Making decisions is what management is all about. The higher an individual rises in an organization, the tougher the decisions get—the stakes are higher, there are fewer obvious choices and it’s likely the team is riven by conflict over which choice to make. And the bigger health care organizations become, the harder it is to cultivate effective decision making.

“To be clear, it is not just about strategy but also about execution—who is appointed to lead the charge, whether leaders are given broad latitude or held on a tight leash, how success is defined, and when to make midcourse executional corrections,” said Bill Woodson, senior vice president at Sg2. 

If 2017 is the year to challenge yourself and your organization to make better decisions, consider focusing on the following four dimensions:

Market/tactical decisions. With the 10-year outlook for inpatient volumes at an all-time low, making better decisions about where to pursue growth has never mattered more. The constraints of capital, clinical workforce and management bandwidth require health care leaders to be selective and guided by good data. By drilling deeply enough into clinical programs, zip codes and sites of care, a growth strategy can be devised. 

Three years ago Sg2 introduced the concept of channel strategy—moving beyond physician referrals to embrace all channels that funnel patients into clinical programs and then quantifying the sequence and timing of individual patient journeys. “Rather than relying on educated hunches, data can map and quantify how patients flow (or don’t) through the care continuum—spotlighting the bottlenecks that need opening and the exit doors that need closing,” added Woodson.

Clinical decisions. Hospitals and clinics can always be managed more efficiently and get better prices from suppliers. Opportunities for improvement abound but, in the end, it is clinical decision making that will ultimately make the difference, determining whether health care providers can tame their own runaway cost inflation, at the risk of having more punitive solutions imposed on them. Which test to order, what treatment to recommend, where to refer the patient, how to staff on weekends, when to do nothing at all—these are the decisions (made mostly by physicians) that drive 18 percent of the U.S. economy.

“We are tracking the emergence of some breakthrough opportunities that will help clinicians make better decisions on behalf of their patients and enable health care organizations to achieve more consistency and reliability in clinical decision making," continued Woodson. Some of these opportunities are organizational. “We see an increase in large systems that are effective conveners and funders of local health care delivery networks—providing the clinical leadership, data infrastructure and economic framework needed to drive a common standard of excellence.”

Other opportunities are technological. Application of artificial intelligence and deep learning in diagnostics and clinical decision support will help radiologists pull richer clinical information from a CT scan and pathologists do more with a sample. This is NOT about replacing physician judgment with the blind protocols of a computer. It is about enhancing physician judgment with better information, so physicians can be freed from routine tasks and, instead, focused on complex decision making where they are most needed.

Organizational decisions. The consolidation of the past 15 years has produced health care organizations of impressive scope that have mostly failed, as of yet, to yield improvements in quality or reductions in cost. To be fair, health care organizations built rapidly via acquisition frequently take time to get their executional legs under them. This is made more complex by the fact that health “systems” typically don’t directly employ all the assets they need to drive performance, and more complex still by the largely not-for-profit structures in health care that engender a less-corporate style of decision making.

Still, there are some hopeful signs from large organizations beginning to make tough, often long-deferred, decisions. It has always been known, for example, that three joint replacement programs at a small scale located a few miles apart make little sense and—more to the point—will likely drive uneven clinical results and higher costs. Powerful forces have largely kept organizations from rationalizing services. But this is beginning to change for the better.

Personal decisions. Of course, the root of better tactical, clinical and organizational decisions lies in the personal—how individual leaders make their own decisions. Perhaps the most essential of these is how and where to spend your time: which meetings to attend; which decisions to make personally and which to delegate; how to balance attention between the urgent issue of the moment and long-range concerns.

In recent years, a lot has been learned about how humans make decisions. On the plus side, we are masters at pattern recognition—synthesizing a continuous wash of information to develop theories about how the world around us works. And our skills at pattern recognition just get better with experience. Unfortunately, there is strong evidence that as we age, the pattern-recognition models we’ve built in our heads become more rigid and out-of-date. We’re not just resistant to challenging our ways of thinking, in many respects we are cognitively unable to do so. We need to be cognizant of our growing mental rigidity and tendency toward overconfidence in our own instincts.

“While making better decisions may not always be the right decisions—we can’t control everything in our environment, in which change and uncertainty continue to swirl,” said Woodson. “But we can make better decisions, based on the best analysis and insight available, that have the best odds of paying off.”

For more information about how Sg2 can help you make better, tougher decisions, click here.

Published: February 14, 2017