LEDI 64 | Healthcare

Every health system leader has unprecedented executive management challenges facing their organization in the wake of the pandemic.

On this episode of “Leader Dialogue Radio“, the President at The Beckham Company, J. Daniel Beckham shares how change has changed and why healthcare companies need to adapt to the post-COVID world.

Three key observations:

  1. Change has changed. It requires a new leadership mindset prepared for frequent and disruptive crises. COVID has demanded that kind of mindset and is preparing leaders for the future.
  2. COVID has upended the status-quo, opening the way for fundamental transformation, restored purpose, and trust. Healthcare is broken because of fragmentation, the inability of caregivers to do work they regard as meaningful, and a lack of trust between medicine and management.
  3. The delivery of healthcare is moving from concentrated to distributed. In the past, healthcare delivery has been concentrated on hospital campuses. It is moving towards care delivered by a variety of providers widely distributed geographically. “Megabrand Assemblers” and their platforms will become essential hubs of value in healthcare. Amazon is a Megabrand Assembler with designs on healthcare. Mayo is positioning itself to be a Megabrand Assembler. The core competence of Megabrand Assembler in healthcare will be connecting consumers with the care they need, when they need it and where they need it.

Listen to the podcast here

Healthcare On Fire: A COVID Chronicle With J. Daniel Beckham

Welcome to another episode brought to you by the Baldrige Foundation in collaboration with our sponsor, ABOUT Healthcare. It is going to be a great one. You know my colleagues, Ben Sawyer and Dr. Darin Vercillo from ABOUT Healthcare. Darin is the Cofounder of ABOUT Healthcare. Ben is the Vice President of Market Development. We have a good friend of mine, J. Daniel Beckham. He is the Founder and President of the Beckham Company.

I have known Dan for many years and appreciated his wisdom. He is a healthcare strategist consultant. He has helped me in the healthcare systems I have worked with over the years. He has worked with all the major health systems across the country. He is a brilliant researcher and writer. I got a copy of his monograph or paper. It is a long article or a short book. It’s one of the two but it is brilliant. It is about Healthcare on Fire. It is a chronicle about COVID. You are going to want a copy of this. We will make sure that you have that available to you.

Let’s get right to it and talk about some important topics that you can take and implement in your organization as healthcare leaders. Not be victims, but implement some of these things and get around and be trendsetters in this crazy time that we are in. Dan Beckham, welcome to the show. We are so glad that you are taking the time to talk with us.

I appreciate the opportunity to talk to you again, Roger, and the rest of the team there.

We have got so much that we could talk about in your monograph here. We want to focus on some areas. First of all, the whole world is talking about how healthcare is in trouble. There are some financial issues that healthcare is dealing with. There are definitely a lot of workforce issues that have been created by COVID. Leadership has to deal with this and figure out how to staff properly and how to manage attitudes and engagement of their workforce. Healthcare is not new to change. Change has been with us forever. In your monograph, you said something that I found very interesting. You said, “Change has changed.” Could you talk a little bit about what you mean by that?

We are living in a world beyond prediction where devastating surprises occur with growing frequency. Share on X

Let me start with a metaphor that has often been used to describe how change overcomes organizations, and it involves a boiled frog. The suggestion has been that if you take a frog and put it into a pot of cold water and put that pot on the stove, and then gradually turn the heat up, the frog is not going to try to jump out of there. It is going to roll over on its back and relax. Eventually, you end up with a cooked frog.

People used to say that that is the way change overcomes organizations, but I think change has changed. A better metaphor is to think about taking that frog and putting it into an open casserole dish, turning the microwave on to high, shoving that dish into the microwave, and then letting it run for 4 or 5 minutes. Organizations are much more likely to explode and splatter than they are to just roll over and die.

Change has changed. It is much more unpredictable. It is moving faster. We used to think that we live in a world of tidy bell-shaped curves where even complex events surrender to data-rich forecasts. I think we are living in a world that Nassim Taleb describes as an extremist hand. It is a world beyond prediction where devastating surprises occur with growing frequency. He called those Black Swans. Examples include The Great Depression, 9/11, the dot-com bubble, Chernobyl, and COVID fits into that.

Change is moving a lot faster and with a much lower level of predictability. Pandemics used to be a lot slower. The Black Death got to Sicily in 1347. It took it two years to move across France and then another year to get to Russia. With COVID, it was worldwide in about three months. What is driving the change in change is an explosion in information and connections. Both information and connections are interrelated.

There is a growing flood of information. I think we all experienced that. That is giving rise to more connections. More connections are giving rise to more information. It goes around in a cycle that way. An explosion of both information and connections, I would suggest, is creating a volatile stew of transformative change. Some of that change is a force for good. In some instances, it is a source of rapidly widening waves of destruction.

LEDI 64 | Healthcare
Healthcare: Change has always happened, but when change hit you, you would turn to alternative resources to adapt. Those same resources are not all available today. So the world is becoming more flexible and adaptable.

I want to stop and talk about the forces for good because not too many people are talking about that. Dr. Vercillo, you are not only the cofounder of ABOUT Healthcare, but you are also a hospitalist. You are practicing in the Salt Lake City area. I am old enough to remember when hospitals were the thing. Ben told me that you are a nocturnist, so I am not sure when you sleep. Dan was talking about how information and connections have allowed for new forms of providers in healthcare. Could you talk a little bit about that, what you do on a daily basis, and how this whole notion of information and connections allows you to do what you do?

Dan, thank you for that description and lead-in that you gave. I have my own analogy but it is not going to live up to boiling frogs or the Black Death. It is interesting. I went down to San Diego to see my son at a soccer tournament. As we were landing at Long Beach Airport, we flew over the Harbor and there were hundreds of those big cargo ships parked out in the harbor there. My wife points down. She said, “Look, there is our bedroom furniture down there.” I was in church and turned to a guy behind me who I know who had renovated his house and asked him how the whole thing went. This has been a two-year-long project for him because of the pandemic.

He says, “It is almost done except for the countertops, which just were delivered off of a cargo ship from Long Beach Harbor.” I said, “Were you ever tempted to go rent a boat, jump out there, and go knock on the side of the ship and say, “Can you give me my countertops?” This is what I have seen at least in my practice and in the work that we do across the country. Hospitals are struggling with the rate of change and adapting to it. Many different things have changed simultaneously. Before, if you were trying to get your countertops done and somebody could not deliver, you just go find another vendor and say, “Can you give me what I need?” Get that delivered to you and get your problem taken care of.

I am seeing the same thing in the world of healthcare. Change has always happened, but when change hit you, you would turn to alternative resources to adapt. There are not a whole lot of those same resources that are available. The world has become much more flexible and adaptable. To your question with regard to what is being tapped into and the information that is being used, I would say it is not only a network of information, but it is a network of available resources across much broader areas. As a nocturnist or as a hospitalist at night, which by the way, when we are taping these things during the day, I look forward to being at the hospital in the evening, I was sitting at an ER at 2:00 in the morning when a transfer has to happen from that ER because there are no beds available in our hospital.

We start looking around at the 10 or 12 hospitals in what we would consider to be the normal area that we would send a patient to if we did not have the capacity, which did not use to happen very often. Now it is a daily and nightly occurrence. We are transferring people 500 miles away to find an ICU bed. You talk about the network of information that needs to be present of understanding where your next move is because you do not have enough nurses in your hospital to staff more than 50% to 60% of your beds. Nobody else does either. What was the previous resource we would turn to? We would go to staffing pools, but those are all tapped out.

Organizations today are much more likely to explode and splatter than they are to just roll over and die. Share on X

Change has changed. I absolutely agree with Dan. It has hit us like a ton of bricks. A freight train coming at us at 300 miles an hour, yet where we normally would have adapted and turned to a pool of resources that were ready and willing even at a higher cost to perhaps resolve those situations for us, those are not available, so we have to get real creative. That is driving some very important and very valuable changes for the future to connect organizations across traditional boundaries, breaking open silos, and getting people to think about their better capabilities collectively for patients and working together.

I want to help us strike this balance. I am not a huge fan of COVID or plagues, but there are good things that come out of situations like this. We are forced to adapt and you have a choice. You are either going to adapt and get better, or you are going to be a victim and suffer and go out of business, which many businesses have done. Healthcare and hospitals do go out of business, but it is a long, slow, ugly death. Systems change over time, but we do not have many options. Our health systems have to serve our patients and our community. We are forced to do it in different ways and more creative ways. This has accelerated. COVID has accelerated the adaptation of new ways of doing things. It has been exciting.

Prior to this, it was difficult to convince providers and some consumers that telemedicine was a viable thing. That has completely changed, hasn’t it? Let’s strike this balance between the pluses and minuses of COVID and this pandemic. Dan, back to you, you talk in your paper about the status quo has completely changed for healthcare and that healthcare has been fragmented and broken. Darin talked about caregivers. We do not have enough caregivers. We have had to do things differently. There is a lack of trust between medicine and management. How do we deal with that? How do we approach that and focus on that very important resource, which is the employee?

I would like to first empathize with Darin and his countertops. In a way, I think the supply chain is an unfortunate metaphor because it brings to mind a chain. A chain is comprised of links. If you end up with one broken link in the chain, everything downstream is going to end up compromised. A better metaphor for supply is a network. Networks are comprised of nodes. They have tended to be resilient because there is a lot of redundancy built into networks. It is naturally built into a network. What COVID has done is even overwhelmed the supply network.

Darin talked about defaulting to other options and alternatives. Roger, you referred to that as well. You look at the backup in Long Beach and you say, “I will bring it in through San Francisco.” There are twenty container ships stacked up in San Francisco. You say, “I will bring it in through Savannah.” There are fifteen container ships stacked up in Savannah. You have got all the backups associated with what happens once you offload it at the port. There is nobody there to do that work. The truckers are not necessarily available or the trains are not available.

LEDI 64 | Healthcare
Healthcare: As a leader, when dealing with problems, you need to be able to take essential ingredients and make them more efficient. Can you use technology to enable that? Can you integrate data and analytics into that?

I have heard that there are 80,000 truck driver jobs that are unfilled. It is not just the backup in the harbor. It’s where you put this stuff.

My wonderful administrative assistant, her son went to the University of Florida and got a degree in art. The guy is a very accomplished artist and photographer. What is he doing now? He is learning to drive semi-trucks. You have to look at the world very pragmatically and say, “Where are the opportunities?” There are some outstanding opportunities there. That all leads to further fragmentation and challenges. To question to some extent is, “What do leaders do when faced with this kind of change and challenges?”

One of the things that are important is to focus on the controllable. There is so much that is out of control. You can be like Don Quixote and flail at the windmills as much as you want, but you are not going to control some of this. Norman Maclean wrote a wonderful book, A River Runs Through It, but he also wrote Young Men and Fire. It is a story of the 1949 fire in Mann Gulch in Western Montana that killed thirteen smokejumpers. Maclean identified five things that set the stage for that disaster. Three of those were beyond human control.

They were facing very steep terrain in a way that encouraged the flow of the fire up the side of the mountain. It has increased the speed of spread to the point that the firefighters could not outrun it. The second thing which was a real issue was fuel for the fire. They were in knee-high flammable cheatgrass. Part of that problem there was that there have been efforts to preserve the cheatgrass and not cut it. It was very flammable. The third was the weather. It was hot, dry and windy, but two of the factors were controllable. One was communication, but the radio was destroyed when it was parachuted down. Compounding that, the crews spread out. They lost contact with each other.

The fifth, and I suggest was the most important of the two controllables, was the leadership. The foreman did not know his men. He was not able and did not have the time and the opportunity to build trust and rapport with those guys. As the fire progressed, he set a fire around himself and his crew ran past him. He told them to lay down in a circle with him. They did not know him. They did not trust him so they kept running and they died. A key, when faced with this kind of change, is how do we focus, particularly leaders, on the controllables and make sure that we have got the organizations focused on those things.

When faced with change, as a leader, you need to focus on your controllables. Share on X

I remember that story from years ago. It is a great reminder. It is easy to circle the porcelain here and wring our hands and say, “Woe is me.” I think it seems to me, Ben and Darin, I do not know if you have seen this in your experiences and talking with health systems. There was a period of time when people are in shock and bounced from one crisis to the next. They have not had the luxury of time to be objective about it and to say, “What should we do next?” I do not know if you guys have any thoughts about what you have seen or if that is absolutely the case.

I think Dan’s example is a good one in that we have known for a long time that in processes, there is about 40% waste. That is an opportunity to take that waste out to create margins. In the COVID crisis, staffing is in flux. There is a lot of contract labor. There is no redundancy in labor and people are stressed by poor operational systems and processes. One of the things that leaders can look at is if we have that problem, how can we take the essential ingredients? In other words, “We have a process. Can we make that more efficient? Can we use technology to enable that? Can we integrate data and analytics into that?” To Dan’s point about communication, everyone that was involved in that process has much quicker clarification as to what is going on.

In this “gig economy,” is there a way to be able to concentrate resources in areas of high demand and expertise like transfer centers, ICUs, ORs or whatever the case may be, where you have those four threads combined? You have process optimization with technology enablement, data and analytics, and people that know how to do that to help come in and augment what the hospital is trying to do so you are creating some level of capacity.

We have not necessarily had to look at that so intensely prior because we had some redundancy. It’s like those nodes of the network that Dan has talked about, but redundancy is gone. You have to look at it in a different way and say, “Where can we leverage opportunities to build margin back in so that people are not so stressed in their operational systems and processes?” We take full advantage of good partnerships where their expertise and capability can augment what we do.

I neglected to mention that Ben is a black belt and he is a process improvement ninja. You’ve spoken like a true black belt. Thank you, Ben, for that reminder. Those are some things that we can control and we must control. We do not have the luxury of ignoring it or saying, “It would be nice if we had time to improve our processes.” It is a requirement. You cannot not do it. You cannot ignore it. Thanks for that. In the remaining time we have left, it seems to me like this conversation will end prematurely if we do not say that maybe next time we can do this again.

LEDI 64 | Healthcare
Young Men And Fire

Dan, if you are available. We can speak some more with you about your paper and some of the insights that you have gleaned. In the remaining minutes that we have, one of the things that you talk about and we owe it to our readers, what does the future look like from your perspective? You mentioned in the paper that healthcare is moving from concentrated to distributed. Tell us about that.

Historically, healthcare has been delivered on hospital campuses and what is happening, and I think COVID is certainly a catalyst for this, is there has been an explosion of new competitors, folks who are able to deliver care remotely to a great extent because of technology. Physician specialists, in particular, are consolidating, especially physicians. Most of the consolidation that took place with physicians initially was with primary care physicians and it was funded by hospitals. They ended up owning the preponderance of primary care physician practices in the country. That let the specialist out in the cold. They are consolidating. You have got orthopedic groups in the south that are 150 orthopods. These are not just loose networks. These are consolidated organizations.

Those folks are getting capital. The outside investors, none of them are buying hospitals. The only people who are buying hospitals are the hospitals. That set up a red flag for folks. The only folks in the market to buy a hospital is another hospital. Why aren’t the venture capitalists interested in this? They are pumping money towards these new consolidated specialty groups, big orthopedic groups and big cardiology groups. It used to be that those groups had to turn to the hospital for capital. That is not the case anymore. Stryker installed 100 robots in ambulatory surgery centers in the last quarter of 2020.

They helped fund that installation. The physicians did not have to turn to hospitals for capital. That is part of this whole notion of going from concentrated to distributed. The Amazons of the world are further distributing things and positioning themselves at the interface between buyers and sellers and facilitating that whole process and adding value there.

Those are great insights.  We have to pay attention to these things and any system that is not paying attention to it and sees themselves as part of a system. You talk in your paper about these mega-brand assemblers. Any system that views themselves as anything other than trying to assemble all of these in ways of continuing to meet the needs of their patients and their populations without being a little bit innovative and creative is a real danger and a risk to healthcare’s long-term success if we push back on innovation. We have to embrace innovation and openness to new things. Dan, thank you. We have got so much more that we could be talking about and hopefully, we can do this again very soon and talk more about your piece. It is called Healthcare on Fire: A COVID Chronicle by J. Daniel Beckham.

You can get it. You can get a copy of that and download it from the Leader Dialogue website. I hope you do. I look at this and I think, “If I were still running a health system, I would use this as the basis of a retreat either for my board, my leadership team or somebody,” because it raises so many great questions and has so many great observations about what we are seeing around us. You can download that. I hope you will. Ben, in the remaining two minutes that we have, we have some webinars coming up. Can you talk about those?

The show has given a limited timeframe to discuss these. We are kicking off a three-part webinar series together. We are going to be talking about burnout in that one, which ties very closely to what we have been talking about here. We are going to be talking about what is next, which very much is launching from this conversation. Next, the topic will be operating as one or systemness. These three topics came out of surveys that we have done with executives in collaboration with the Health Management Academy and those two items, workforce stresses and operating as one, were the top trending topics. That is coming up next.

Thank you so much, Ben. You have been tuning in on our conversation with Dan Beckham, Healthcare on Fire: A COVID Chronicle. As usual, we have got great insights and questions from Darin Vercillo and Ben Sawyer. Thank you so much for joining us. Please go to our website and get a hold of these resources. Find out about the webinars that Ben was talking about. We always welcome your comments and your recommendations for this show. We want to help you be better leaders and get ahead of some of these problems. That is it for us. Have a great day. We will talk to you later.

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