Louis Shapiro, CEO of the Hospital for Special Surgery in New York City, discusses how to use effective hospital benchmarks in the era of healthcare reform.
Q: How has competition changed for your hospital over the last 10 years? Do you feel the market has become more competitive or less competitive for HSS?
Louis Shapiro: I think it's important for the reader to understand who we are, because that sets the stage for how we view competition. HSS is an academic medical center focused on musculoskeletal healthcare, and we are the largest organization of our type in the world. We have a reputation as a world leader in our space, and that space is not just Manhattan — it's the world. And the reputation we have is a function of our size, our outcomes and our reputation that is derived from our academic programs, both teaching and research.
All of that sets the stage for how we view competition. I look at competition on three levels, and this may have changed a little bit over the course of time. First of all, our biggest competitor is ourselves. What I mean by that is that we look at whatever level of performance we have achieved as setting the baseline for our improvements. So what we accomplished this year across every dimension of performance, next year we want to do better. We don't want to go backwards. That takes worrying about our competition out of the equation because those that are the best at what they do are going to be the most competitive in any marketplace. That is our driving focus.
The second point is that we are competition for reputation, not business or market share. That has to do with being viewed as a leader in our field by taking on initiatives that demonstrate our leadership role in teaching, research and patient care. It's about having a level of performance across all three dimensions of our mission that causes others from around the world to learn about us.
Q: Could you discuss some of the measures you use to make sure you are constantly competing against your past accomplishments?
LS: We use measures that are similar to a lot of places: people, quality, service, growth and economics. In each one of those areas, we have approximately 50 things we measure. And we want to set the benchmark. We don't want to aspire to reach a benchmark set by others. So whatever it is that we're looking at, we set goals every year that are divided into thresholds, target and optimum, based on whatever we have accomplished. So let's say that on infection rates, we have the lowest infection rate for hip replacement in the state of New York, adjusted for severity. Whatever we've accomplished this year is set as the threshold for next year, and then the target is some increment over that, and the optimum is some increment over the target.
We then have plans that drive actions through the organization that allow us to achieve target or optimum results. Let's say we achieve optimum — we really knock the lights out. That optimum then becomes our threshold. Sometimes you make improvements and sometimes you don't, and you build that into your management system.
Take patient satisfaction, for example. You're familiar with Press Ganey and the "likelihood to recommend" measure. That's the single most important measure of customer satisfaction in any business, and for 11 consecutive quarters, we have been at the 99th percentile for "likelihood to recommend" when you compare us to Magnet hospitals across the country. There are all kinds of things we do that result in [exceeding patient expectations], but there are always opportunities to get better. You don't get better if you don't identify opportunities to get better. There are only two ways to go — up or down – and the fact that you're in the 99th percentile is not very relevant if you don't have a composite score of 100.
So we have a strategic plan that cuts across those five pillars, and we have 13 strategic priorities. All those priorities are cascaded down so that, in theory, every single employee knows our strategic plan. They know what their contribution is to each one of the 13 strategic priorities. It's a cascading approach that is obviously coupled with intense quantities of communication.
Q: How do you stay competitive through physician recruitment and retention?
LS: I'll address the second part first. The way we retain physicians is by creating an environment that allows them to deliver extraordinary care and perform at their highest level in teaching and research. It's all about the environment you create for the people who work there, whether they're in housekeeping or they're a full professor of whatever specialty.
In terms of recruiting, we have significant training programs that attract the best and brightest students. They spend many years here training, and we have a significant portion of our full-time medical staff that have started out here and just stayed. We generally don't have any major challenges in recruiting and retaining them.
Q: What about marketing to the public? Do you focus on advertising?
LS: We're not resting on our reputation, so we work on that reputation daily. That's the core of our strategic plan. In terms of how we get the word out, the singular most important thing is word-of-mouth. If someone comes here and they say to me, "I can't believe I've never had an experience like this. I went to five places and they didn't know what to do, and I came here and you figured it out and I had an extraordinary experience," that's our most effective way of communicating. It's also the most expensive — on the one hand, it's free, but it takes a lot to offer that kind of experience.
We also do all the traditional things — we advertise on TV, print and radio, and we make sure all the media outlets know the great things that go on here. We have significantly invested in taking advantage of the internet of social media. In terms of the internet, we have something like 300,000 unique visitors to our website every month, and 2-3 million a year to our website. Those people are seeking information about what we're actually doing. And using social media to communicate to the world is actually not a new thing anymore. [An employee] recently joined our staff to help drive the social media strategy for our organization through Facebook, Twitter and YouTube, and it's very meaningful stuff. We had a sell-out performance at a major conference recently, and we were Tweeting all the way through it.
All this stuff has a real impact. We don't want to be the best-kept secret in healthcare.
Q: Are there other areas you focus on to remain competitive? I'm thinking of advances in technology, competitive service lines, quality outcomes, etc.
LS: Our strategic plan has a two-year view, and we update it every year and significantly overhaul it based on what's happening in the external environment and what we've accomplished. Then we look at what we need to work on and that forms the strategic plan. So we look at changes in demographics, where science is heading, what's happening in the competitive landscape and what's happening with healthcare reform, and we try to distill it down to what it means for you. We mix that [research] with the hospital's vision and bring it down to a practical level that will give the organization a focus of what to work on.
For example, one of our strategic priorities is advancing the field through discovery and innovation. We have healthcare reform coming in, and healthcare reform has three objectives: improving access for some 40 million Americans who don't have insurance, improving quality and lowering cost. We are an academic medical center, the largest musculoskeletal institute in the world, and we have access to more information than anyone. So this started long before healthcare reform, but we've elevated it significantly by investing in registries to collect data from the volume of patients we treat. We're doing this both ourselves and collaboratively with others in the industry and across the world. We're studying how we take care of these patients, and registries allow you to look at outcomes research and medical effectiveness. We're going to study this and share those results with others so they can take advantage of what you're learning. While you're competing, you're also collaborating.
Learn more about Hospital for Special Surgery.
Related Articles on Hospital Competition:
UnitedHealth Fined $1M for Antitrust Violations
Physician Integration Economics: How Market Share is Captured and Retained
5 Changes That Can Increase a Hospital's Value
Q: How has competition changed for your hospital over the last 10 years? Do you feel the market has become more competitive or less competitive for HSS?Louis Shapiro: I think it's important for the reader to understand who we are, because that sets the stage for how we view competition. HSS is an academic medical center focused on musculoskeletal healthcare, and we are the largest organization of our type in the world. We have a reputation as a world leader in our space, and that space is not just Manhattan — it's the world. And the reputation we have is a function of our size, our outcomes and our reputation that is derived from our academic programs, both teaching and research.
All of that sets the stage for how we view competition. I look at competition on three levels, and this may have changed a little bit over the course of time. First of all, our biggest competitor is ourselves. What I mean by that is that we look at whatever level of performance we have achieved as setting the baseline for our improvements. So what we accomplished this year across every dimension of performance, next year we want to do better. We don't want to go backwards. That takes worrying about our competition out of the equation because those that are the best at what they do are going to be the most competitive in any marketplace. That is our driving focus.
The second point is that we are competition for reputation, not business or market share. That has to do with being viewed as a leader in our field by taking on initiatives that demonstrate our leadership role in teaching, research and patient care. It's about having a level of performance across all three dimensions of our mission that causes others from around the world to learn about us.
Q: Could you discuss some of the measures you use to make sure you are constantly competing against your past accomplishments?
LS: We use measures that are similar to a lot of places: people, quality, service, growth and economics. In each one of those areas, we have approximately 50 things we measure. And we want to set the benchmark. We don't want to aspire to reach a benchmark set by others. So whatever it is that we're looking at, we set goals every year that are divided into thresholds, target and optimum, based on whatever we have accomplished. So let's say that on infection rates, we have the lowest infection rate for hip replacement in the state of New York, adjusted for severity. Whatever we've accomplished this year is set as the threshold for next year, and then the target is some increment over that, and the optimum is some increment over the target.
We then have plans that drive actions through the organization that allow us to achieve target or optimum results. Let's say we achieve optimum — we really knock the lights out. That optimum then becomes our threshold. Sometimes you make improvements and sometimes you don't, and you build that into your management system.
Take patient satisfaction, for example. You're familiar with Press Ganey and the "likelihood to recommend" measure. That's the single most important measure of customer satisfaction in any business, and for 11 consecutive quarters, we have been at the 99th percentile for "likelihood to recommend" when you compare us to Magnet hospitals across the country. There are all kinds of things we do that result in [exceeding patient expectations], but there are always opportunities to get better. You don't get better if you don't identify opportunities to get better. There are only two ways to go — up or down – and the fact that you're in the 99th percentile is not very relevant if you don't have a composite score of 100.
So we have a strategic plan that cuts across those five pillars, and we have 13 strategic priorities. All those priorities are cascaded down so that, in theory, every single employee knows our strategic plan. They know what their contribution is to each one of the 13 strategic priorities. It's a cascading approach that is obviously coupled with intense quantities of communication.
Q: How do you stay competitive through physician recruitment and retention?
LS: I'll address the second part first. The way we retain physicians is by creating an environment that allows them to deliver extraordinary care and perform at their highest level in teaching and research. It's all about the environment you create for the people who work there, whether they're in housekeeping or they're a full professor of whatever specialty.
In terms of recruiting, we have significant training programs that attract the best and brightest students. They spend many years here training, and we have a significant portion of our full-time medical staff that have started out here and just stayed. We generally don't have any major challenges in recruiting and retaining them.
Q: What about marketing to the public? Do you focus on advertising?
LS: We're not resting on our reputation, so we work on that reputation daily. That's the core of our strategic plan. In terms of how we get the word out, the singular most important thing is word-of-mouth. If someone comes here and they say to me, "I can't believe I've never had an experience like this. I went to five places and they didn't know what to do, and I came here and you figured it out and I had an extraordinary experience," that's our most effective way of communicating. It's also the most expensive — on the one hand, it's free, but it takes a lot to offer that kind of experience.
We also do all the traditional things — we advertise on TV, print and radio, and we make sure all the media outlets know the great things that go on here. We have significantly invested in taking advantage of the internet of social media. In terms of the internet, we have something like 300,000 unique visitors to our website every month, and 2-3 million a year to our website. Those people are seeking information about what we're actually doing. And using social media to communicate to the world is actually not a new thing anymore. [An employee] recently joined our staff to help drive the social media strategy for our organization through Facebook, Twitter and YouTube, and it's very meaningful stuff. We had a sell-out performance at a major conference recently, and we were Tweeting all the way through it.
All this stuff has a real impact. We don't want to be the best-kept secret in healthcare.
Q: Are there other areas you focus on to remain competitive? I'm thinking of advances in technology, competitive service lines, quality outcomes, etc.
LS: Our strategic plan has a two-year view, and we update it every year and significantly overhaul it based on what's happening in the external environment and what we've accomplished. Then we look at what we need to work on and that forms the strategic plan. So we look at changes in demographics, where science is heading, what's happening in the competitive landscape and what's happening with healthcare reform, and we try to distill it down to what it means for you. We mix that [research] with the hospital's vision and bring it down to a practical level that will give the organization a focus of what to work on.
For example, one of our strategic priorities is advancing the field through discovery and innovation. We have healthcare reform coming in, and healthcare reform has three objectives: improving access for some 40 million Americans who don't have insurance, improving quality and lowering cost. We are an academic medical center, the largest musculoskeletal institute in the world, and we have access to more information than anyone. So this started long before healthcare reform, but we've elevated it significantly by investing in registries to collect data from the volume of patients we treat. We're doing this both ourselves and collaboratively with others in the industry and across the world. We're studying how we take care of these patients, and registries allow you to look at outcomes research and medical effectiveness. We're going to study this and share those results with others so they can take advantage of what you're learning. While you're competing, you're also collaborating.
Learn more about Hospital for Special Surgery.
Related Articles on Hospital Competition:
UnitedHealth Fined $1M for Antitrust Violations
Physician Integration Economics: How Market Share is Captured and Retained
5 Changes That Can Increase a Hospital's Value