerations will become a more prominent component of the debate on maximizing value and reducing costs in health systems around the world.