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So which pillar was that?

August 10th, 2007

by Jeff McKune

It is interesting to visit with those at other hospitals and see commonalities between institutions. One of the first of these commonalities that I noticed was the five pillars. Sometimes the pillars are expressed as part of an organization's values, and other times they serve as a means of categorizing strategic plans. Perhaps your hospital has these same pillars, or something similar: People, Service, Growth, Finance, and Quality. Each time I have heard of these pillars, the "People" pillar is listed first, and often someone will say something like "Our People pillar is first, because we put our people first."

A quick glance at an income statement will certainly confirm that people costs - salaries and benefits - typically comprise 55 to 60 percent of a hospital's operational expenses. But do those expenses really count as investments in those all important human resources that make healthcare work? Fundamentally, healthcare, at least in the context of a hospital, is delivered by people. I won't downplay the importance of facility expansions and technology purchases that keep a hospital in the forefront of quality care. But let's remember that it is not the facilities or the technology that are actually delivering the care - it is our people.

We can look back at our institutions and remember a timeline of growth. It often goes something like this: "We added our East Addition in 1990 at a cost of $20M, increasing our capacity by 50 beds. In 2000 we added two 16-slice CT systems to our imaging department at a cost of $3M. Our new Cardiology Department has allowed us to provide new services to our community at a cost of $25M."

These are all good things, but when was the last time you heard a healthcare leader say "In 2002 we recognized a need to improve staff retention and maximize the productivity of our human resources, and we invested $3M in our new leadership development program. Seeing significant improvements in several areas, including employee satisfaction and patient satisfaction, we continued our investment in our people in 2005 by establishing an in-house university, improved tuition reimbursement for academic education and professional certifications, and mandatory annual HR training for all leaders at the director level and up - all at an initial cost of $7M with annual operational expenses of $2.5M. In addition, all of our senior staff are actively involved in our leadership development efforts, participating both as students and instructors on a regular basis."

There are ample research studies to demonstrate the benefits of this kind of HR focus in an organization. Would it make a difference in our hospitals if we really took that first pillar seriously?

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