Are Healthcare CEOs Chasing the Wrong Things?
Whether it's an initiative in our strategic plan that has languished for months, or an item on our to-do list that never makes it to the top, many of us are vulnerable to the distractions abundant in healthcare. And while the problem is widespread, if you're a CEO, the resulting impact can move from being a minor lack of achievement to a critical weakness that threatens organizational performance.
Financial pressures, workforce shortages and new government mandates always land near or at the top of the list of key concerns tracked by the ACHE CEO survey. As we grapple with these issues—which by their nature are never crossed off our to-do lists—bright shiny distractions appear. These diversions are usually initiatives that are interesting to think about, like investing in a tech startup, partnering in a retail clinic or implementing a business model that has shown promise at other hospitals and systems.
As CEOs, these opportunities cross our desks, sometimes pummeling us at a fast and furious rate. So what's a CEO to do? Chuck them? Give them a fair and equal review?
First, let's remember our charge as healthcare CEOs. We lead organizations. We ensure our organizations are relevant and sustainable, while fulfilling their missions. We prioritize initiatives and pace them, as best we can, to match market demand.
The strategies we set for our organizations must capitalize on what our patients and communities need, and on what we are uniquely positioned to deliver. We must tune out the noise and stick to these strategies unless compelling reasons to change direction appear. It's our job to keep people focused on the right stuff.
Yet the gravitational pull to the next greatest thing—to the next silver bullet—is strong. As CEOs, we don't want to be too old-school or too rigid. We want to be viewed as innovators; integral players in a changing world. But the stakes for being innovative are high and often uncertain. Healthcare is riddled with failed trends and technologies. Private equity-backed healthcare deals, which reached $63 billion in 2018, according to Modern Healthcare magazine, are the most recent distraction. Despite the glut of funding poured into these ventures, big winners or even stable startups are in short supply.
Healthcare organizations caught up in the allure have paid a steep price. Financial and human resources are drained, political goodwill is squandered and the ability to execute on core strategies is threatened. Private equity exists to return a multiple to investors who have their sights on gaining wallet share of the $3.7 trillion annual healthcare spend.
As CEOs, we must face the hard truth that investing in healthcare start-ups is not innovation. It is an investment strategy that often goes awry because companies fail, or the sponsoring healthcare organization is compelled to implement the technologies in which they invested. These biased decisions, often made without appropriate due diligence and alignment with strategy, usually result in costly losses. This is not innovation; it's bad business.
A select group of healthcare organizations have the infrastructure, talent and financial capabilities in place to claim innovation as a strategy. Many of us don't and shouldn't. Our job is to execute on core strategies that will get us much further than rolling the dice on a craps table full of distractions. Before we get too far into 2020, this is the best time to evaluate how many new opportunities your organization can chase while fully and successfully executing on core strategies. That means selectively evaluating opportunities, while having the mental discipline to stick to what will help our organizations thrive. Steve Jobs said, "I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things." If that quote holds true, then many of us can claim to be innovative this year by saying "no," with frequency and without regret.