Leading Change at Tufts-New England Medical Center

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Introduction

Tufts-New England Medical Center (Tufts-NEMC) in Boston, MA, is one of the oldest permanent medical facilities in the county. Nonetheless, it is a distinguished healthcare organization known as a general medical and surgical facility rated high for performing in computer technology and education around the world. Due to the prestige and acclaimed healthcare operations, the medical center received $2.3 billion in research grant money from the National Institute of Health. The $2.3 billion grant was the highest grant amount given to any medical facility in that region, second only to California. Therefore, it was a privilege to receive that much funding. Unfortunately, in the 1970s and the 1980s, Massachusetts hospitals, along with other medical facilities in the nation, accumulated a significant amount of debt to renovate the facilities and purchase new technological equipment.

As healthcare facilities faced hardship, Tufts-New England Medical Center was among the healthcare facilities that experienced financial struggles during the 1990s. The medical center was unsuccessful in forming critical network alliances with other hospitals, hurting Tufts-NEMC. Nevertheless, Tufts-New England Medical Center was able to deploy federal urban renewal and hospital construction programs to finance an aspiring expansion program designed to allow it to compete with other prestigious Boston hospitals. This was due to current CEO Ellen Zane, who put in blood, sweat, and tears in order to make changes in order to get this hospital back on top. This paper will provide an in-depth analysis of the case study focusing on the problems facing Tufts/NEMC and the approaches the organization used to position itself for change.

The Multiple Elements of the Problem

Tufts/NEMC’s financial position remained vulnerable; the company responded to changes in the business environment slowly and incompetently. The cash flow control and operational productivity improvement process were dysfunctional. Furthermore, Harvard-Pilgrim Health Care rejected to provide insurance coverage for Tufts/NEMC, citing high costs. Tufts/NEMC began looking for partner organizations in 1997 to alleviate its fiscal insecurity. The company’s top management chose the merger with Lifespan Corporation in Rhode Island because it was anticipated to enable the company to grow and expand its activity in academic medical center expansion in Rhode Island. Top management undervalued the complex nature of merging two different organizational structures and their implications.

As a result of the Lifespan merger, Tufts/NEMC lost its identity. They also stopped communicating with the Mayor’s office and Beacon Hill. Tufts-NEMC lost $6 million per month since the split with Lifespan. Despite being on the right track with Schottland’s initiatives, Tufts-NEMC lagged behind industry benchmarks in many areas, including days in accounts receivable, days in accounts payable, the average length of stay, operating margin, and days cash on hand. For instance, the multiple elements of the ‘length of stay’ problem included attitudes about patient care, procedural failures, lack of feedback to physicians, and the use of ‘PICC lines’ in the email address. The effects of each component on the organization are critical; for instance, PICC lines were more reliable IV lines that allowed patients to proceed with their medication at home. PICC lines had to be inserted by specially trained nurses, and many times the doctor discharged the patient too late in the day, leaving these nurses unavailable.

After evaluating the managed care contracts, Ellen Zane discovered that Tufts/NEMC was severely underpaid. Another problem for Tufts-NEMC was its size; the components of the problem included competition, marketplace, and volume of cases. Tufts/NEMC would be considered a significant player in any other market, but it was overshadowed by Partners, CareGroup, and Caritas in Boston. Sustaining the level of services and research required of a major medical center was incredibly challenging for an organization that did not have the volume of cases or endowments compared to competitors.

The Needs of the Community as They Relate to the Organization

Assessing the community’s needs as they relate to the organization is critical to success. Tufts/NEMC, for example, analyzed the needs and was the first to foresee a community medical service for the poor. As a result, the hospital quickly established a reputation for innovation. Furthermore, the hospital realized that assigning nurses to patients, forming a visiting nurse association, and establishing “dental, rehabilitation, venereal disease, lung, food, and nutrition, and evening pay clinics” were necessary (Ingols & Brem, 2016, p. 452). Tufts/NEMC was the first to offer employer-paid clinic treatment, well-child services, and moving x-rays based on the community’s needs.

The tradition of innovation has continued in recent years, with vital programs in cancer treatment, transplants, and neurosurgery. Tufts/NEMC became Boston’s first full-service, private teaching hospital in 1992 when it added a maternity service (Ingols & Brem, 2016). When Ellen Zane joined the organization, she also learned the importance of reaching out to the community because identifying and satisfying needs affect the organizational reputation and performance. For instance, Zane stated that she realized the importance of parking and employee work ethic by simply asking community doctors. Hearing thoughts and ideas from the community is highly beneficial to the organization. As a result, it is critical to respond to and satisfy those needs to improve community outcomes.

Approaches Used to Heighten Awareness of the Need for Change

The ADKAR Model consists of five fundamental approaches or steps: awareness, desire, knowledge, ability, and reinforcement. The ADKAR lifecycle, according to Galli (2018), starts with the recognition of a change. When an organization informs employees of the need for change, it is called ‘awareness.’ At this point, the main issue is determining the level of change for a specific project. Employee and project team ‘desire’ necessitates motivation to engage in the change and the ability to perform the required adjustments. As a result, employees need to realize how to change and what the change entails. ADKAR focuses on ‘Ability,’ which are the skills required to implement change daily. To develop and sustain and sustain change in the organization, ‘reinforcement’ is needed.

For instance, Ellen Zane used communication and outreach to heighten awareness and desire in the organization. Because the hospital was open 24 hours a day, Zane scheduled a series of meetings during the day and night to guarantee that everyone had an opportunity to attend. Zane decided to maintain the meeting twice a year on all shifts because they effectively spread information. Additionally, she supplemented them with regular emails in which she kept the employees and physicians up to date on finances and other matters. Ellen Zane used a variety of channels to spread the word and manage the turnaround effort (Ingols & Brem, 2016). Moreover, she reached out to physicians to spread her message of change while also retaining them in the face of widespread poaching from other AMCs. Zane invested a great deal of effort in retention and recruitment to focus on ability, knowledge, and reinforcement.

How Effectively an Organization Challenges the Status Quo

Notably, the status quo refers to a situation in which there is no change. Page and Schodler (2019) argue that people find transitions psychologically complicated because they find comfort in the status quo. Employees often find comfort in their traditions and established patterns of behavior. Essentially, organizations do not change due to new systems or processes; rather, changing the status quo necessitates individuals stepping into a new direction that conforms with their values and principles (Karp & Reavey, 2019). Page and Schoder (2019) suggest that it is critical that all members of the organization work toward the same goal. Most academic medical centers suffer from ‘analysis paralysis’ (Ingols & Brem, 2016). Consequently, they accept the status quo; nonetheless, the reality is that situations and matters never stay the same; they either improve or deteriorate. If a company does not actively improve the case, it will deteriorate.

Leadership is critical in creating a vision of change and removing any barriers employees may face. Venus et al. (2018) acknowledge that the ideal vision of change highlights the shortcomings of the status quo and offers a disparate and desirable option, hence, creating a need for change and inspiring followers to change. Leaders provide an inspiring vision and individual attention to employees, encouraging them to challenge the status quo and boost productivity (Page & Schoder, 2019). To effectively challenge the status quo, leaders must assess the market data, act to complete tasks, and distribute the vision of change across the organization. Ellen, for instance, is the type of person who takes action; she obtains 80–90 percent of the overall information she requires before developing the strategy (Ingols & Brem, 2016). When Zane joined the company, she brought in a consulting firm called BDC Advisors, Inc, that gathered data to identify why Tufts/NEMC was losing money.

Hence, Zane and BDC performed a ‘rapid diagnostic’ to assess how to stop the losses as early as possible and change the organization. These challenges were successful because Zane determined the organizational problems and developed a strategy to introduce organizational changes. Furthermore, she began assembling her management team and rebuilding the managed care contracts. Zane was completely open and transparent about the situation and necessary changes, and employees appreciated her leadership.

An Organization’s Efforts at Creating a Realistic Sense of Crisis or Disequilibrium

Creating a sense of disequilibrium is vital in fostering leadership development. According to McKim and Goodwin (2021), organizations indicate, classify, and support patterns of change that emerge from collaborative efforts within disequilibrium. Leaders encourage disrupting current behavioral patterns within a system because innovation, learning, and change occur from system disequilibrium. Furthermore, connecting agents within a system to other agents and emergent structures is critical for sharing information, ideas, and advancements. Disequilibrium creates great teamwork, profitable organizations, and, subsequently, strong leaders.

Zane worked hard on cost-cutting and efficiency initiatives to create a sense of disequilibrium to bring Tufts/NEMC in line with industry best practices in collaboration with Schottland and BDC. Zane maintained plans to sell real estate to put the hospital on solid financial footing. She also realized the importance of re-establishing Tufts/NEMC’s brand in the Boston market. The Agenda for Change was launched in 2004 by Zane, Shottland, and BDC as the second round of cost-cutting and efficiency plans to improve Tufts/NEMC’s processes (Ingols & Brem, 2016). Along with better reimbursements, it included restructuring and basic ‘blocking and tackling,’ or day-to-day operations.

The organization energized and motivated people to agree to the change through effective communication to spread the message of change. Significantly, Zane organized a series of ‘town meetings’ in which she presented financial data, details on new initiatives, and areas targeted for expansion. She was also forming strong bonds with others by greeting them, introducing herself, and expressing gratitude. As a result, the staff began to feel like Zane belonged to them. In addition, she started a monthly tour of the hospital’s various wards to connect with patients and nurses, enhance communication, and better understand their needs. The organization’s efforts were successful because changes were implemented, including the sale of a building to Tufts University for $28 million, which provided much-needed capital, cost-cutting initiatives, and improved managed care contracts; Zane began to develop a future strategy.

Conclusion

To summarize, Ellen Zane has successfully brought a change to Tufts/NEMC by employing appropriate approaches. She raised awareness and desire in the organization through communication and outreach. She supplemented staff by sending regular emails in which she kept employees and physicians updated on budgeting and other issues. Additionally, to implement changes, it is critical that all members of the organization work toward the same goal. Leaders must assess market data, act to accomplish projects, and spread the vision of change throughout the organization to effectively challenge the status quo. Zane conducted a “rapid diagnostic” to determine how to halt the losses and change the organization. These challenges were successful because Zane identified organizational issues, devised a strategy, and improved communication and networks. In collaboration with Schottland and BDC, Zane worked hard on cost-cutting and efficiency initiatives to instill a sense of disequilibrium and bring Tufts/NEMC in line with industry standards. Significantly, leaders encourage disrupting current behavioral patterns within a system because system disequilibrium fosters advancement, learning, and change.

References

Ingols, C. & Brem, L. (2016). Case study 5: Ellen Zane—Leading change at Tufts/NEMC [PDF]. In T. F. Cawsey, G. Deszca, & C. Ingols. (Eds.), Organizational change: An action-oriented toolkit (3^rd ed., pp. 448–479). Sage.

Joseph Galli, B. (2018). Change management models: A comparative analysis and concerns. IEEE Engineering Management Review, 46(3), 124–132. Web.

Karp, N. A., & Reavey, N. (2019). Sex bias in preclinical research and an exploration of how to change the status quo. British Journal of Pharmacology, 176(21), 4107-4118. Web.

McKim, A. J., & Goodwin, C. M. (2021). Emergent opportunities in complexity, leadership, and sustainability. Journal of Leadership Studies. Web.

Page, L., & Schoder, J. (2019). Making change last: Leadership is the key. Journal of Business Strategy, 40(2), pp. 32-41. Web.

Venus, M., Stam, D., & Van Knippenberg, D. (2018). Visions of change as visions of continuity. Academy of Management Journal, 62(3). Web.

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