Tom Peters has been challenging business leaders to achieve excellence for many years. With the publication of the book In Search of Excellence, which he wrote with Bob Waterman, Peters caused businesses to re-evaluate the way they operated. Now Peters is turning his attention to the healthcare industry, urging hospitals and health systems to make improvements "one experiment at a time."

Richard L. Clarke, DHA, FHFMA, president and CEO of HFMA, recently talked with Peters about his views on excellence in healthcare leadership.

Clarke: I noticed a comment about health care on your web site. When asked about your vision for a healthcare future devoted to excellence, you noted that nothing short of a revolution is necessary. What do you mean by a revolution?

Peters: I've been spending more time on health care in the last couple of years, and the overriding issue that has come to fascinate me is, why is it that we have such great technology and so much money, yet the British, who have neither of those things, have a longer life expectancy?

What Bob Waterman and I started doing in In Search of Excellence in 1982 was simply to ask some elementary, simplistic questions that people tended to have forgotten. I like to start at that highest level, because, although your members are financial people, I don't see them that way. I see them as people in the healthcare healing industry who happen to do numbers
for a living.

That's the macro level. What got to me at a detailed level was this enormous business of patient safety. It started in 1999 with the Institute of Medicine's report To Err Is Human: Building a Safer Health System, which said as many as 98,000 people were dying in hospitals each year as a result of medical errors. Now some believe that number is a low estimate; some say it's as high as 200,000. Whatever the actual number is, it's a disgrace.

Clarke: What are the elements that will drive change in health care?

Peters: At the top of the list are quality and patient safety. Another element is spending. We have a shockingly large number of aging baby boomers. We now have telemedicine opportunities to keep them out of the hospital, out of the doctor's office, so we can monitor them from far away. Moving healthcare IT into the 21st century is another. It's switching the incentive systems away from the super-surgeons and into the world of family practice, where we could save lives. It's a revolution in simplicity.

My revolution is a revolution of simplicity that gets us focused back on delivering health care and realizing that a lot of our operational problems that are involved with healthcare delivery itself are problems that can be fixed with some straightforward solutions. Just throwing money at these problems is not the answer. The point, which is what we started talking about in In Search of Excellence almost 30 years ago, is that people have done it. They've done it in public hospitals. They've done it in private hospitals. I know it can be done well.

Clarke: Is there something that a healthcare leader could do that would make a difference? What advice would you give to a CFO of a healthcare organization who's struggling with these issues, not sure where to go next?

Peters: My advice would be, to the extent that they haven't already done this, to step back and become a student. Step back to work on making themselves experts in some of the issues, such as patient services, to go to some of these so-called-and I don't like the term very much-patient-centric hospitals that are working. Get involved in this process. Become an expert. You like numbers. You like analysis. I understand all the reimbursement problems. CFOs deal with enormously complex issues. But ask yourself, "What am I going to do in my hospital to make the world a better place?"

Clarke: Most people agree that financing and payment of healthcare delivery is broken. Some say we're wallowing without national leadership or direction. What should financial leaders do?

Peters: They're going to wallow for the next 15 years. I hear that in so many areas. The answer is continue to lobby, continue to work, but on the other hand, get over it. Get over it in the sense that we need to have some real excellence in financial management at the hospital level, while at a higher level we worry about the overall health system.

I certainly understand the significant role that the giant health systems play, but most of your members are laboring in the trenches, laboring in individual hospitals. So fix them. The CFO or CEO at Aetna could deal with some of the strato-spheric problems, but in large health systems, CFOs ought to be spending 99.7 percent of their time on making the hospital better, and then giving their money to their various trade associations to lobby for the right thing.

Clarke: Let's talk about return on investment related to quality or excellence-the idea that quality is free. But don't you still have to make investments on the front end? Sometimes the payback, given the current healthcare reimbursement system, is hard to measure. What advice would you give to healthcare finance officers as they struggle with that issue?

Peters: Experiment. I was reading a story that was completely consistent with what you are saying, about somebody who moved a simple health procedure out of the hospital, and it worked so well that it cut down on the number of more highly reimbursed activities that were taking place, so people got healthier but the bottom line got unhealthier. I do understand that the fundamental incentive schemes are really that bad.

To go back to your statement and this question, we did learn 25 years ago that quality is free, and we also learned that it doesn't require a big upfront investment. The one arena that's going to cost money-although it costs different amounts and some people do it and some don't-is certainly electronic health records, which is central and expensive.

As a business person, I've argued that the masters of business administration degree ought to be called a masters of business arts. CFOs and their associates deal with numbers, but the reality is they're dealing with a lot of stuff that's non-numerical. I don't want you to sign off on a $3.5 million investment to make patient safety things happen in your hospital. I do want you to sign off on 14 little experiments that go after bits and pieces of it where we can see what works and what doesn't work.

Look at hospitals such as Griffin Hospital, which achieved success by reorganizing and adopting the Planetree patient-centered care model. They did not do this overnight. They did it over a 15-year period. They had a soaring vision, but they took it a piece at a time. The net result financially is they are so good on patient-centricism and patient safety that they are attracting patients from everywhere. They are making money as a private hospital, increasing market share, without buying their competitors, and it will pay off. But it's not an overnight program.

In the same vein, most of the first five years of experimentation that the Veterans Administration hospitals did cost peanuts. They did not start out with a mega-plan that cost the taxpayers hundreds of millions of dollars.

What's important is practicality, experimentation, very much getting involved in the hospital. Every person's busy. That's not an excuse for not becoming an expert in the process of healing people. Become a player in the hospital's activities. Look at yourself as doing in your own fashion the same thing that the doctor or the nurse or the technician is doing. As a CFO, you can become a champion of half a dozen different programs.

Our problem is not that we need a ton more money. It's that we need to use the money that we have in a far more effective fashion and bring some of these procedures out of the Dark Ages.

Exhibit 1

sidebar-1-Tom Peters

Publication Date: Thursday, May 01, 2008

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