Leading a public hospital - thoughts from a CEO

As the nation transitions toward some version of a reformed health system, one might ask what the role of public hospitals will be. In addition to serving as the primary back-up-plan for America’s failing health care system, public hospitals are faced with a conundrum. They are caught between the eroding health care system and the eroding public services sector. There is an increasing awareness that both are unsustainable as they exist today. States like Indiana and Wisconsin who eliminated collective bargaining for public employees may offer a glimpse of additional changes and serious challenges on the horizon. Sitting directly in the middle of these endangered systems are public hospitals.

Currently, health care makes up about seventeen percent of our nation's gross domestic product (GDP) and is climbing at a steady and unsustainable rate. In America, daily debates continue about bailouts, stimulus packages and health reform. Although potential solutions are still in a very nascent and fragile phase, it is clear there has been a sea change. There is a unique opportunity before leaders in health care, as well as leaders in the public sector. We are, without question, at a point in history where change is not only possible, it is inevitable.

Public hospitals are being challenged by the economic downturn. The number of people who are struggling to meet their most basic needs is increasing in communities across the nation and locally. According to California Association of Public Hospitals (CAPH), in California, the number of uninsured people seeking care in public hospital emergency rooms, increased by nineteen percent. In the San Francisco bay area, Santa Clara Valley Health System reported a one-third increase in the number of new patients in its emergency room. Contra Costa Regional Medical Center saw a twelve percent increase in the number of patients in its emergency room. The surge in demand is being replicated throughout the state of California. Los Angeles County also saw a twelve percent increase for its four hospital’s emergency rooms. Though these data are based on a 2007 survey, there is no indication of a significant shift in trends.

CAPH further notes that though they represent just six percent of all hospitals statewide, the nineteen public hospitals are located in counties where 81 percent of Californians live. They provide nearly half of the hospital care to the state’s 6.6 million uninsured. I think it is safe to say that providing care for the uninsured is what most people believe is the purpose of public hospitals. Yet in California, a state many would argue has an abundance of health care available, public hospitals also operate 54 percent of all top-level trauma centers , 43 percent of all burn units, train over half of the new doctors and operate robust outpatient operations that total over 10 million clinic visits a year.

It is during these difficult times when safety-net hospitals along with others in the public sector, are called on to further stretch already tight resources. To add to the challenge, local budgets at the county and municipal levels are dwindling, leaving leaders and society to face difficult choices. Recently a public leader in Contra Costa County published an opinion piece calling on the County Board of Supervisors to eliminate funding for the local public hospital. They urged the public to contact their elected officials and support safety over public health subsidy.

Moving away from either position one may be tempted to take, it should be noted that there is nothing new about vying for a bigger piece of the pie. In 1968, Garrett Hardin, presented this complex dilemma in his seminal publication, The Tragedy of the Commons. In his essay, Hardin explores problems arising from population growth and the finite availability resources on the planet. He winds through a labyrinth of ideas that ultimately and inevitably lead to the conclusion that a human solution, not a technological solution, will need to be applied to the challenges of the sustainability of shared resources.

To illustrate this, Hardin presents a fable which takes the reader to a pasture used by the local farmers. The pasture, full of lush green grass in the center of the region, is not owned by an individual, but rather by the entire community. He calls this shared resource “the commons.” Each farmer, looking out for his own interest, attempts to expand his herd. The farmer receives all the proceeds from the additional animal. However, each animal also causes slight degrading of the pasture. Ultimately, the pasture is overgrazed and degraded, rendering it no longer a viable resource for the community. The end result, everyone loses.

One premise of the story is that recognizing or identifying resources as “commons” in the first place, acknowledges they require management. Hardin concludes that a human solution was needed to escape the “tragedy of the commons.” It would require people to come together to create a plan to sustain the commons.

More recently, Elinor Ostrom shared the 2009 Noble Prize with Oliver Williamson in Economic Sciences when she revisited the concept of the commons. She defined the commons as collectively owned resources. Her work explores governance schemes of collective resources. She argues against a single governance structure for management of commons and instead supports shared governance. Simply stated (embarrassingly simply as her work is so much more), her research forwards that collective resources can and should be managed by the people who actually use them. Both Hardin and Ostrom identify people themselves must seek shared solutions for management of collective resources.

So how might the concept of the commons apply to this discussion? At its core is the underlying reality that there is only so much public good (space on the commons-tax dollars-call it what you like) to go around. Public services are not free. The public leader who called on the Board of Supervisors understands that the public good is allocated, or parceled out, to support public service. Many factors are considered when making these very hard choices. Use and manipulation of provocative language and tugging at social values, pepper the debates over the division of resources. In the end it will come down to hard choices - rationing of the public good – rationing of the commons.

In general, people hate the concept of rationing. Particularly, as it relates to health care. It strikes at the heart of our fears. We are Americans and have been bombarded with the notion that everyone has the same chance to succeed. It is called the American Dream, made up of opportunity, self-determination, independence and choice. At its foundation, the American Dream promises that we are all equal. Again, moving away from particular position on equality, as I know there are diverse opinions on this, I think it's important to understand what influence these belief systems might have.

There are clear implications for leaders of public hospitals when considering the complex social drivers and influencers of decisions as they relate to what Ostrom and Hardin refer to as the commons. Myths that depict substandard, low quality, government-run health care systems persist. These myths change form in order to survive and thrive in environments consisting of fragmented snapshots of knowledge rather than the entire landscape. Much like a virus that mutates evading the grasp of those who pursue it, the myths that surround public hospitals as places of substandard care continue to persist.

With the increasing demand for public service, those working to preserve and enhance the safety-net will need new levels of leadership skill. Knowledge of improvement science and systems-thinking will be needed to face the significant operational, policy and political challenges that lay ahead. Too often, when thinking of the safety-net, the “last resort” image prevails rather than a place of excellence, hope and recovery and as a place where no one is left out. To add to the challenge, it is increasingly difficult in these difficult fiscal times to achieve alignment among public leaders themselves.

Hence, the perfect storm has arrived.

In order to achieve sustainable solutions, there is need for a shared framework not only among public hospitals, but also across the public sector. The challenges leaders are facing will only increase if they move forward alone. Public leaders, and specifically public hospital leaders, will face ongoing political realities with local, state and national fiscal crisis. They must meet the needs of today while pursuing a sustainable system that provides:

• Better Care: Improve the overall quality, by making health care more patient-centered, reliable, accessible, and safe.
• Healthy People and Communities: Improve the health of the population by supporting proven interventions to address behavioral, social, and environmental determinants of health in addition to delivering higher-quality care.
• Affordable Care: Reduce the cost of quality health care for individuals, families, employers, and government.
-National Quality Strategy, HHS.gov

I believe that key to achieving this will be ceding individual control in order to develop shared aims that are meaningful to those we are here to serve.

A sky filled with clouds of change offers the perfect opportunity. It truly is a perfect storm and should not go to waste. Leaders should not run for shelter, nor resort to tearing each other down in order to protect the status quo. They should look to the legacy and long history of innovation in the public sector and instead seek collective solutions, embracing the opportunities before them to continue to serve their communities.