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    September 2012
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    Hotrods, Lear Jets and Hospitals

    Don Shaughnessy

    By: Don Shaughnessy

    What do drag race cars, Lear Jets, and potentially hospitals, have in common?

    If you ask hotrod drivers what is the most important thing, they will say, “Go fast in a straight line.”  Every other choice for vehicle construction is made inferior to that.  Comfort is not even considered to be a worthy thought.

    Before developing the Lear Jet in the ‘60’s, William Lear observed something interesting.  After two hours in the air, passengers most valued “getting there.”  So, he built a hotrod executive jet.  It was not luxurious, because luxury was merely a convenience.  He focused only on the customers’ principal value – getting there sooner.  His jet was the fastest and it was the cheapest both to buy and to operate.

    Focus on a single purpose may simplify healthcare issues.  Why???

    Hospitals have a basic problem.  Value decisions get weird when the user of the service (patient) and the people who pay the bill (governments) are disconnected.  Users of the service, who have access to cost numbers, are the only ones who can objectively judge value.  Everyone else uses a proxy of some kind.

    Without the bill, patients employ an unpredictable proxy.  Service will be seen as “good value” if staff is friendly and instantly available, or the many (maybe unneeded) tests are done quickly and effortlessly, or there is a comfortable bed in a cheery, quiet room, or the food is acceptable, and visitors are welcomed.  Probably some combination of these with unknown, or worse ever-changing, weighting of the parts.

    Administrators use other proxies for value.  1) Not too much complaint from the patients, 2) Achieve budgets, and 3) Hit target wait times.

    No one is doing wrong.  Boards act in the best interest of the user, while administrators act to satisfy the bill payer (government.)  Nurses, doctors and other staff try to satisfy both – a perpetually failing proposition.  All act in good faith and do as well as possible within the parameters of their jobs.  They just don’t see the same purpose.

    When we see that the values of the various stakeholders are not consistent, we know the strategic vision is incomplete or wrong.

    Just as with hotrods and Lear Jets, the users of the service (patients) need to answer a question.  “What do you value most?”  In a hospital, the likely answer is, “Nothing is better than getting better.”

    Hospital administrators would do well to focus on that single important thing and address less attention to resource consuming conveniences that minimize complaints.  As an example, it is unacceptable to accept an increase in the number of c-difficile cases that result from reducing maintenance costs to balance the budget.

    In the end, focusing on the important value makes patients happier and costs less.

     

    Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.  don.s@protectorsgroup.com

    The MONEY® Network