QUESTION 4

Consider the below case of managing a transformational change in a large medical organization. Answer the following Questions:

1. What was the role and contributions of the change leader to make this change happens
2. What lessons can be learned from this case regarding managing organizational change, can these lessons be transformed to other contexts or do they apply only to healthcare?

The Case:

The Setting

This is the story of a corporate turnaround, rescuing the organization from financial disaster and restoring its reputation, competitiveness, and profitability. Based in Boston, Massachusetts, the Beth Israel Deaconess Medical Center (BID) was created in 1996 by the merger of two hospitals. The business case for the 1nerger was that the Larger organization (over 600 bed ) would be better able to compete with, for example, the Massachusetts General Hospital and the Brigham Women's Hospital. The two merged hospitals had different cultures. Beth Israel had a casual management style that encouraged professional autonomy and creativity. Deaconess Hospital was known for its rules-based, top-down management. Staff were loyal to their own organization. After the merger, the Beth Israel culture dominated, and many Deaconess staff, especially nurses, left to join the competition.

The Problems

By 2002, BID was losing $100 million a year and faced ''financial meltdown." There were problems with the quality and safety of care, with low staff morale, and with poor relationships between clinical staff and management. The media attention was damaging BID's reputation.

The Solutions

External management consultants recommended drastic 1neasures to turn around the hospital's finances, and Paul Levy was appointed chief executive officer of BID in 2002. Levy had no healthcare background and little knowledge of hospitals. He felt that gave him an advantage, as he was a "straight talker" and could act as an "honest broker." But staff were skeptical at first.

Levy's turnaround strategy was based on two themes: transparency and commitment to quality. His first action was to share with all staff the full scale of the financial difficulties, to create "'a burning platform," from which escape would only be possible by making radical changes. His second approach was to signal absolute commitment to the continuous improvement of quality, in order to build trust and to establish a sense of common purpose. Levy described his managemnent style:

"Perhaps I had an overly developed sense of confidence, but my management approach is that people want to do well and want to do good and I create an appropriate environment. I trust people. When people make mistakes it isn't incompetence, it's insufficient training or the wrong environment. What I've learned is that my management style can work."

Phase 1: With the hospital "bleeding money," urgent action was necessary. Levy accepted some of the management consultants' recommendations, and several hundred job were lost, in an attempt to restore financial balance. He refused to reduce nursing levels, but the financial crisis was resolved.

Phase 2: Medical staff were tired of poor relationships with management. In 2003, Levy hired Michael Epstein, a doctor, as chief operating officer. Epstein met with each clinical department to win their support for the hospital's nonclinical objectives and to break down silo working. Kathleen Murray, who had joined BID in 2002, was director of performance assessment and regulatory compliance. The hospital had no annual operating plans, and she set out to correct this, starting with two departments that had volunteered to take part in phase 1. Other departments soon joined in. Operating plans had four goals, addressing quality and safety, patient satisfaction, finance, and staff and referrer satisfaction. One aim was to make staff proud of the outcomes and create a sense of achievement. Although the performance of doctors would now be closely monitored, the introduction of operating plans was seen as a major turning point.

Phase 3: To help address the view that medical errors were inevitable, Levy appointed Mark Zeidel as chief of medicine. Zeidel introduced an initiative that cut "central line infection" rates, reducing costs as well as harm to patients and providing the motivation for more improvements. The board of directors were not at first convinced that performance data should be published, but Levy was persuasive, and he put the information on his public blog, which he started in 2006, and which became popular with staff, the public, and the media, with over 10,000 visitors a day. Levy explained:

"The transparency website is the engine of our work. People like to see how they compare with others, they like to see improvements. Transparency i al o important for clinical leaders and our external audience of patients and insurers. We receive encouraging feedback from patients. We've also managed to avoid a major controversy with the media despite our openness. Transparency's major societal and strategic imperative is to provide creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurse and administrators to seek constant improvements in the quality and safety of patient care."

Previously an option, training in quality and safety became mandatory for trainee doctors, who had to take part in improvement projects. The culture was collaborative, and nurses had the respect of doctors. Patients often chose BID for the quality of nursing care. The departmental quality improvement directors met twice a month to share experiences. Department meetings routinely discussed adverse events. A patient care committee fulfilled a statutory requirement for board oversight of quality and safety. The office of decision support collected data on complication rates, infection rates, department-specific quality measures, and financial goals. A senior nurse said: "We felt a sense of ownership with issues of quality. We have dashboards up in the units to see how we are doing. Staff know what the annual operating goals are, as they are actively involved in setting them and integrating them into their work."

The Outcomes

By 2010, BID was one of the leading academic health centers in the United States, with 6,000 employees and state-of-the-art clinical care, research, and teaching. Competing effectively with other major healthcare organizations, BID was generating annual revenue of over $1.2 billion.