The job of a hospital CEO can be overwhelming. There are so many areas to oversee, decisions to make and problems to solve. If you aren’t careful, you’ll spend your whole day responding and reacting instead of laser-focusing on the issues that drive results.
Before you know it, those days turn into weeks that turn into months that turn into years. Eventually you come to see that you’ve spent most of your valuable time addressing the symptoms of problems instead of the problems themselves.
The solution to reducing chaos is creating structure. When you consistently and deliberately take aggressive action on the metrics that matter most, many of the peripheral problems that would otherwise take up your day will solve themselves.
So what are the big issues a CEO should focus on? In my experience, they fall into four “buckets:” productivity, volume, clinical quality and service.
I find it’s helpful to break these categories into specifics and put them into a timeline. There are three categories of tasks — those to do yearly, quarterly and daily. I recommend the following checkpoints:
Metrics and issues to monitor daily
One quick note before I dive in: In a LEAN environment the CEO might make these actions part of his or her Leader Standard Work list.
1. Outpatient no-shows. Patient no-shows hurt productivity and cost the healthcare industry billions each year. If you notice your hospital’s numbers are running high, it might be time to tweak your reminder system or switch to a better one.
2. First case start-times. Prompt start times are crucial for preventing delays and bottlenecks, and for keeping the OR running smoothly.
3. Patient volume. How many admissions are in the hospital each day?
4. “Door-to-doc” time in the emergency department. How long do patients wait to be seen by a physician or advanced practice provider in the ED? This has implications for staffing levels, patient safety, and patient and employee satisfaction. This metric, those regarding the following two items and those regarding wait times for certain other care processes are available to the public on Medicare Hospital Compare. Patients will compare your wait times with those of your competitors to decide which hospital to visit.
5. “Decision to admit to departure” time in the ED. How long does it take from the time the emergency physician decides to admit a patient to an inpatient bed to the time the patient actually leaves the ED for that bed?
6. Number of patients who leave without being seen in the ED. Studies have shown LWBS visits are an indication of ED crowding and are associated with longer ED wait times. Patients who leave the ED without being seen are more likely to report worsened health problems.
7. Agency and overtime costs. It’s important to look at agency costs constantly, because when you use agencies you pay a premium price for hospital labor. This may be a temporary cost if labor is assigned for a certain project, but most of the time, high agency costs mean the hospital has a turnover issue, a recruitment issue or — most often, in my opinion — a retention issue. All three of these are strongly correlated with employee engagement issues. Those who have high agency costs, might also have lower patient experience costs because there are employees who don’t know each other and aren’t familiar with the health system.
8. Major service issues. Are any patients upset? If so, it may be a good idea to handle these situations personally.
9. Major engagement issues. Are any physicians or employees upset? This is the time to address major issues in employee or physician morale. Employee engagement affects patient safety and process improvement. That one number can impact all sorts of things. I would suggest employee and physician satisfaction be regular agenda items at your department head and medical executive committee meetings.
Metrics and issues to monitor quarterly
While most of these issues need to be looked at continually, I recommend an intensive review of them at least four times a year.
1. Quality metrics. How are the hospital’s HCAHPS results? Process of care measures? Outcome measures? Pay-for-performance changes make these benchmarks particularly “hot,” as they are directly linked to the health of hospitals’ operating margins.
2. Employee metrics. Are employees satisfied? How are turnover rates? Employee engagement is essential to high-performance organizations. I suggest holding employee forums quarterly to give employees a chance to be heard.
3. Physician metrics. This includes referral patterns as well as satisfaction ratings. It’s important to ensure physicians are deeply engaged in hospital operations and that they see your organization as a great place to practice medicine.
4. Philanthropy. While most organizations zero in on philanthropy once a year, quarterly is better in a time when so many hospitals are struggling to sustain themselves. With government funding getting harder and harder to obtain, philanthropy grows more important. Keep an eye on donations. Know when donations increase and decrease, and understand why. Also, keep the lines of communication open. It’s important to provide the people who donate money with regular feedback on where their funds went.
5. Board communication. I put this one in the “quarterly” bucket, but it should probably happen more frequently than that. Communicate with key board members vigorously and often. The end of the year is too late. Most hospital CEOs are never formally measured on board communication. They assume that going to board meetings is enough, but it isn’t: if there’s a problem, it festers and will one day explode. The CEO should meet with every board member individually to ask what he or she defines as healthy communication. This is about clarifying expectations and measuring them so the CEO is not surprised when an issue comes to head.
Steps to take annually
1. Hold an intensive leadership assessment. How aligned are your leaders in terms of mindset and resources? Is there a universal sense of urgency regarding the need for constant improvement? Are you taking the right actions quickly and precisely? What about your systems and processes — do they hold people accountable for executing well? Studer Group offers the Straight A Leadership Assessment to evaluate leaders, but if you don’t use this tool, find another way to measure these vital leadership issues.
2. Audit your evaluation system. How well do leader assessments match up to the results they’re responsible for? If most of your leaders receive a “substantially exceeds expectations” rating, your organization needs to be hitting most, if not all, of its goals. I find this is often not the case. If you’re using a subjective evaluation tool, rather than an objective one linked to hard goals, it may be time to re-think your approach.
3. Evaluate vendor contracts. Look closely at these relationships in two areas: cost and performance. A while back, I was talking to a hospital CEO who was preparing for a reduction in force at his organization. I pulled up the hospital’s HCAHPS results and saw the organization was in the 12th percentile for cleanliness. Its environmental services were outsourced. I would have reevaluated that contract in a minute. Monitor the vendor costs — not only the market price but the cost in terms of performance. Remember, hospitals can tie performance into their contracts with vendors. It’s common in certain areas, but could be common in more.
As I was writing this article, I struggled with whether to put “daily” items or “annual” items in first position. I decided on daily, and for a reason. If you are truly monitoring these crucial issues every day — and making smart decisions based on the evidence you’re seeing — your quarterly and annual tasks will be much, much easier. Throughout the year, you will build a solid foundation for your annual tasks, and you’ll be deeply familiar with the issues.
Together, these checklists make up a “dashboard” that will help hospital CEOs steer their organizations confidently through the hurricane of change that’s buffeting our industry.
I urge you to pay close attention to your dashboard. Sometimes, hospital CEOs don’t want to measure these issues when they anticipate a poor score or outcome. For example, if they sense poor physician morale, they may want to avoid measuring it and validating their fear. Or CEOs don’t pin down the metrics in order to avoid conflict with the board. They anticipate that board members will not be pleased with the results, and they want job security.
CEOs need to look at these metrics as if they were physicians. Physicians do not simply tell patients they don’t want to measure their blood pressure. It has to be done. Keeping tabs on the health of your organization has to be done, too. It may mean enduring some discomfort up front and learning a new habit — but when you experience the long-term gains in your organization’s health, you’ll be glad you did it.