In Search of the Health Care Management Secret Sauce

Article · October 20, 2017

Watch Tom’s talk above on lessons learned in creating sustained change as a health care leader.


Any physician leader has memories that cause them to cringe, of doing things they hoped would work out but did not, and of learning lessons the hard way. For NEJM Catalyst Leadership Board Founder Tom Lee, one of those embarrassing memories is of a time “when I really did think that being a good leader meant giving a great speech,” he says. He recalls how at Partners HealthCare in Boston one night in 1996, at the last big meeting of medical leadership before Partners embarked on its first big capitated contract with a major HMO, he showed a film clip from Henry V.

“[As Chief Medical Officer] I thought that my job was to rally the troops, to help them see that what we are trying to do was important, and that in fact, it was something great and noble, something we could be proud of for all time if we did a good job.” To make that point, he showed his colleagues a clip of Henry V giving the St. Crispin’s Day speech, and then gave everyone sweatshirts quoting the speech.

Everyone left the meeting full of confidence, says Lee. But, “in retrospect, I would say we were probably better prepared to fight the French army than to actually manage care for a population.” When the first data came in, they were losing $1 million a month. “That was how I learned that a speech is just a speech and that goosebumps fade, and that you need to do something more if you’re going to create sustained change.”

After that, Lee’s “next phase” as a physician leader was financial incentives. He describes the two big takeaways from prospect theory:

  • Proportion matters. If someone gives you $100, you’re happy, but if someone gives you $200, you’re happier — but you’re not twice as happy.
  • People value losses differently from gains. If someone gives you $100, you’re probably not going to call home about it, but if you lose $100, you’ll be in a bad mood for the rest of the day.

“The message that my colleagues and I extracted from prospect theory is that the sweet spot, where you get the most return on your incentive dollar, was close to zero and to the left of zero, multiple small packets of incentives that were framed as potential losses,” explains Lee. For a time, their fund flow was influenced heavily by prospect theory.

The current phase is surrounding physicians with systems. “While they work hard doing their good work, we implement electronic medical records with decision support to help them be better and more efficient and safer,” he explains. They also place high-risk care managers, population health managers, and variation analyses for physician performance comparison.

“None of these individually has been enough; collectively, they haven’t been enough to change performance to meet the market’s needs for better quality and safety,” admits Lee.

Lee points out two lessons he’s learned the hard way:

  • If you layer new systems on top of the same old care delivery system, those new systems won’t change much. “The hard work, the brutal work of departing from the past and actually organizing care around what patients actually need — not much can really happen until that challenge is taken on by leadership,” says Lee.
  • The health care business is complicated, and people are complicated. “The idea that any one single thing will be enough is wrong.”

Lee describes Max Weber’s four models for social action: tradition, self-interest, affection, and shared purpose. To illustrate these models, he notes how the Mayo Clinic has a social norm of answering beepers immediately — and if you don’t, you don’t fit in. Other examples include the University of Utah’s policy of transparency with all patient experience comments, a non-financial affection incentive, and the Cleveland Clinic’s creation of shared purpose via its empathy video. “You need them all,” says Lee. “You need to create that shared purpose and then you need to be ready to press these individual levers as well.”

“There is no single silver bullet, but I think that collectively these could be a secret sauce if we’re applying them toward work worth doing, which is meeting the needs of patients,” says Lee. “And if we can do that, then, someday, maybe we get to be Henry V and give the St. Crispin’s Day speech.”

From the NEJM Catalyst event Physicians Leading | Leading Physicians at Intermountain Healthcare, July 12, 2017.

New Call for Submissions ­to NEJM Catalyst


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

More From Leadership

Wanted: Talented, Energetic, Creative People to Work on Difficult, Boring Problems. No Perks.

Let’s admit the inconvenient, boring truth.

Physician Coaching: Clinicians Helping Clinicians on the Things That Matter Most

A physician coach reflects on who gets better, what works, and how to create a learning culture.

Brent James Health Care Leaders Talk Still: Clinical Infrastructure Eats Culture for Lunch

Infrastructure Eats Culture for Lunch

The infrastructure that leaders create lasts far longer, and with farther reaching implications, than anything else they do.

Jessica Dudley and Namita Mohta head shots

Professional Fulfillment: Where We Want to Be

How the CMO of Brigham and Women’s Physicians Organization combats burnout at her institution and empowers physicians with leadership skills.

Gary Kaplan Health Care Leadership Talk Still: We Change or We Die

“We Change, or We Die”

Nothing is more important than how we can get better every single day to better serve our patients, says the CEO of Virginia Mason Health System.

Physicians Are Facing a Crisis

The CEO of Atrius Health offers suggestions on how to make sure young physicians — who will be caring for us when we’re older — battle burnout.

Texas Medical Center Houston Methodist Checklist to Maintain Operations During Hurricane Harvey and Future Flood Events

Lessons in Leadership: How the World’s Largest Medical Center Braced for Hurricane Harvey

Due to learnings from previous hurricanes, five success factors kept the Texas Medical Center operational during one of the worst natural disasters in recent U.S. history.

Lessons in Leadership: How the BayCare Health System Withstood Hurricane Irma

BayCare’s extensive disaster preparations were crucial in weathering the storm.

The VA Is a Quality Leader, Contrary to Many People’s Assumptions

A defense of the Veterans Health Administration, from its former Acting Under Secretary.

Medicine Is Not Manufacturing

Treating medicine as just another business is to deny its soul, the essential element that has given patients comfort and relief for thousands of years.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Repeal, Replace, Repair, Retreat — Republicans’…

Republicans’ Senate misadventures with the Affordable Care Act offer a powerful reminder about the limits…

Leading Transformation

164 Articles

Infrastructure Eats Culture for Lunch

The infrastructure that leaders create lasts far longer, and with farther reaching implications, than anything…

Leading Teams

114 Articles

Wanted: Talented, Energetic, Creative People to…

Let’s admit the inconvenient, boring truth.

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now