The New Era of Healthcare Agility

I have supported healthcare leaders for more than 30 years and have observed a consistent pattern at times of fiscal uncertainty. When dollars are in question, health systems pull back, cut costs, and batten down the hatches. But this time, faced with much higher levels of rising uncertainty than any of the last seven cycles — with no signs of abatement due to potential Medicaid cuts, ongoing supply cost increases, staff shortages, and shrinking reimbursement — I’m seeing something different from a number of health systems. And I think that’s a good thing. 

These health systems, many with market momentum, are responding to heightened uncertainty by moving now to execute "must-do" strategies that embed a focus on long-term internal agility and alignment. They are acknowledging the past damage that short-term cost-cutting measures and revenue-enhancement "quick fixes" from big consulting firms have inflicted on their culture and operational strength. Instead, they are making bold moves to accomplish their immediate strategic imperatives by strengthening their internal operating systems: the way they run their organizations. The goal is to solve their most pressing business challenges now while also building the capability to tackle future challenges at speed. 

This shift could mark an important turning point in the industry, if others follow. Forward-thinking leaders are telling me they see the ability to pivot quickly, align teams effectively, and sustain improvement can help separate the winners from the losers in the dynamic era of constant change we are entering.  It also makes them more the leaders they want to be, not less.  

Marc Gorelick, MD, the retiring CEO of Children's Minnesota, captured this transformation well in our recent conversation on the Habitual Excellence podcast. He noted that their internal operating system — centered on everyone, every day solving problems and making improvements aligned with core business challenges and values — has become a powerful performance and culture-reinforcing engine after three years of refinement. It allows them to pivot quickly and successfully as strategic goals evolve faster than ever. 

Similarly, the COO of a prestigious academic health system shared that despite financial fragility, their c-suite and board are doubling down on strengthening their operating system. He said they recognize that to stabilize operations and escape the cycle of recurring problems, they must invest in a structured, sustainable approach to growing performance and adapting to change, no matter the environment. 

In another Habitual Excellence episode, C.J. Kunnappilly, MD, CEO of a leading public hospital in the San Mateo County Health System, described how his team is using this period to ambitiously rethink the level of value they can provide to their most vulnerable patients and the entire population they serve. "Good work" is no longer enough, he argues. The rapid pace of change can be positive by forcing the realization of how much more impact is possible.  It requires leaders willing to rethink their role and the full potential of their organizations. 

Duke is putting all the pieces of a great operating system together and applying it to increase patient access dramatically with many other accompanying performance and cultural benefits.  You can hear Duke’s COO for its Integrated Practice Simon Curtiss share the story on this episode of the Habitual Excellence podcast.   

I’m encouraged by the energy of these early movers across the sector, including the positive energy the leaders clearly feel themselves.  What about results? Several are picking up market share and margin while safety, quality and engagement improve.  

Let’s hope the health systems that will thrive in the coming years won’t just be those with market power. They will also be those that move now, aggressively building the internal capability to solve business challenges fast while strengthening their ability to adapt in pursuit of their mission. 

Healthcare’s pace of change is only accelerating. The question for leaders today is: has the conservative pattern of the past truly served us, or is it time to act decisively on your strategic targets in a way that builds the operating system to shape your future, no matter what comes? 

It’s great to see some health systems are already changing the pattern.