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October 17, 2017
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David W. Johnson Jake Crampton
System Dynamics

Moving at the Speed of Medicine Part II: Taking “Systemness” to the Next Level

Football is a “system” sport. Offense, defense and special teams function as distinct units with their own coaches, schemes and measures of success. The better teams bring all these components together to win. The whole is greater than the sum of the parts.

Winning almost 80% of their games during the last decade, the New England Patriots have been the National Football League’s dominant team. The Green Bay Packers are a distant second at 66%. Since 2002, the Patriots have played in 7 Super Bowl championships and won 5. During this period, no other team has won more than 2.

The Patriots excel at “systemness.” Taciturn coach Bill Belichek foregoes inspirational speeches in favor of one simple motto: “Do Your Job.” His “next man up” philosophy takes hold when injuries remove players from the field.

Belichek’s clear message is that the system is more important than individual players. Team success requires each player to execute their tasks flawlessly. Trusting their system, Patriot players consistently deliver superior results.

Unlike the Patriots, healthcare systems typically aggregate individual transactions without applying systemness to optimize performance. This is changing.

In post-reform healthcare, quality, efficiency and service increasingly define health system success. This requires efficient coordinated systems working across multiple service lines to deliver better outcomes, lower costs and enhanced customer experience.

Solving the Customer’s Total Problem

Becker’s Hospital Review defines healthcare systemness as follows:
“…the desired future state of complex healthcare delivery systems — delivering patient-focused, seamless and high-quality care across the many parts of the system to maximize value for customers….”[1]
When Dr. David Feinberg took over as CEO of UCLA Medical System in 2007, he noted that the organization was ranked one of the most admired in the country and famous for routinely accomplishing some of the world’s most advanced and complex medical treatments. Yet, two out of three patients would not recommend UCLA to a family member or friend.

Seeking the causes of these abysmal patient satisfaction levels, Feinberg discovered it was the so-called “little things” that impeded the perception (and reality) of quality care. Meals and medicines were late. Care providers did not know patients’ names or where they needed to be taken for procedures. Trash littered the hallways.[2]

Customers take threshold attributes for granted until providers fail to deliver on these basic expectations. When that happens, higher order service will not satisfy, let alone delight customers.

Feinberg initiated a sweeping organizational culture change, but this transformation was predicated on making sure those “little things” were now done right every time. This required developing more efficient and effective logistical and customer-service processes and executing them flawlessly.

As the UCLA Medical System example illustrates, systemness is most conspicuous by its absence. For example:

  • When systems fail to function optimally, patients experience poor customer service, frustrating administrative barriers, confusing processes and sub-par outcomes.
  • Sub-optimal systems reduce work quality, increase errors, decrease efficiency and inhibit coordination. Employees undertake heroic efforts to accomplish rudimentary tasks. Complacency and/or frustration take root.
  • Health systems deliver uneven operating and financial results. The company misses performance targets. Quality, employee morale and brand strength suffer.

In contrast, systemness becomes a differentiator through process standardization and reduced performance variation. Processes work predictably, efficiently and in a highly-coordinated fashion. Health systems execute better, meet expectations more reliably and delight customers more often.

Mayo Clinic, ranked America’s #1 overall hospital in 2016-17 by U.S. News & World Report, is renowned for its integrated, multi-specialty group practice approach to medicine. Observers attribute Mayo’s effectiveness in generating consistent high-quality outcomes to its culture, teamwork and salary-based physician incentive structure. The book, Management Lessons from the Mayo Clinic, contends that Mayo achieves its superior performance by operating as a “systems seller.”

Mayo’s operations – from scheduling to EMR and medical imaging to care delivery – are focused on solving “the customer’s total problem.” This integration strategy produces superior efficiency, outcomes and customer experience.

Authors Leonard Barry and Kent Seltman note that the Clinic’s use of systems thinking undergirds a level of service that, “…pleasantly surprises patients (and families) and exceeds their expectations.”[3]

In every industry, the customer is the ultimate arbiter of quality, experience and satisfaction. Exceeding customer expectations requires highly efficient and coordinated internal systems.

The Right Focus

According to a 2015 Advisory Board report, healthcare CEOs recognize the strategic importance of systemness.[4] They ranked the following integration imperatives as both the most challenging and most crucial to success:

  • Clinical standardization
  • System-wide physician alignment
  • IT interoperability
  • Post-merger integration

Interestingly, overcoming these four integration hurdles depends on efficient operations in the areas respondents defined as least challenging and least critical for success. These include supply chain, service line management and centralized back-office support.

Boring functions become sexy when systemness manifests its coordinating prowess. Optimizing these essential but less glamorous functions is essential for achieving superior outcomes consistently, the ultimate measure of an integrated system’s success.

Intra-Company Logistics: Critical to Achieving Systemness

Intra-company logistics is key to building systemness within functions traditionally ranked among the less critical to organizational success. Systemness within these threshold activities is foundational to efficiency and customer satisfaction.

Large health companies deliver tens of thousands of items every day to ever-expanding delivery networks. Medical/surgical supplies, pharmaceuticals, lab specimens, instrument trays, equipment, linens, and documents and reports need to get to the right place at the right time. Errors and delays compromise quality and performance.

Research shows that healthcare companies often fail to appreciate the organizational advantages gained through efficient intra-company delivery systems. They are “penny wise and pound foolish.” They contract for delivery services employing a transactional, commodity mindset. They focus on unit cost rather than total cost. This managerial orientation causes fragmentation, redundancies, errors and added costs.

The field of intra-company logistics is gaining the attention of healthcare CEOs, CFOs and COOs who understand that the most fundamental job of their organization is to make sure that people have what they need, when they need it, in order to do their work.

By consolidating and rationalizing the movements of the wide variety of items a sophisticated healthcare organization needs to operate, intra-company logistics creates a single, streamlined, customized system. Combined with advanced technology, sophisticated intra-company logistics can drive standardization, centralize operations, eliminate fragmentation and redundancies, limit risk and liabilities, reduce down-time, and even reduce overall energy use.

When health companies get intra-company logistics right, systemness improves, efficiencies are achieved, errors are reduced and patients get better service.

The Better Healthcare Way

In a sport where analysts consider “talent” a difference-maker, the New England Patriots consistently out-match rival NFL teams by applying high-caliber systemness. Individual players understand and fulfill their distinct jobs responsibly. All role players must deliver effectively for the team to function at the highest performance levels.

When football teams fail to systematize operations, they lose games. When health systems fail to systematize, care outcomes suffer. A 2016 Johns Hopkins[5] study found medical errors are America’s third-leading killer after heart disease and cancer. Intra-company logistics helps reduce medical errors and save lives. It also eliminates waste, increases quality and improves organizational profitability.

Health systems must develop a managerial mindset that embraces systemness. This requires a clear-eyed focus on fundamentals. When basic health system functions fail to coordinate effectively, overall performance suffers.

Intra-company logistics creates the operational framework that allows championship healthcare organizations to build systemness from the ground up.

Outcomes matter. Customers count. Value rules.


[1] http://www.beckershospitalreview.com/hospital-management-administration/systemness-the-next-frontier-for-integrated-health-delivery.html

[2] https://www.forbes.com/sites/carminegallo/2016/09/29/5-astonishingly-effective-ways-this-healthcare-leader-is-reinventing-the-hospital-experience/#4584462d7a2b

[3] https://www.farnamstreetblog.com/2017/01/under-one-roof-what-can-we-learn-from-the-mayo-clinic/

[4] https://www.advisory.com/-/media/Advisory-com/Thought-Leadership/32211_SM_Q1-Blogazine_web.pdf

[5] https://hub.jhu.edu/2016/05/03/medical-errors-third-leading-cause-of-death/


This is Part 2 in our ongoing series with MedSpeed: “Moving at the Speed of Medicine.”

Developed as a business plan in graduate school by founder Jake Crampton, MedSpeed was launched almost 20 years ago to disrupt the fragmented healthcare transportation marketplace with integrated solutions. MedSpeed’s approach to “intra-company logistics” coordinates the movement of business and clinical supplies across healthcare organizations, turning transportation cost centers into strategic assets that improve efficiency, outcomes and patient experience.

In Part 1, “Turbo-charging Performance with Strategic Partnerships” we look at how health systems can align with strategic partners to deliver superior performance and service. In Part 2, “Taking Systemness to the Next Level” we describe how the best health systems integrate core functions to standardize processes, reduce variation and reach levels of performance that will meet and exceed customer expectations.

About the Authors

David W. Johnson

David Johnson is the CEO of 4sight Health, an advisory company working at the intersection of healthcare strategy, economics, innovation. Johnson is a healthcare thought leader, keynote speaker, and strategic advisor to organizations busting the status-quo to reform our healthcare system. He is the author of Market vs. Medicine: America’s Epic Fight for Better, Affordable Healthcare, and his second book, The Customer Revolution in Healthcare: Delivering Kinder, Smarter, Affordable Care for All (McGraw-Hill 2019). As a speaker, Dave plays the role of rebel, challenger, industry historian, investor and company evaluator to push audiences forward. (Watch bio video.) Johnson applies his 25+ years of investment banking in healthcare to identify ways the healthcare industry must change to deliver better care. He received a Masters in Public Policy from Harvard Kennedy School, an English degree from Colgate University, and served in the African Peace Corp service. Join over 10k+ healthcare executives who read our weekly insights and commentary on www.4sighthealth.com. His third book, Less Healthcare, More Health: The Prescription for a Happier, More Equitable and Productive America, will publish in 2024.

Jake Crampton

Jake Crampton is the founder and CEO of MedSpeed, the market-leading healthcare logistics organization. MedSpeed integrates healthcare organizations through the enterprise-wide movement of physical materials: specimens, pharmaceuticals, supplies and more. It transforms transportation into a strategic asset that more effectively utilizes scale, reduces risk, eliminates redundancies and centralizes services. Mr. Crampton is an avid believer and often speaks about the ways healthcare organizations can achieve systemness through physical integration to better leverage healthcare transportation as a strategic asset.

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