Sound investment or money down the drain?
KPMG’s experience from working with healthcare providers and payers in more than 40 countries is that a typical organization can become around 15 percent more efficient purely through operational, administrative and workforce improvements.1 Scaled up to a global level, this suggests that the prize of better managed healthcare services may be in the order of one trillion dollars. For such a potential payback, it is a wonder that so little research has been done on the impact of different attempts to improve leadership and management on organizations’ quality, efficiency and outcomes. Investing in managers and leaders is a key part of achieving these improvements. Our systematic review identified four areas where returns are clearest:
No studies were found showing substantial, quantifiable benefits in terms of health outcomes, financial performance or staff turnover. However, this was more due to few or no studies asking these specific questions rather than a lack of effect. Most of the interventions measured were too small in scale to realistically affect cross organizational indicators on finance or quality.
What we do know is that when organizations are ‘well managed’ this can make a substantial difference to their performance: accounting for up to one third of profitability in all sectors16,and linked to better staff satisfaction and patient reported outcomes in health.17 Conversely, in depth investigations into large-scale failures in care routinely locate root causes in poor leadership, narrow management-by-objectives, disconnect between board-and bedside and a host of poor procedural, operational and administrative behaviors.18
1 Value walks: Successful habits for improving workforce motivation and productivity, KPMG International (2013)
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17 Dawson et al, NHS staff management and health service quality: Results from the NHS Staff Survey and related data, Department of Health (2011).
18 Walshe K & Shortell S, When things go wrong: How healthcare organizations deal with major failures, Health Affairs 23:3 p103-111 (2004).