Is a Hospital also a business?

A Hospital is not a business, or is it?

Everyone would agree that an average Hospital and an average widget factory are worlds apart, but are they? Some would think that I should be placed in an asylum for even asking this question.

Most businesses know that to succeed a good vision, well thought out strategic plan and efficient business processes are needed to succeed. Many hospitals do have a good vision, few have a well thought out strategic plan and even fewer have efficient business processes. The staff of a hospitals, especially Physicians regard themselves as craftsmen rather than workers, they deal with life and death every day, to them business processes only hinder their work. When I consulted for a large hospital I asked some of the staff to describe their processes, on answer I received from an Anesthetist was “I think, I do”. To some extent her view is justified since Physicians and nurses highly customize what they do depending on the patient. In a hospital there are myriads of ‘special cases’ and unlike businesses each case matters and cannot be discarded as an outlier. So one thing is clear, a patient is THE most important component of a hospital, while probably to a widget factory it is the widget.

So now I ask a different question, how can we apply the best practices of the business world to a hospital? The answer is simple by tailoring best practices so that the patient is a central component. Implementing Electronic Health Records is probably the biggest challenge the healthcare industry has every faced. Some of you reading this may remember the 1980s for the uninspired music and John Travolta’s dance moves, but some, especially in the banking industry remember it as the period of transformation. Banks went through tremendous changes, they instituted a clearing house for faster cashing of checks, implemented ATMs and added ‘personal’ to personal banking. They knew the challenges they faced, they knew that they needed to change and they had a planned strategic vision for the future. By having clearing houses clear checks almost instantaneously customers were greatly benefited, but the real beneficiaries were the banks themselves. The Healthcare industry in general and hospitals specifically can take a page from this era for their own EHR implementations; the big difference is that banks exchanged financial transactions whereas healthcare providers will exchange healthcare transactions. The EHR record itself contains a lot more information that a simple check cashing transaction and the bank approach cannot be directly copied, but it could prove to be a good place to start. The point I am trying to make here is not that the banking model is THE model for healthcare but that businesses have gone through many trials and tribulations, why not use the lessons they learned to avoid the same mistakes?

Stay tuned for an article on how the concepts of Corporate Performance Management can be applied to healthcare.