Stability and continuity in leadership play important roles in the performance and survival of any organization. Because of the unique mission and specialized workforce of hospitals, stability and continuity at the helm of these health care institutions are especially important. The ever-changing landscape of government regulations, reimbursement reductions, technological advancements, cybersecurity threats, and making new drugs available to patients makes health care even more complicated. Changes in landscape and in top leadership occur frequently in the nation’s hospitals, and these changes can negatively affect the hospitals and their patients.
Fortunately, Lean Six Sigma in healthcare can help improve health care by offering stability and continuity to hospitals and other health care institutions.
High CEO Turnover Rates are Common
High turnover among hospital and health system chief executive officers (CEOs) has become the norm. Hospital CEO turnover rate has held at 18 percent since hitting its high of 20 percent in 2013, according to the American College of Health care Executives (ACHE), and it remains one of the highest across all industries. ACHE attributes this high turnover rate to the influence of continuing consolidation of health care organizations, the ongoing progression towards new models of care, and the retirement of baby boomer leaders.
ACHE also published the results of a survey on the effects of high turnover rates among hospital CEOs. The results of that survey of 805 hospital CEOs showed that the average tenure of was just over 5.5 years, with a median of only 43 months. Only 3.4 of CEO had been at their institution for more than 20 years.
The survey asked the CEOs about the reasons for their departure from their hiring institutions: just over two-thirds said it was entirely their own decisions, while the other third said the departures were involuntary. Interestingly, the average tenure was about the same for voluntary departures as it was for involuntary departures.
The CEOs cited a variety of reasons for their departure from the health care institution. Many of the common reasons cited were predictable and normal reasons to leave a job: the search for a better position, conflict with co-workers and supervisors in the form of medical staff or board members, and inadequate salary. Other common reasons included promotion, force-out, retirement, and death.
One of the most unexpected reasons for departure cited by the hospital CEOs, though, was instability of the system. While the survey did not go into detail about this systemic instability, the uncertainty of operations under the tenure of multiple administrators certainly does play a role.
Many leaders in the health care industry worry about the future of Medicaid, and others are concerned about the slow transition to value-based care. Other top concerns include declining margins, recruiting and retaining forward-thinking leaders, dealing with new technology and the cybersecurity risks that go along with that new technology, and adapting to the constantly evolving consumer expectations. In many cases, these issues are interrelated and compounded by the uncertainty of the nation’s current health care.
High CEO Turnover Rates can Stop Progress in the Health Care Community
The respondent CEOs viewed the turnovers as having a negative effect on the institutions they left behind. Seventy-one to 85 percent said the community relations, hospital culture, medical staff relations, and employee morale suffered as the result of their departure. They also said that their departure delayed building, construction and equipment acquisition.
The high turnover rate, short CEO tenure and negative effects of CEO turnover underscore the importance of succession planning in the C-suite. These plans should focus on the naming and preparation of successors, and development of a pipeline of future leaders. Lean Sigma® can improve health care by providing stability and continuity to an institution throughout changes in leadership and regulations.
Lean Six Sigma Can Improve Health Care
Lean Six Sigma® is the revolutionary fusion of today’s most powerful business improvement tools, developed, practiced and delivered by Soriant Solutions. Lean Six Sigma harnesses the power of Lean and Six Sigma into a single, coordinated initiative capable of driving rapid, high-impact improvements throughout your company.
Six Sigma and Lean are independently recognized as the most effective improvement tools for facilitating operations today, but combining the two can have paralyzing results. Companies may not know which to implement first, for example, or even how to initiate the implementation process. Using traditional Six Sigma is also time-consuming, with projects typically taking six or more months to complete.
Lean Six Sigma helps CEOs drive and monitor improvement work within the organization, which helps the institution ultimately overcome CEO transitions and resource constraints and facilitate improvements to the health care they provide.
Lean Six Sigma improves health care by clearing confusion and saving time. Seamless integration significantly reduces lead-time and variation that helps health care organizations achieve rapid improvement. Lean tools remove unnecessary time and activity from traditional Six Sigma project to reduce the average completion time from six months to a mere six to eight weeks, to help health care organizations drive faster and more substantial bottom-line results in less time.
Lean Six Sigma is a simple methodology, based on common sense practices that effectively resolve a problem. Institutions can implement Lean Six Sigma in five phases:
- Define – Defining the problem and identifying potential solutions
- Measure – Mapping the current process to collect data
- Analyze – Investigation and identification of the underlying causes of the problems
- Improve – Implementation of a solution that resolves the problem
- Control – Sustaining the improved results
In other words, Lean Six Sigma helps hospital CEOs identify the root cause of a problem and implement a solution based on data, rather than relying on intuition and assumptions made by previous CEOs. Implementing Lean Six Sigma solutions helps hospitals and health care institutions stay on course, despite changes in the C-suite and the shifting landscape of acquisitions and government regulations.
Lean Six Sigma provides a number of benefits to the health care institutions that include:
- A substantial improvement in speed
- Increased responsiveness
- Substantial sales and earnings growth
- A new competitive advantage to give health care organizations the edge they need
The process of improving health care is different from other industries, as the collecting usable data is often rigorous and quite labor-intensive. Because it is a heavily data-driven process that eliminate defects and improve workflow, many health care organizations choose Lean Six Sigma to help them achieve quality improvement goals. Many organizations frequently rely on professionals with certification in Lean Six Sigma to help maintain the strength of the methodology, particularly when it comes to statistics.
Lean Six Sigma Green Belt certified professionals have undergone special training, including hands-on, experiential learning opportunities that help them address real world problems that exist in nearly every health care organization.
Lean Six Sigma is for large health care organizations and small hospitals alike. Smaller institutions, particularly those in rural areas, often struggle with data management. The CEO of a small rural hospital may want to improve the process of helping patients recover from heart attacks, for example, but does not have enough data to fully test their program to determine whether any improvements made had actually eliminated opportunities for defects. Larger organizations may experience this dilemma too, even those institutions large enough to collect that much data.
Without Lean Sigma, these CEOs and administrators may suffer “analysis paralysis,” wasting an exorbitant amount of time and resources adhering to unwieldy rigid statistical tools and analyzing data, instead of implementing the quality improvements as soon as possible for patients. Lean Six Sigma allows CEOs to implement plans to improve care and continue acting on those plans implemented by former CEOs, despite any changes in administration.
Every health care institution is unique; each plays a different role in the community and faces different operational and administrative challenges, such as high CEO turnover. Lean Six Sigma allows health care institutions to create their own responses to their distinctive situations.