Healthcare

2012

Designed for Workarounds: A Qualitative Study of Hospitals' Internal Supply Chains Anita Tucker, C Folck, WS Heisler, L Janisse Best Paper Proceedings of the Academy of Management (2012)

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We examine the internal supply chains at two service organizations to discover the source of disruptions that erode employees' efficiency. Through in-depth qualitative research, including observations and interviews of over 80 individuals from 6 service delivery units and 8 support departments that provide them with equipment and supplies, we find that a lack of interconnectedness among interdependent departments-rather than errors or execution issues-leads to disruptions in the internal supply chains. We develop the concept of interconnectedness as four conditions of an internal supply chain: a focus on system-rather than individual department-performance; routines within departments that are connected to current customers' needs; deliberate knowledge translation across departmental boundaries to enable efficient response; and an infrastructure for daily management and continuous improvement of the chain's performance. Furthermore, we find that employees on the service delivery unit spent 12% of their day compensating for internal supply chain problems, which is a disproportionate amount of time compared to the support departments. We suggest that the burden of compensating for the disconnected internal supply chains fell to the service providers because they were the only department that had both the ability to translate customer orders into requirements for materials and the responsibility for securing these materials. To read more click here.

Addressing the Leadership Gap in Medicine: Residents' Need for Systematic Leadership Development Training Daniel Mark Blumenthal, Kenneth Richard Lee Bernard, Jordan David Bohnen, Richard Bohmer Academic Medicine 87, no. 4 (April 2012)

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All clinicians take on leadership responsibilities when delivering care. Evidence suggests that effective clinical leadership yields superior clinical outcomes. However, few residency programs systematically teach all residents how to lead, and many clinicians are inadequately prepared to meet their day-to-day clinical leadership responsibilities. The purpose of this article is twofold: first, to make the case for the need to refocus residency education around the development of outstanding "frontline" clinical leaders and, second, to provide an evidence-based framework for designing formal leadership development programs for residents. The authors first present a definition of clinical leadership and highlight evidence that effective frontline clinical leadership improves both clinical outcomes and satisfaction for patients and providers. The authors then discuss the health care "leadership gap" and describe barriers to implementing leadership development training in health care. Next, they present evidence that leaders are not just "born" but, rather, can be "made" and offer a set of best practices to facilitate the design of leadership development programs. Finally, the authors suggest approaches to mitigating barriers to implementing leadership development programs and highlight the major reasons why health care delivery organizations, residency programs, and national accreditation bodies must make comprehensive leadership education an explicit goal of residency training. To read more click here.

A 'Core Periphery' Framework to Navigate Emerging Market Governments-Qualitative Evidence from a Biotechnology Multinational Prithwiraj Choudhury, James Geraghty, Tarun Khanna Global Strategy Journal 2, no. 1 (February 2012): 71-87

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We build on the emerging literature of influence-based models to study how multinational firms can navigate host governments. Our 'core-periphery' framework posits that the actions that an MNC takes with actors in what we call the 'periphery'-comprised of state, quasi-state, and civil society actors-can lead to positive or negative influence with interconnected state actors in a 'core'. There are two mechanisms by which this can happen: engaging the periphery may either change the information set of the core or help align incentives of multiple core actors. Engaging the periphery might be particularly relevant in settings where the institutional framework is still emerging. We build a case study of a multinational firm in the biotechnology sector to illustrate how the core-periphery framework works in multiple emerging markets across institutional differences. The analysis is based on 32 interviews conducted with the CEO and other executives of Genzyme at the corporate headquarters in Cambridge, Massachusetts, and in subsidiaries in Brazil, China, Costa Rica, France, India, and the United States To read more click here.

The Looming Challenge to U.S. Competitiveness Michael Porter, Jan Rivkin Harvard Business Review 90, no. 3 (March 2012): 54-61

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The United States is a competitive location to the extent that companies operating in the U.S. are able to compete successfully in the global economy while supporting high and rising living standards for the average American. By this standard, U.S. competitiveness is in grave danger. The erosion of U.S. competitiveness began well before the Great Recession. The U.S. faces competition from a widening range of nations with lower wages and improving economic strategies. But a short-term focus in many businesses and political gridlock have prevented the U.S. from taking the steps needed to meet the challenge. The U.S. retains core strengths in areas such as entrepreneurship and higher education. However, these are increasingly nullified by weaknesses in the tax code, fiscal policy, strong human development (good health care and K-12 education systems), and other areas. To address its challenges, America needs a strategy and a consensus on direction. Government will play a crucial role, but business must lead the way. To read more click here.

2011

Measuring Teamwork in Health Care Settings: A Review of Survey Instruments Melissa A, Valentine, Ingrid M Nembhard, Amy Edmondson Harvard Business School Working Paper, No. 11-116, May 2011

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To identify, review, and evaluate survey instruments used to assess teamwork, a process critical to delivering quality care, so as to facilitate high quality research on this topic. Data sources. The ISI Web of Knowledge database, which draws articles from MEDLINE, Social Science Citation Index, and Science Citation Index. Study design. We conducted a systematic review of articles published before January 2010 to identify survey instruments used to measure teamwork. We evaluated instruments' psychometric properties (e.g., discriminant and content validity) and assessed whether they had been shown to relate to outcomes of interest in peer-reviewed studies. Data extraction. We identified relevant articles using the search terms team, teamwork, work groups, or collaboration, in combination with survey or questionnaire. Principal findings. We found 58 scales that measured teamwork; 12 of them have been shown to relate to non-self-report outcomes of interest. Dimensions of teamwork measured differed across scales; however, each of the 12 scales assessed some dimension of the quality of social interactions between members. All but one also assessed some dimension of the quality of task-related interactions. Only three scales met all of the criteria for psychometric validity. Conclusions. Numerous survey instruments exist to measure teamwork. Few have demonstrated all of the psychometric properties recommended for use, and there is inconsistency in conceptualizations of teamwork. We identify several useful measures and suggest that more research is needed to develop and refine measures of teamwork for reliable use by researchers and practitioners/managers. To read more click here.

An Angel Investor With an Agenda Regina Herzlinger Harvard Business School Review 89, no. 3

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Gloria Londono, the owner of a chain of day care centers for the elderly in Spain, is offered 3 million euro by Victor Serna, a wealthy physician-investor. Should she accept Serna's offer or stick to her currently successful strategy of going it alone? To read more click here.

Deliberate Learning to Improve Performance in Dynamic Service Settings: Evidence from Hospital Intensive Care Units I M Nembhard, Anita Tucker Organization Science September 2010

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Dynamic service settings-characterized by workers who interact with customers to deliver services in a rapidly changing, uncertain, and complex environment (e.g., hospitals)-play an important role in the economy. Organizational learning studies in these settings have largely investigated autonomous learning via cumulative experience as a strategy for performance improvement. Whether induced learning through the use of deliberate learning activities provides additional performance benefits has been neglected. We argue that the use of deliberate learning activities offers performance benefits beyond those of cumulative experience because these activities counter the learning challenges presented by rapid knowledge growth, uncertainty, and complexity in dynamic settings. We test whether there are additional performance benefits to using deliberate learning activities and whether the effectiveness of these activities depends on interdisciplinary collaboration in the workgroup. We test our hypotheses in a study of 23 hospital neonatal intensive care units (NICUs) involved in a quality improvement collaborative. We find that using deliberate learning activities is associated with better workgroup performance, as measured by NICUs' risk-adjusted mortality rates for 2,159 infant patients, but only after two years. In the shorter term, using these activities is associated with worse performance. By the third year, the positive impact of using deliberate learning activities is similar to the benefit of cumulative experience (18% and 20% reduction in odds of mortality, respectively). Contrary to prediction, interdisciplinary collaboration mediates, rather than moderates, the relationship between using deliberate learning activities and workgroup performance. Thus, our data suggest that using deliberate learning activities fosters interdisciplinary collaboration. To read more click here.

The Importance of Work Context in Organizational Learning from Error Lucy H MacPhail, Amy Edmondson Harvard Business School Working Knowledge

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This paper investigates the range of work contexts in which errors occur in organizations and the implications of this variation for organizational learning. To read more click here.

Individual Rationality and Participation in Large Scale, Multi-Hospital Kidney Exchange Itai Ashlagi, Alvin Roth NBER Working Paper Series, No. 16720

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As multi-hospital kidney exchange clearinghouses have grown, the set of players has grown from patients and surgeons to include hospitals. Hospitals have the option of enrolling only their hard-to-match patient-donor pairs, while conducting easily arranged exchanges internally. This behavior has already started to be observed. We show that the cost of making it individually rational for hospitals to participate fully is low in almost every large exchange pool (although the worst-case cost is very high), while the cost of failing to guarantee individually rational allocations could be large, in terms of lost transplants. We also identify an incentive compatible mechanism. To read more click here.

2010

Measuring Health Outcomes Michael Porter The New England Journal of Medicine

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Achieving good patient health outcomes is the fundamental purpose of healthcare. Measuring, reporting, and comparing outcomes is perhaps the most important step toward unlocking rapid outcome improvement and making good choices about reducing costs. To read more click here.

Management in Healthcare: Why Good Practice Really Matters? Raffaella Sadun, Stephen Dorgan, Dennis Layton, Nicholas Bloom, Rebecca Homkes McKinsey & Company: London School of Economics and Political Science

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This report examines the hypothesis that a company's management practices are likely to have a strong effect on its performance, and that this effect might be stronger than many of the other factors that determine whether a business succeeds. To read more click here.

From Bench to Board: Gender Differences in University Scientists' Participation in Commercial Science Waverly W Ding, Fiona Murray, Toby Stuart Harvard Business School Working Paper, No. 11-014

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This paper examines gender differences in the participation of university life science faculty in commercial science. Based on theory and field interviews, we develop hypotheses regarding how scientists' productivity, co-authorship networks, and institutional affiliations have different effects on whether male and female faculty become "academic entrepreneurs." We then statistically examine this framework in a national sample of 6,000 life scientists whose careers span more than 20 years. We find sharp gender differences in participation in for-profit ventures, which we measure as the likelihood of joining the scientific advisory board (SAB) of a biotechnology firm. Compared to men, women life scientists are much less likely to advise for-profit biotechnology companies. We also identify factors that contour this gender difference, including scientists' co-authorship network structure and the level of support for commercial science at their universities. Surprisingly, we find that the (conditional) gender gap is largest among faculty members at the highest status institutions. To read more click here.

Boundary Spanning in a For-profit Research Lab: An Exploration of the Interface Between Commerce and Academe Christopher C Liu, Toby Stuart Harvard Business School Working Paper, No. 11-012

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In innovative industries, private-sector companies increasingly are participants in open communities of science and technology. To participate in the system of exchange in such communities, firms often publicly disclose what would otherwise remain private discoveries. In a quantitative case study of one firm in the biopharmaceutical sector, we explore the consequences of scientific publication-an instance of public disclosure-for a core set of activities within the firm. Specifically, we link publications to human capital management practices, showing that scientists' bonuses and the allocation of managerial attention are tied to individuals' publications. Using a unique electronic mail dataset, we find that researchers within the firm who author publications are much better connected to external (to the company) members of the scientific community. This result directly links publishing to current understandings of absorptive capacity. In an unanticipated finding, however, our analysis raises the possibility that the company's most prolific publishers begin to migrate to the periphery of the intra-firm social network, which may occur because these individuals' strong external relationships induce them to reorient their focus to a community of scientists beyond the firm's boundary. To read more click here.

Speaking up constructively: Managerial practices that elicit solutions from front-line employees Julia Rose Adler-Milstein, Sara J Singer, Michael Toffel Harvard Business School Working Paper, No. 11-005

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Ideas that could enable organizations to improve their operating processes often come from front-line workers who voice concerns and share ideas about how to solve problems. Our study is among the first to develop and empirically test theory about how specific management practices can encourage employees to speak up about problems and to offer suggestions for solving them. We hypothesize that employees are more likely to speak up and offer solutions when organizations launch information campaigns to promote process improvement and when managers engage in process-improvement activities themselves. We test our hypotheses in the health-care context, in which problems are frequent and many organizations use incident-reporting systems to encourage employees to communicate about the operational problems they witness. Using data on nearly 7,500 reported incidents, we find that information campaigns encouraging process improvement promote both speaking up and offering solutions, while managerial engagement in process improvement promotes the latter. Our findings suggest that particular management practices can influence front-line workers' decisions about whether to speak up and that direct managerial engagement can result in their doing so constructively. To read more click here.

The Work-Around Culture: Unintended Consequences of Organizational Heroes Anita Tucker Harvard Business School Working Knowledge

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Work-around cultures are pervasive in health care. Employees tend to work around obstacles, often feeling like a hero in the process, without solving the underlying problems. The reasons for these cultures are manifold, but they are costly in financial and human terms. To read more click here.

Managing the New Primary Care: The New Skills That Will Be Needed Richard Bohmer Health Affairs 29, no. 5

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This essay argues that primary care physicians should be equipped with the management skills necessary to develop and implement new models of primary care. HBS Professor Richard Bohmer demonstrates that developing new models of primary care will demand a level of managerial expertise that few of today's primary care physicians possess. To read more click here.

Fixing Health Care on the Front Lines Richard Bohmer Harvard Business Review 88, no. 4 (April 2010)

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In the United States and around the world, there have been plenty of proposals for curing what ails health care. All of them--new organizational forms, alternative payment systems, and free-market competition--aim to tackle a universal challenge: improving the quality of care and reducing, or at least curbing, its cost. But the reality is that regardless of what happens to the many experiments and reform efforts, including the one in Washington, the basic structure of the health care system in the United States and most other countries will remain in place for the foreseeable future. The only realistic hope for substantially improving care delivery is for the old guard to launch a revolution from within. Existing providers must redesign themselves. They must revamp core clinical processes and the organizational structures, management systems, and cultures supporting them so that they excel at performing three discrete tasks simultaneously: rigorously applying scientifically established best practices for diagnosing and treating diseases that are well understood; employing a trial-and-error process to deal with complicated or poorly understood conditions; and capturing and applying knowledge generated by day-to-day care. Some organizations - such as Intermountain Healthcare, the Cleveland Clinic, and Istituto Clinico Humanitas - have already redesigned themselves in ways that improve quality and lower costs. But no single dominant design exists; each organization has its own environment, structure, and history. More important than the specific designs are the four principles on which they are based: focus on the decisions, tasks, and workflows crucial to optimizing patient care; separate high- and low-variability care; reconfigure the supporting infrastructure and practices to match redesigned clinical processes; and design structure and processes to help organizations learn from their daily work. To read more click here.

Healthcare reform and its implications for the U.S. economy Regina Herzlinger Harvard Business School Supplement BH372

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U.S. healthcare is currently a poor value proposition in relation to its cost. This must change. Driven by the fundamental forces of financing, consumer preferences, and technology, the U.S. is heading for a profound revolution in healthcare, one that will affect not only the system itself but also the larger U.S. business community. This new healthcare system will create vast opportunities and commensurately large risks for healthcare innovators. The outcomes of the present healthcare reform debate will either liberate or further shackle these innovators. Reforms that depend on governmental controls are more likely to dampen innovation than those achieved through control by consumers, and given the profound ramifications of healthcare reform outcomes, policy makers would be well-advised to harness the forces of consumerism in fashioning reform. To read more click here.

The Economic Crisis and Medical Care Usage Annamaria, Lusardi, Daniel Schneider, Peter Tufano Harvard Business School Working Paper, No. 10-079

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In this research, Annamaria Lusardi of Dartmouth College, Daniel Schneider of Princeton University, and Peter Tufano of Harvard Business School find strong evidence that the economic crisis has led to large reductions in the use of routine medical care. To read more click here.

Leadership with a Small "l" Richard Bohmer British Medical Journal

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What exactly do we mean by leadership in health care? Does it mean to take formal positions in senior leadership teams in hospitals, trusts, health boards, ministries of health, and professional societies-what might be termed leadership with a big "L?" Or does it mean something fine grained and local-leadership with a small "l?" To read more click here.

The Evolution of Science-Based Business: Innovating How We Innovate Gary Pisano Harvard Business School Working Paper, No. 10-062

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This is an essay about organizational innovation and experimentation in the business of science. HBS professor Gary Pisano examines the changing nature of the science-business intersection and describes the emergence of a science-based business as a novel organizational form. He also describes the institutional and organizational challenges created by this convergence. To read more click here.

2009

Practicing Medicine in the Age of Facebook Sachin H Jain New England Journal of Medicine 361, no. 7 (649-651)

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In my second week of medical internship, I received a "friend request" on Facebook, the popular social-networking Web site. The name of the requester was familiar: Erica Baxter. Three years earlier, as a medical student, I had participated in the delivery of Ms. Baxter's baby. Now, apparently, she wanted to be back in touch. Despite certain reservations, I clicked "confirm," and Ms. Baxter joined my list of Facebook "friends." I was curious to hear about the progress of her baby girl, but I wondered about the appropriateness of this interaction. To read more click here.

The Shifting Mission of Health Care Delivery Organizations Richard Bohmer, Thomas H Lee New England Journal of Medicine 361, no. 6 (August 5, 2009).

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An important transition has begun in payment for health care delivery in the United States: organizations that have long been paid for transactions, such as visits or procedures, are beginning - at least in some markets - to be paid instead for producing outcomes. As physicians and hospital leaders contemplate the implications of new payment models, they realize that the transition will be long, difficult, and messy, with major ramifications for providers. To read more click here.

Limited Choices: Can you get what you need in a government-run health-insurance market? Regina Herzlinger National Review Online

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Virtually all current health-care-reform plans feature a monopoly health-insurance store, operated by federal or state governments, for those who lack employer- or government-sponsored insurance and want to qualify for government subsidies. Advocates claim these monopoly markets will control costs through their purchasing power and enhance price competition by simplifying comparison shopping. When insurers are forced to compete on price, they will prod health-service providers for increased efficiency To read more click here.

Broadening Focus: Spillovers, Complementarities and Specialization in the Hospital Industry Jonathan R Clark, Robert Huckman Harvard Business School Working Paper, No. 09-120, April 2009

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The long-standing argument that focused operations outperform others stands in contrast to claims about the benefits of broader operational scope. The performance benefits of focus are typically attributed to reduced complexity, lower uncertainty, and the development of specialized expertise, while the benefits of greater breadth are linked to the economies of scope achieved by sharing common resources, such as advertising or production capacity, across activities. Within the literature on corporate strategy, this tension between focus and breadth is reconciled by the concept of related diversification (i.e., a firm with multiple operating units, each specializing in distinct but related activities). We consider whether there are similar benefits to related diversification within an operating unit and examine the mechanism that generates these benefits. Using the empirical context of cardiovascular care within hospitals, we first examine the relationship between a hospital's level of specialization in cardiovascular care and the quality of its clinical performance on cardiovascular patients. We find that, on average, focus has a positive effect on quality performance. We then distinguish between positive spillovers and complementarities to examine the following: (1) the extent to which a hospital's specialization in areas related to cardiovascular care directly impacts performance on cardiovascular patients (positive spillovers) and (2) whether the marginal benefit of a hospital's focus in cardiovascular care depends on the degree to which the hospital "co-specializes" in related areas (complementarities). In our setting, we find evidence of such complementarities in specialization. To read more click here.

Are Licensing Markets Local? An Analysis of the Geography of Vertical Licensing Agreements in Bio-Pharmaceuticals. Juan Alcacer, John Cantwell, Michelle Gittelman Presented at NBER's Location of Biopharmaceutical Activity Conference

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As the value chain of the pharmaceutical industry disaggregates, upstream discovery is increasingly carried out by small research-specialized firms while downstream development, testing, and marketing is conducted by global pharmaceutical firms. Licensing plays an important role in this emerging division of labor. Alcácer and his co-authors theorize that, similar to markets for upstream inputs such as scientific knowledge, proximity also may matter for licensing, which they conceptualize as downstream end markets for small biotechnology firms. They examine whether co-location affects the likelihood of vertical licensing transactions between biotechnology firms and global pharmaceutical firms. Discussions with industry executives indicate that large firms search globally for in-licensing opportunities and that licensing transactions should not be sensitive to the geographic locations of the transacting parties. However, an analysis of compounds developed by small biotechnology firms licensed to global pharmaceutical firms suggests that licensing transactions are more likely to occur between firms located in the same geographic area. The results point to the possibility that licensing markets are sensitive to the proximity of the partners and that despite global search processes by multinationals in the pharmaceutical industry, licensing markets are localized. To read more click here.

2008

Care Platforms: A Basic Building Block for Care Delivery Richard Bohmer, David Lawrence Health Affairs 27, no. 5 (September-October 2008).

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Without significant operational reform within the nation's health care delivery organizations, new financing models, payment systems, or structures are unlikely to realize their promise. Adapting insights from high-performing companies in other high-risk, high-cost, science- and technology-based industries, we propose the "care platform" as an organizing framework for internal operations in diversified provider organizations to increase the quality, reliability, and efficiency of care delivery. A care platform organizes "care production" around similar work, rather than organs or specialties; integrates standard and custom care processes; and surrounds them with specifically configured information and business systems. Such organizational designs imply new roles for physicians. To read more click here.

Perspective: Disruptive Innovation In Health Care Delivery: A Framework For Business-Model Innovation Jason Hwang, Clayton Christensen The Policy Journal of the Health Sphere

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Disruptive innovation has brought affordability and convenience to customers in a variety of industries. However, health care remains expensive and inaccessible to many because of the lack of business-model innovation. This paper explains the theory of disruptive innovation and describes how disruptive technologies must be matched with innovative business models. The authors present a framework for categorizing and developing business models in health care, followed by a discussion of some of the reasons why disruptive innovation in health care delivery has been slow. To read more click here.

2007

Does Focus Improve Operational Performance? Lessons from the Management of Clinical Trials Robert Huckman, Darren E Zinner Harvard Business School Working Paper Series, No. 05-073, 2005

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For over three decades, the benefits of focus have been touted under the guiding principle that dedicated attention to a small set of linked tasks improves operating performance. Numerous studies have suggested that the performance of a division, plant, or business unit is improved to the extent that it remains focused on a narrow range of activities. Others have found similar benefits associated with focus at the level of the entire firm. A question that has received less attention, however, is whether focus at the divisional level is complementary with, or a substitute for, focus at the firm level. We explore this question by considering the performance of investigative sites in biopharmaceutical clinical trials. First, we establish that firms focusing on a particular task-at either a divisional or firm level-experience higher output and productivity with respect to that task than unfocused firms. After controlling for selection, scale, and learning effects, we find that sites that focus on conducting clinical trials significantly outperform those that mix trial activity with the provision of traditional patient care. Second, we find evidence that focus at the divisional level and firm level are substitutes. That is, organizations characterized by divisional focus alone achieve statistically similar performance to sites that are characterized by both divisional and firm focus. To read more click here.

How Physicians Can Change the Future of Health Care Michael Porter, Elizabeth Olmsted Teisberg Journal of American Medical Association (JAMA) 2007;297:1103-1111.

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Today's preoccupation with cost shifting and cost reduction undermines physicians and patients. Instead, health care reform must focus on improving health and health care value for patients. We propose a strategy for reform that is market based but physician led. Physician leadership is essential. Improving the value of health care is something only medical teams can do. The right kind of competition-competition to improve results-will drive dramatic improvement. With such positive-sum competition, patients will receive better care, physicians will be rewarded for excellence, and costs will be contained. Physicians can lead this change and return the practice of medicine to its appropriate focus: enabling health and effective care. Three principles should guide this change: (1) the goal is value for patients, (2) medical practice should be organized around medical conditions and care cycles, and (3) results-risk-adjusted outcomes and costs-must be measured. Following these principles, professional satisfaction will increase, and current pressures on physicians will decrease. If physicians fail to lead these changes, they will inevitably face ever-increasing administrative control of medicine. Improving health and health care value for patients is the only real solution. Value-based competition on results provides a path for reform that recognizes the role of health professionals at the heart of the system. To read more click here.

The Rise of In-Store Clinics -- Threat or Opportunity? Richard Bohmer New England Journal of Medicine 356, no. 8: 765-768. (Perspective)

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The recent acquisition by the pharmacy chain CVS of MinuteClinic, a chain of in-store clinics founded in Minnesota, has put this model of primary care delivery back in the spotlight. Although still not widespread, the model is increasing in prevalence and appeals to several stakeholders: payers note that primary care is less expensive when delivered at in-store clinics than when provided in a doctor's office or emergency room, patients value the convenience and low price, entrepreneurs see a profitable business model, and proponents of consumer-driven health care see services that can be paid for out of health savings accounts. To read more click here.