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If you are a senior leader in healthcare, I have two pieces of advice for you, do not get too comfortable with the status quo, and do not overreact by preaching daily or weekly “the sky is falling” sermons to your staff, physicians, or anyone else who will listen, regarding the horrible effects of the Affordable Care Act and deficit reduction.

Yes, the train is on the tracks and, yes, it is going to be a lot better being on the train than on the tracks, but it is hard to scare people to get on board before they figure out how all of this will affect them.  Today, you have time to educate them, plan with them, and build consensus as to why riding in the train will be better than getting run over by government and the market forces of increased regulation and reduced reimbursement. 

Trout Creek

The truth is no one knows how this will play out, least of all the people in Washington.  All we know for sure is that once the train picks up speed, there will be no stopping it.  When that happens, how quickly you can move to adapt, how agile you are to embrace innovation, will depend on whether your organization survives. 

 

Getting people to become train lovers is the first priority.

While it is OK not to know exactly what is going to happen, it is not OK to have no detailed plan of how your organization is going to respond to the certainties we do know about: the always popular Washington response of increased regulation and lower reimbursement.  In times of economic crisis, some of the most serious leadership mistakes are made in the rush to respond to some major development.  The most common misstep is to cut too many of, or the wrong employees in a panic to reduce expenses.  This is typically a revenue killer. 

More importantly, while expense reduction, including layoffs, will probably be in the mix to meet the financial challenges, very few survivors have ever cut their way to sustainable profitability.  When the fires are raging, it is difficult to re-imagine the redesign of clinical and operation processes or economic incentives without making huge mistakes.  The time for that type of strategic response is actually now. 

People, especially healthcare people, do not like change.  Oh, some say they do, but if true, they are in the decided minority.  Every crisis/turnaround executive will tell you that the hardest thing in the world to accomplish is to convince people that change is good, and change is necessary, all the while whipping them to move faster to implement the very change necessary to survive.