New Marketplace
How AMCs Can Tackle Alignment (10:21)

Academic medical centers (AMCs) are facing a new competitive environment. In response, they’ve had to think more about internal alignment within their own systems, says Jeffrey Balser, President and CEO of Vanderbilt University Medical Center.

AMCs face serious challenges with alignment, however. Balser discusses several of these:

  1. Governance. For example, when physicians are governed separately from hospitals, this presents a challenge for deciding which electronic medical record to use.
  2. Financial complexity. “Not only do we have a myriad of plans to manage, quality measures to manage, and safety metrics to manage, but at the same time people within our own organizations view those goals through different prisms,” says Balser.
  3. Health care reimbursement. We need to be more cost effective — and that demands greater alignment.
  4. Mission alignment. AMCs not only care for patients, but they are also large research enterprises. “At the same time, we have the responsibility to train a large majority of the nation’s health care providers for the next generation,” Balser adds. Physicians at AMCs serve many masters: the patients, the hospital, practice plans, the National Institutes of Health, and medical schools.

So, how do academic medical centers manage all of this?

One framework for increasing alignment in large health systems is to have common goals, but this comes with its own challenges.

Those trained in health care think primarily about the needs of the individual patient, while those trained in business and administration have to consider the health of the whole system that provides care to the patient. “Both groups of people care deeply about the success of the health care delivery system, but they come at the question very differently,” Balser says.

To address conflicts that could arise from these different viewpoints, Vanderbilt created Goal Fest, a shark tank where leaders from all parts of the health system build goals together and report on their progress. One key learning was that some of the biggest challenges had nothing to do with individual failure. “We learned to be comfortable that most of these are system problems,” Balser explains, “and if we work as a team we can solve them together.”

The success of Goal Fest led to the creation of Leadership Assembly, a larger gathering of managers, with “white coats and blue suits all in the room together.” “We really want to share good news and bad news all the time because that gives us legitimacy,” says Balser.

“A nice metaphor for health care is to think about a car driving down the highway. When the front end is out of alignment it’s not such a big deal when you’re going slow,” says Balser. “But when you’re moving at top speed like health care is today and your alignment’s not good, it’s a problem. Alignment is the key to success.”

From the NEJM Catalyst event New Risk, New Business Models held in Boston, October 6, 2016.

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