Raising Standards in American Health Care

To thrive in the highly competitive health care marketplace,organizations must consistently demonstrate their ability tocontain costs, improve quality, and increase customer satisfaction.In Raising Standards in American Health Care, nationally acclaimedhealth care management expert V. Clay Sherman shows managers andexecutives how to utilize the powerful management force ofstrategic standardization to overcome the most common barriers tothese challenges-and increase competitive advantage.

"Sherman gives us many embraceable ideas to work with, and hismessage remains solid: our health care organizations must betransformed by standardizing best practices. This is a refreshing,even exciting approach to the very foundation of setting newstandards for health care excellence."--William G. Gonzalez, chiefhealth system officer, Spectrum Health, Grand Rapids, MI; Top 100Hospitals Winner 1994, 1995, 1998; America's Top 100 IntegratedHealth Care Systems Winner 1998 Preface ix

The Author xxi

Prologue xxiii

Part One: The Need to Move to Higher Ground 1

The Rebirth of Health Care Managemet 3

The Strategy-Standards Equation 35

Part Two: Redefining America Health Care Standards 59

Winning with Strategic Standardization 61

Existing Standards Are ot Enough 91

Part Three: Commosese Solutions for Uncommo Performance 133

Moving to McDonaldland 135

Creating a New American Hospital 152

Competing on Knowledge 168

First Feed the Troops 193

Best Practices Make Perfect 215

Part Four: Change Managing the Stadardization Process 247

Defeating the Limits of Chage 249

Transforming Health Care Organizations 270

Epilogue 291

References 293

Appendix A: MANSYS Management System 303

Appendix B: Web Sites Related to Stadardization 305

Index 309

"Sherman gives us many embraceable ideas to work with, and hismessage remains solid: our health care organizations must betransformed by standardizing best practices. This is a refreshing,even exciting approach to the very foundation of setting newstandards for health care excellence." (William G. Gonzalez, chiefhealth system officer, Spectrum Health, Grand Rapids, MI; Top 100Hospitals Winner 1994, 1995, 1998; America's Top 100 IntegratedHealth Care Systems Winner 1998)

"Sherman has once again brought his unique insight and vision toimproving hospital and health care system management in meetingtoday's challenges of delivering quality health care to betterserve patients." (Terry TownsAnd, president and CEO, TheAssociation of Texas Hospitals and Health Care Organizations)

"Sherman is sending America's health care leadership a toughmessage, and it's on target. As an industry we need to do a betterjob for our patients, our physicians, and our associates, andClay's book tells us how. A must read for tomorrow's leader."(Richard R. Risk, president and CEO, Advocate Health Care System,Chicago, IL)

"This book challenged me as it will the entire health careindustry. I found myself applauding Dr. Sherman's insightfulanalyses and practical how-to solutions. Employer coalitions . . .are in a position to . . . raise the standards of management andultimately the care that patients receive." (Gregg O. Lehman,president and CEO, National Business Coalition on Health)

"Raising Standards in American Health Care ranks among the mostchallenging, practical business management books I've ever read.Great ideas are only the start . . . the real benefit comes fromgetting the book off the shelf and using it as a step-by-step guidefor hospital success." (Mark C. Clement, president and CEO, HolyCross Hospital, Chicago, IL, 1998 Global Best Practices Award forCustomer Satisfaction)

"Exciting, visionary, and indisputable." (Audie G. Lewis, author,The Year 2000 Health Care Survival Guide) V. CLAYTON SHERMAN is the chairman of Management House, Inc. in Inverness, Illinois. He is the author of seven health care management books including Creating the New American Hospital (Jossey-Bass, 1993). Many of Sherman's clients have achieved "Top 100 Hospitals" status and have been contAnders for, or the recipients of, numerous awards including AHA's Great Comebacks Award, 3M's Innovations In Healthcare Award, and USA Today's Quality Cup Award. To thrive in the highly competitive health care marketplace, organizations must consistently demonstrate their ability to contain costs, improve quality, and increase customer satisfaction. In Raising Standards in American Health Care, nationally acclaimed health care management expert V. Clay Sherman shows managers and executives how to utilize the powerful management force of strategic standardization to overcome the most common barriers to these challenges-and increase competitive advantage.Raising Standards in American Health Care translates proven Fortune 500 business strategies into pathways toward operational excellence for health care organizations. The book offers a review of the important lessons learned from corporate business giants-including Southwest Airlines, Wal-Mart, McDonald's, and others-who have forged their paths to performance excellence by mastering the art of strategic standardization.Raising Standards in American Health Care draws on the most current developments in modern management practice and theory such as the balanced scorecard, stretch goals, and the focused health care factory. In addition, the book's concepts are enhanced by a wealth of helpful materials including descriptive tables, charts, illustrations, internet information sources, and suggested discussion questions that can be used as a springboard for action. Sherman clearly demonstrates that superior outcomes and competitive advantage can be achieved as organizations aggressively raise the standards of American health care.In this landmark book, Sherman outlines a working model of strategic standardization and offers reliable methods to guide health care leaders in their quest to demonstrate measurable change. In clear terms, the author shows how to achieve standardization of defined clinical protocols, administrative and non-clinical functions, as well as standardization in equipment, procedures, professional practice, and organization performances. This innov To thrive in the highly competitive health care marketplace, organizations must consistently demonstrate their ability to contain costs, improve quality, and increase customer satisfaction. In Raising Standards in American Health Care, nationally acclaimed health care management expert V. Clay Sherman shows managers and executives how to utilize the powerful management force of strategic standardization to overcome the most common barriers to these challenges-and increase competitive advantage.

Raising Standards in American Health Care translates proven Fortune 500 business strategies into pathways toward operational excellence for health care organizations. The book offers a review of the important lessons learned from corporate business giants-including Southwest Airlines, Wal-Mart, McDonald's, and others-who have forged their paths to performance excellence by mastering the art of strategic standardization.

Raising Standards in American Health Care draws on the most current developments in modern management practice and theory such as the balanced scorecard, stretch goals, and the focused health care factory. In addition, the book's concepts are enhanced by a wealth of helpful materials including descriptive tables, charts, illustrations, internet information sources, and suggested discussion questions that can be used as a springboard for action. Sherman clearly demonstrates that superior outcomes and competitive advantage can be achieved as organizations aggressively raise the standards of American health care.

In this landmark book, Sherman outlines a working model of strategic standardization and offers reliable methods to guide health care leaders in their quest to demonstrate measurable change. In clear terms, the author shows how to achieve standardization of defined clinical protocols, administrative and non-clinical functions, as well as standardization in equipment, procedures, professional practice, and organization performances. This innovative organizational model shows leaders how to keep their promise to deliver the highest standards of care far beyond the existing health care performance standards promoted by JCAHO and NCQA-as well as revealing insight into emerging alternative standards that promise to uniformly raise future care levels.

Transform Your Health Care Organization by Changing the Standards That Govern It

"Sherman gives us many embraceable ideas to work with, and his message remains solid: our health care organizations must be transformed by standardizing best practices. This is a refreshing, even exciting approach to the very foundation of setting new standards for health care excellence."—William G. Gonzalez, chief health system officer, Spectrum Health, Grand Rapids, MI; Top 100 Hospitals Winner 1994, 1995, 1998; America's Top 100 Integrated Health Care Systems Winner 1998

"Sherman has once again brought his unique insight and vision to improving hospital and health care system management in meeting today's challenges of delivering quality health care to better serve patients."—Terry Townsend, president and CEO, The Association of Texas Hospitals and Health Care Organizations

"Sherman is sending America's health care leadership a tough message, and it's on target. As an industry we need to do a better job for our patients, our physicians, and our associates, and Clay's book tells us how. A must read for tomorrow's leader."—Richard R. Risk, president and CEO, Advocate Health Care System, Chicago, IL

"This book challenged me as it will the entire health care industry. I found myself applauding Dr. Sherman's insightful analyses and practical how-to solutions. Employer coalitions . . . are in a position to . . . raise the standards of management and ultimately the care that patients receive."—Gregg O. Lehman, president and CEO, National Business Coalition on Health

"Raising Standards in American Health Care ranks among the most challenging, practical business management books I've ever read. Great ideas are only the start . . . the real benefit comes from getting the book off the shelf and using it as a step-by-step guide for hospital success."—Mark C. Clement, president and CEO, Holy Cross Hospital, Chicago, IL, 1998 Global Best Practices Award for Customer Satisfaction

"Exciting, visionary, and indisputable."¾Audie G. Lewis, author, The Year 2000 Health Care Survival Guide