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Many parents will identify with this story: You are sound sleep, your back turned to the edge of the bed.  Suddenly you are awakened with a sense of dread that something really bad is standing beside you.  Something really scary. 

There is that split second of fear when you roll over to confront the danger. Usually it is child standing silently waiting for who knows what. Or, the family dog. Immediately, you are wide awake feeling a little silly that you imagined an evil monster was next to the bed. 

For many hospital CEOs these days, that sense of dread is the Affordable Care Act and its first cousin, Deficit Reduction. For service firms like JohnGSelf Associates that cater to health systems, group practices and other providers, these two issues are the stuff business nightmares are made of.  Every client I have, every client I could want to have, will be affected by these two events.  Hopefully, my company has guessed right with its business strategy.

JohnGSelf Associates is built on a platform that supports a high degree of client-centered service and the ability to quickly innovate to enhance value. We understand that the traditional transactional search model is on its last legs. Clients are demanding lower costs and greater value through more accountability and shared risks.

Recently, I was with a future client, the CEO of a two-hospital system.  His flagship hospital is heavily dependent on Medicare.  He knows that to survive, to have any kind of margin, he will have to reduce his costs below Medicare, a challenging and painful task.  He knows his ability to execute on his strategic plan will require the trust and confidence of his employees, but he also understands that the reductions in Medicare reimbursement will drive the type of uncomfortable change that could threaten the reservoir of trust that he has built with his employees.   As he transitions his organization, this CEO is looking for managers who understand what is happening, who can empower employees and strive to maintain the hope and trust of those who deliver the care.

This CEO understands the challenges and appreciates the risks.  He drives an ongoing full-court press, communicating with his employees, empowering them to help identify ways to deliver care in a safe and more cost-effective manner.  He makes use of web-based communications, including weekly video chats with his employees.  “Transparency will be critical to success,” he explains. “Anyone who thinks they can push this period of change using a command-and-control style of leadership will not make it out the other side.”

He is not alone in his assessment.  There are others raising the alarm that, as an industry, we will undergo transformation, not mere change. However, these CEOs feel they are in the minority.  “Many executives feel that somehow this will just work itself out.” 

It won’t. 

© 2012 John Gregory Self