Why Leadership Is More Important in Healthcare than in Other Industries (And Why It Shouldn’t Be)

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In a lecture I heard by Rulon Stacey, American College of Healthcare Executives chairman, he said that health systems are the most complex organizations devised by man. Yes, it may be true. (Think: doctor relations, dealing with mounds of existing regulation and changing regulation, uncertain revenue streams, constantly changing technologies, complex patients, complex care processes, dealing with a science that is still more of an art, thousands of patient pathways, trying to manage the care process, lives on the line, board/corporate relations, media relations. . . .)

And all that would make leadership really important in healthcare, but that’s not why I’m convinced leadership is so much more important to earning a world-class reputation in healthcare. No, I think it’s because, to become world class, you have to have the courage, vision, and charisma to go against financial incentives and do what’s right (i.e., always choose what’s best for patients, even when you know you will lose revenue for doing so). Oh, and while fighting the good fight, you have to convince the rest of your employees to put the future of their jobs on the line by joining with you. In a world where people more and more take care of themselves first, this is an incredible task.

I saw this quest in nearly every session I attended at the recent IHI National Forum–good people trying to make care better for patients, even when it leads to reduced profits.

But it shouldn’t be like this. Why shouldn’t doing what’s best for the patient be the same thing as doing what’s best for your profits?

This misalignment is what leads many people to be cynical about profit motives in healthcare, asserting that there should instead be no profit motives in healthcare. I disagree. Align financial incentives and unleash all the creativity and ingenuity the good people of this industry have to offer in innovating in ways that improve the value of care for patients. How else are we going to make care affordable enough to offer it to every citizen without making our country go bankrupt?