Sunday, December 06, 2009

GE's Hospital Consulting Brings Back Memories


Reuters detailed how GE management consultants will drive down health care costs. It gave two examples, operating room start time and bed management systems. Over a decade ago, I worked in two Texas hospitals that improved those very processes. I consulted with ten Georgia hospitals on transformation of management, Dr. Deming's description of his teachings.

I recently visited one of those hospitals. The CEO said we don't do strategic planning or process facilitation anymore. If a manager can't fix it, we fire them and hire someone who can.

During my time as Vice President, that facility hired one leader who made things worse. Through hard work from information systems, nursing, emergency room and housekeeping leadership and staff, we created an innovative bed management system. It leveraged automated phone and paging capabilities to notify housekeeping when a bed was empty and needed cleaning. When finished cleaning, the housekeeper would dial in, press a number and the bed would show as clean and available. The Nurse Supervisor had good, up to date information on hospital wide bed availability. During the busy winter flu season, it dramatically reduced ER admit waiting time. Within a year, a new "quality oriented" DON shut down this tool.

GE's "Neutron Jack" Welch continually threatened the bottom 10% of its workforce with firings. How will that work with nurses, physical therapists and doctors? The flip side of punishment is reward.

President Obama mentions continuous improvement, but they are empty words. He plans on giving providers "pay for performance." We saw how that worked on Wall Street. Most know the final blow up in fall 2008, however there was a twelve year track record of cheating on executive stock option compensation. Surely nurses and physicians can do likewise. Will nearly a third lie, cheat and steal to optimize their incentive pay? How will that distort an already distorted system?

Health reform could be based on Dr. Deming's system of profound knowledge. It's not. As for GE, I can't wait to hear how GE Capital applied Six Sigma.

Update 2-5-11:  Pay for performance and its distorting effects will hit New York public schools.  Only 5% of teachers will be at risk for firing.   Oddly, the system's predictive ability to identify top teachers over time is poor.  As knowledge is prediction, educators look clueless in pushing the system. 

Update 6-3-22:   Former General Electric chief executive Jack Welch takes the blame for much of what's wrong with businesses today.  Bad management theory remains widespread but Welch is getting his due.  

Update 6-5-22:  Welch's firing employees when things were going well was his contribution to selfish, greedy management which got outsized rewards.  His cost cutting ways were imitated by other CEOs and that led to the Boeing 737 Max and other disasters (BP Texas City Refinery explosion and Gulf Oil Spew).  Welchism led to offshoring and economic wastelands in the U.S.  That aided the rise of Donald Trump, who only thought of himself while in the White House.  

Update 6-11-22:   Management followed Jack Welch instead of Dr. W. Edwards Deming and our world is much worse off for it.  Ignorance and selfishness are widespread.  

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