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5 things health care organizations can learn from corporate America

Good business practices apply to health care, too

Health care shouldn’t be primarily about profit, but health care organizations can still learn from corporate America. Here, five common business practices for health care administrators to consider:


The customer should always come first.

The health care sector does a poor job of customer service, according to Alex Kadrie, PhD, instructor in the health administration program at University of Phoenix. Businesses succeed because “they are constantly looking for ways to improve customer satisfaction,” Kadrie says. “Whereas in health care,” Kadrie says, “you often have to waste three hours of your time to pay a bill for a medical service that might not work in the first place.” He believes health care organizations that make customer satisfaction a priority will attract more patients and be more profitable.

“Health care was once very paternalistic,” says Louise Underdahl, PhD, a health care administrator for the UCLA health system and an area chair in the University of Phoenix health administration programs. “The doctor gave his orders and nobody questioned him, least of all the patient. But now patients are demanding more control over their care.”


Remember that accountability matters.

“The private sector is famous for focusing on results and being accountable to the customer and shareholders,” Kadrie notes. “Health care doesn’t do this, because our bureaucratic reimbursement system is set up to reward procedures, not outcomes.” 

Efficiency-focused management strategies such as pay for performance and the Six Sigma® methodology that focus on quality improvement and accountability could help address this problem, Kadrie explains.


Embrace information technology.

“Corporate America is a model of how to leverage technology to add value,” Kadrie says, “whereas health care is 10 to 15 years behind the business world in information technology.” That’s a problem, because better IT systems can make for better decision-making and even safer care through use of electronic medical records.


Learn to collaborate.

“Health care administrators can learn a lot from open, collaborative systems,” Kadrie says. Health care providers, administrators and insurance companies generally do not collaborate well, and that’s bad for business, he argues.

“The health care sector is still very top-down and autocratic, and there are many competing stakeholders,” Kadrie says. “Everyone stays in their silos, suspicious of one another’s motives and generally not cooperating.” Meanwhile, successful companies such as Apple and Facebook have shifted to horizontal structures that encourage collaboration, which also stimulates innovation.


Don’t forget that marketing counts.

Health care organizations have traditionally resisted marketing their services, but that’s beginning to change, according to Underdahl.

“It is very important for health care providers to invest heavily in marketing,” she says, emphasizing the importance of radio spots, TV commercials and innovative branding. “Customers have many choices of where to obtain their care, so you must find ways to touch them and make them remember you.”


Six Sigma is a registered trademark of Motorola Inc.

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