Radical overhaul takes time, effort and commitment from those involved – all things that Meliones stresses were vital to the changing process. Initially the hospital struggled to work together, essentially bickering over the minutiae and objective semantics, before the staff were able to put aside their differences and focus their energy on those in need – the patients.

However, Meliones writes that this phase was important, part of the change, and that once the focus was reset on the patients, the hospital began to work in a more cohesive way.

With the introduction of new protocols, Meliones found that, above all else, communication was the key. The communication issues at Duke were by no means unique to that hospital, or even hospitals, or even the medical trade, it is a very common problem across all kinds of business – greengrocers to sports teams, factories to restaurants.

Some of the changes in communication that Meliones recommends include: sharing problems with the team (making it clear that the survival of the business depends on their efforts and expertise), celebrating each team’s success, offering consistent feedback and even tricks as simple as teaching workers to see themselves as part of a “we”, a team, rather than being too overly concerned about their individual role.

A telling statement from Meliones, one which seems more relevant that ever in the light of the potential transformation of the National Health Service:

“There’s a fine art to communicating who know more than you do about their particular subject and who are passionate about their work.” (Harvard Business Review, 2000)

Communicate, communicate, communicate, he writes and it is hard to disagree that is a management mantra worth learning. Groups who work as teams as opposed to a collection of individuals invariably stand a far greater chance of success.

Should the Government’s now strongly opposed healthcare reform bill become legislation and their proposed changes come into effect, the NHS could do worse than to look at the example of Duke hospital – although there are elementary differences between the two case – for advice on how to cope with the change.

Written by the hospital’s incumbent Chief Medical Direcotr, Jon Meliones, the article discusses how the divisions between the staff, as he writes, “fiefdoms” in the hospital had an actively negative impact on the quality of healthcare.

At the time, the hospital was losing $11m per year and this was resulted in cutbacks in both staff and resources. Needless to say, this caused a drop in morale. Meliones says a that restated attitude of working to be the best was required:

“The institutional mission of a hospital is to promote the health of the community. But during difficult periods, it’s easy to lose sight of the big picture and focus solely on your fiefdom’s specific goals. Clinicians … want to restore their patients to health, they don’t want to think about costs.” (Harvard Business Review, 2000) 

Instead, Meliones began involving the medical staff in the financial side, discussing figures and the grim future the hospital would continue to face if the teams didn’t learn to work together. 

However, Meliones’ goal was to bring statistics such as ‘cost per case’ and average times in wards to signify where the hospital needed to improve. Despite tantrums and power struggles, Meliones eventually found that once the staff began working towards common goals and accepting their situation, results improved.

Duke introduced a ‘scorecard’ system, pioneering it with the most ritualistic and systematic of staff – surgeons. Developing teams and protocols, or ‘pathways’, Meliones began reorganising the thought process of the teams.

“We moved from mission-bound departments in which people identified only with their particular jobs (“I am a manager”, “I am a nurse,” and so on) to goal-oriented, multidisciplinary teams focused on a particular illness or disease (“We, the ICU team, consisting of the manager, the nurse, the physician, the pharmacist, and the radiologist, help children with heart problems.” (ibid, 2000)

Cost per case fell from over $14,800 in 1996 to near $10,000 in 2000. Meliones found that with teams working together, under more defined protocols, were able to both cut costs and improve patient healthcare.

In these, potentially, very transformative times for the NHS, under Health Secretary Andrew Lansley’s proposed health reforms, it may be that the healthcare system this side of the Atlantic is forced to adopt some policy from the other side.

In the second half of this blog, we’ll discuss Duke’s results and investigate how the NHS could adapt in the same way. Thank you for reading.

Flicking back through our archive of magazines, we came across a very interesting article from a 2002 issue of the McKinsey Quarterly. In this article, McKinsey point to their own research which suggests that performance-related pay actually decreases innovation and feelings of inclusion:

“Surprisingly, the secret of persuading people to focus simultaneously on developing new businesses and managing current operations may be to rely less on pay for performance.

In fact, companies that achieve both objectives de-emphasize performance pay or use it in a more nuanced, less intense manner. Crucially, they combine it with an unusually inclusive culture.

In these companies, employees feel that their interests and those of the business are much the same, so they naturally try to do what is best for its current and long-term welfare, just as they do for themselves in their personal lives.” (McKinsey, 2002 Issue 4, p. 47)

The notion that minimising conditional pay increases productivity is interesting. While some will be motivated to reach the goals through the prospect of money, there may well be an equal number of those who find the goals too much of a task to be worth the effort.

The issue of bonuses and pay escalators sometimes lie in the proportions. It is unlikely that there are no cases where unachievable conditions are added to detract from base salaries (McKinsey particularly references professional sportspeople at this point) and as we’ve seen at RBS and numerous other institutions, disproportionate bonuses can be awarded to those at the top of the ladder, leaving those at the bottom, who may feel underpaid and/or underappreciated, wondering what they’re working so hard for.

The article reaches far deeper than this though:

“The companies that most effectively motivate their employees to pursue future growth and, at the same time, to concentrate on current performance use weak, balanced incentive structures but take care to supplement them with unusually inclusive and motivating corporate cultures.

At a company of this kind, employees see a close fit between its long-term interests and their own.” (ibid, p. 54) 

It seems that the alternative suggested, all the way back in 2002, still holds firm now. With an ever-increasing divide between the very rich and the very poor, it is best to minimise the gap as much as possible in a work environment, both in terms of pay and ideology, and therefore better unite your team through a common goal.