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Good Management = Good Clinical Outcomes (06:52)

MD/MBA students come to business school motivated to learn — they want to know about management, says Raffaella Sadun, the Thomas S. Murphy Associate Professor of Business Administration at Harvard Business School. “They’ve seen quite bad management before coming to the MBA, so they know the reality well.”

It’s not that these students come from bad institutions. “What’s happening is that the adoption of good management is very uneven in health care,” says Sadun. “And there are pockets of excellence. But there are also places that are lacking in terms of basic management practices.”

Over the past decade, Sadun and her colleagues at MIT and Stanford have measured the adoption of basic management practices — what they call core management practices — in acute care hospitals across nine different countries, including the United States. Their methodology “looks for the adoption of basic processes you would expect organizations to adopt when they’re well run,” she says. For example, are decisions made on the basis of data or gut feelings? Does the organization have a systematic way to expose problems and fix them? Are employees promoted on the basis of talent or tenure?

Sadun’s group interviews managers in the middle of their organizations, typically department chairs or nurse managers. They ask about 20 questions that are quantifiable on a scale of one to five, where five indicates an adopted process and one indicates no process. The managers are not aware they are being scored during the interview.

“There is a massive variation in the quality of management practices across hospitals. And this is true everywhere you look at, even the U.S.,” she says.

“What we see over and over with the data, we know that places that have higher levels of this management score tend to have lower mortality rates, tend to have lower infection rates, over a host of metrics that we’ve considered,” explains Sadun.

Clearly, management is important. So how do we close the massive adoption gap? Sadun first proposes increased awareness. “When we run these interviews, we ask the managers to self-score, and we ask them on a scale from 1 to 10, how well managed do you think your department is? And guess what? They rate themselves, everybody is above a seven, everybody is above average.” She encourages health care leaders to start measuring how things are done to help erase that lack of self-awareness.

Sadun’s second proposal: clinician training. Research shows that only 0.71% of physicians are MD/MBAs, according to Sadun, and those MD/MBAs typically do not return to clinical work. “It’s important to embed more managerial training in the way clinicians are trained. That can really make a difference,” she says. This is just a starting point, and basic training doesn’t have to focus on the financial aspects of management — it can focus on structuring human interactions.

“I know this is hard. And I know that management is not going to be the silver bullet, the management training, or the awareness. But I do believe that if you start from the basics, and if you start thinking about behavior change as a change in processes, you can build at least a common language over which initiatives that are built from the top are perceived as something feasible and doable by the physicians,” says Sadun. “Maybe that’s the opportunity where you go from something that is imposed from the top to something that the physicians embrace, that they can take ownership of, they can maybe manage, they can lead well.”

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

This talk originally appeared in NEJM Catalyst on October 13, 2017.

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