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Management Mistakes in Healthcare

This book defines management mistakes and offers a variety of models to classify and interpret
them. It describes the evolution of management mistakes, techniques for identifying and
disclosing mistakes, the relationship between management and medical mistakes, and steps to
prevent and correct them. Seven case studies, drawn from a real set of events in healthcare
organizations, describe management mistakes and are followed by commentaries by experts in
the field of healthcare management, indicating measures that might have produced more
positive outcomes.
Ultimately, managers will not be completely successful in making healthcare better and more
cost-effective without viewing mistakes as learning opportunities. This book is written for
healthcare managers throughout the world and for the benefit of their patients, staff, and
communities.

Paul B. Hofmann, P. H., FACHE, Provenance Health Partners, Moraga, California, provides
consulting services to healthcare systems and hospitals. He has served as Executive Vice
President and COO of the Alta Bates Corporation, a non-profit healthcare system in northern
California, Executive Director of Emory University Hospital in Atlanta, Georgia, and Director of
Stanford University Hospital and Clinics. In addition to being co-editor of Managing Ethically:
An Executive Guide (Health Administration Press, 2001), he is the author of over 125 articles and
has held faculty appointments at Harvard, UCLA, Stanford, Emory, and the University of
California.

Frankie Perry, R. N., M. A., FACHE1, currently serves on the faculty of the University of New
Mexico and as the Executive Director of The Chairman’s Society, an Atlanta-based organization
whose mission is the education and training of healthcare board Chairmen-Officers. She has
served as Assistant Medical Center Director of Hurley Medical Center in Flint, Michigan. In
addition to her hospital experience, she served as Executive Vice President of the American
College of Healthcare Executives and as a national and international healthcare management
consultant with engagements in Cairo, Egypt, Doha, Qatar, and Bombay, India, among others.
She is the author of The Tracks We Leave. Ethics in Healthcare Management, published in 2001.
Management Mistakes in
Healthcare
Identification, Correction, and Prevention

Edited by

Paul B. Hofmann and Frankie Perry

Foreword by

Richard J. Davidson
President, American Hospital Association
CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo

Cambridge University Press


The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521829007

© Cambridge University Press 2005

This publication is in copyright. Subject to statutory exception and to the provision of


relevant collective licensing agreements, no reproduction of any part may take place
without the written permission of Cambridge University Press.
First published in print format 2004

ISBN-13 978-0-511-33721-5 eBook (EBL)


ISBN-10 0-511-33721-3 eBook (EBL)

ISBN-13 978-0-521-82900-7 hardback


ISBN-10 0-521-82900-3 hardback

ISBN-13 978-0-521-53594-6 paperback


ISBN-10 0-521-53594-8 paperback

Cambridge University Press has no responsibility for the persistence or accuracy of urls
for external or third-party internet websites referred to in this publication, and does not
guarantee that any content on such websites is, or will remain, accurate or appropriate.

Every effort has been made in preparing this book to provide accurate and up-to-date
information that is in accord with accepted standards and practice at the time of
publication. Nevertheless, the authors, editors, and publisher can make no warranties that
the information contained herein is totally free from error, not least because clinical
standards are constantly changing through research and regulation. The authors, editors,
and publisher therefore disclaim all liability for direct or consequential damages resulting
from the use of material contained in this book. Although case studies are drawn from
actual events, every effort has been made to disguise the identities of the organizations
involved.
Contents

Notes on the contributors vii


Foreword xi
Richard J. Davidson, President, American Hospital Association
Preface xv
Acknowledgments xvii

Part I Addressing management mistakes in healthcare


1 Acknowledging and examining management mistakes 3
Paul B. Hofmann

2 The context of managerial mistakes 28


John Abbott Worthley

3 Identifying, classifying, and disclosing mistakes 40


Wanda J. Jones

4 What medical errors can tell us about management mistakes 74


Carol Bayley

5 Correcting and preventing management mistakes 84


John A. Russell and Benn Greenspan

6 A question of accountability 103


Emily Friedman

Part II Case studies of mistakes in healthcare management

7 Medical errors: Paradise Hills Medical Center


Commentary 119
Frankie Perry
vi Contents

8 Nursing shortage: Metropolitan Community Hospital


Commentary 135
Trudy Land

9 Information technology setback: Heartland Healthcare System


Commentary 155
Mark R. Neaman

10 Inept strategic planning: Southwestern Regional Healthcare System


Commentary 165
Robert S. Bonney

11 Public relations fiasco, George C. Fremont Community Hospital


Commentary 173
Ruth M. Rothstein

12 Ineffectual governance: Pleasant Valley Regional Health System


Commentary 180
Joyce A. Godwin

13 Failed hospital merger: Richland River Valley Healthcare System


Commentary 201
Fred L. Brown

14 UK review of selected cases 215


Robert Nicholls and Andrew Wall

15 Lessons learned: insights and admonitions 225


Paul B. Hofmann and Frankie Perry

Suggested further reading 240


Index 242
Notes on the contributors

Paul B. Hofmann, Dr. P. H., FACHE, Provenance Health Partners, Moraga,


California, has over 35 years of experience in healthcare consulting, hospital
administration and teaching. Prior to providing performance improvement
consulting services to health systems and hospitals, he served as Executive Vice
President and COO of the Alta Bates Corporation, a non-profit healthcare
system in northern California; Executive Director of Emory University
Hospital in Atlanta, Georgia; and Director of Stanford University Hospital and
Clinics in Palo Alto, California. In addition to being co-editor of Managing
Ethically: An Executive’s Guide (Health Administration Press, 2001) he is the
management ethics consultant to the American College of Healthcare Executives
and author of over 125 publications. Dr. Hofmann has held faculty appoint-
ments at Harvard, UCLA, Stanford, Emory, the University of California, and
Seton Hall University.

Frankie Perry, R. N., FACHE1, has held senior-level positions in both nursing
and hospital administration and brings many years of healthcare management
experience to her co-authorship of this volume. In addition to her hospital
experience, she served as Executive Vice President of the American College of
Healthcare Executives and as a national and international healthcare management
consultant. She is a widely published author of articles on ethics and healthcare
management and was a 1984 recipient of the Edgar C. Hayhow Award for Article
of the Year by the American College of Hospital Administrators. Her most recent
book is The Tracks We Leave: Ethics in Healthcare Management, (Health
Administration Press, 2001). She currently serves on the faculty of the University
of New Mexico and as the Executive Director of The Chairman’s Society,
an Atlanta-based organization whose mission is the education and training of
healthcare board Chairmen-Officers.

Carol Bayley is Vice President for Ethics and Justice Education at Catholic
Healthcare West in San Francisco. She has published in the areas of alternative
viii Notes on the contributors

medicine, the philosophy of science, pharmacy ethics, genetics, and medical error
and is an Adjunct Faculty Member at the University of San Francisco.
Robert S. Bonney, J. D., FACHE, is Senior Vice President for Business
Development for the Saint Luke’s Health System in Kansas City, Missouri. He is
a prolific author and holds faculty positions at the University of Missouri and the
University of Kansas.
Fred L. Brown, FACHE, was founder, President, and CEO of BJC Healthcare in
Saint Louis, Missouri and currently serves as Chairman of the National Kidney
Foundation and as Vice Chairman of the Board of Commissioners of the Joint
Commission on Accreditation of Healthcare Organizations.
Emily Friedman, an internationally recognized writer, lecturer, and health policy
and ethics analyst based in Chicago, is also Adjunct Assistant Professor at the
Boston University School of Public Health.
Joyce A. Godwin had twenty-five years experience in healthcare management
before she decided to pursue corporate governance interests. She now lives in
Albuquerque, New Mexico and serves on numerous local, national, and inter-
national corporate and healthcare boards.
Benn Greenspan, MPH, Ph.D., FACHE, recently retired after serving as
President and CEO of Sinai Health System of Chicago for thirteen years. He
consults and serves as clinical associate professor and director of the MHA
Program at the University of Illinois, School of Public Health.
Wanda J. Jones, MPH, is President of New Century Healthcare Institute, a non-
profit organization devoted to research, development, and education in healthcare
delivery, located in San Francisco.
Trudy Land, FACHE, is a consultant providing executive healthcare services.
She has more than twenty years of experience in healthcare administration and
management. Ms. Land is the recipient of several healthcare honors and awards.
Mark R. Neaman, FACHE, is the President and CEO of Evanston Northwestern
Healthcare Corporation, Evanston, Illinois. He is also a past chairman of the Board
of Governors of the American College of Healthcare Executives.
Robert Nicholls, a former senior NHS executive, is now Chairman of the
National Clinical Assessment Authority in the United Kingdom and a lay member
of the General Medical Council.
Ruth M. Rothstein recently retired as Chief of the Cook County Bureau of Health
Services, Chicago, Illinois, and has led the Bureau since its creation in 1991. She is
ix Notes on the contributors

widely known and highly regarded throughout the country for her leadership and
creativity in improving the quality of the healthcare system.
John A. Russell, MHA, FACHE, served as the CEO for the Hospital Association of
Pennsylvania for some twenty-two years and previously held senior administrative
positions at academic medical centers associated with Northwestern University,
University of Wisconsin, and Pennsylvania State University.
Andrew Wall, B. A, M.Sc, FIHM, a former NHS Chief Executive, is now a part-
time lecturer at the Health Services Management Centre, University of
Birmingham, United Kingdom. His numerous publications include Ethics and
the Health Services Manager and The Reorganized National Health Service.
John Abbott Worthley, D. P. A., based in Glen Cove, New York, is an international
consultant and Professor of Public Management in the United States and Asia.
He is the author of Organizational Ethics in the Compliance Context, The Ethics
of the Ordinary in Healthcare, and several other books.
Foreword
Dick Davidson
President, American Hospital Association

Reading for the first time the hard-hitting case studies in this important book took
me back to my days as a young school teacher in Delaware. On Monday nights, I’d
watch the hospital drama ‘‘Ben Casey.’’ As the show opened, a wise old voice would
intone ‘‘man, woman, birth, death, infinity.’’ On screen, an anonymous right hand
holding a stubby piece of chalk drew the universal symbol for each word on a
classroom blackboard. Shot in black and white, the show was gritty and real, and it
made Ben Casey’s County General Hospital seem like a metaphor for the world the
rest of us lived in.
In fact, hospitals once were perceived as a much more integral part of the
community than they are today. And this image has been reinforced for decades by
our popular culture. In the 1970s, we had kindly Marcus Welby, MD, treating
patients at, appropriately, Hope Memorial. In the 1980s, hard-luck patients were
warmly welcomed at city-owned St. Elsewhere.
These dramas showed hometown American hospitals as the public saw them –
life-saving, compassionate and participating partners in their community. Week
after week, the familiar characters showed us how the life and death consequences
of healthcare bind us in a very special relationship to the people and institutions
that care for us. The shows were huge hits because they validated the real-world
experiences of ordinary people when they went to the hospital.
But, as we neared the twenty-first century, forces shaping how the public sees
hospitals were changing. Public opinion research showed that more and more
Americans felt that our healthcare system wasn’t meeting their needs. A stream of
negative news reports played up worst-case medical errors, billing inequities, and
the immense problems of a system becoming more expensive and complex. On
TV, the doctors and nurses on ‘‘ER’’ still seemed heroic, but the hospital seemed
like a bureaucratic barrier that got in the way of good people trying to help people.
What had changed? Was art really imitating life? Research told us that the public
was experiencing a widening healthcare confidence chasm. The public worried
about quality, safety, and their ability to afford the care they might need if they
xii Foreword

lost precious health insurance. The public clearly wanted a more personal, less
business-focused healthcare system.
Not surprisingly, out of the spotlight, policy makers, lawmakers and the dedi-
cated men and women who run our hospitals and health systems have wrestled
with these same issues. But their successful efforts to address these concerns have
received little attention. After all, why kill a good story line? There is little tension
or drama in the often slow and careful path of change.
The uncovered good news is that successful change is radically reducing clinical
errors and producing better clinical outcomes. The words ‘‘patient safety’’ are
more than a mere term of clinical art; they are rallying cry for the nationwide
movement to transform healthcare itself. Hospitals have committed enormous
human and financial resources to the cause.
But overlooked and understudied – until this book – is a lesser-known and
seldom examined area in which quality improvement can make all the difference –
the kind of executive errors and management mistakes that can also devastate a
hospital’s performance, reputation, and public standing. Also overlooked and
understudied – until this book – is what we can do to correct and prevent them.
And the bottom line? This, too, needs to be a cause.
‘‘Executive error’’ often occurs out of the media’s line of sight. It’s easy to pass
by, especially when the public spotlight shines so brightly on our national effort to
reduce medical errors. Unfortunately, some organizational cultures prefer it that
way, shortsightedly choosing plausible deniability to honest and transparent
accountability. And similar to clinical error, the world of management error is
often characterized by a dysfunctional culture of blame, shame, and punishment.
Now, thanks to editors Paul Hofmann and Frankie Perry and an outstanding
assembly of contributing authors, a sharply focused and bright new spotlight is
illuminating this long-ignored subject. Hofmann and Perry, experts on healthcare
management practices and ethics, teach us here about the up-close forces and
factors that trigger executive errors in the first place. They set up the challenges that
confront healthcare leaders who need to understand the landscape as it appears
from 30,000 feet. The lessons to be learned from the seven cases they present are
urgent and vital for all hospital and health systems executives and their manage-
ment teams, employees, and patients.
As you’ll see in the pages that follow, this is a tough area to investigate. In an
atmosphere of blame and shame, the old rules impose zero tolerance for errors and
zero tolerance for the humans who err. When a mistake occurs, the shame system
contracts in self-defense, and there are scapegoats and punishment, typically with
demotion or dismissal. The system, thus ‘‘fixed,’’ resumes business as usual. But it
remains blind to its inherent failings and in denial over its fatal flaws – until
someone errs again.
xiii Foreword

Internally, the damage can be lethal and lasting. The culture can turn mean and
threatening. Teamwork, critical to preventing or fixing management error, crumbles
under the weight of self-protection.
Externally, the chain of public trust, tremendously difficult to forge over time, is
ever more stressed. The most successful hospital executives and managers take this
on faith. Clinical errors? Correct them, learn from them, and move on.
Management mistakes? Same thing. Correct them, learn from them, and move
on, as well.
Many hospitals are already models for how to succeed in a post-blame and
shame era. They know that you don’t need to go to business school to apply some
common sense. We tell our kids that we learn from our mistakes. We need to
practice the same principle in healthcare management. Other important principles
you’ll take away from this book include:
• Realizing mistakes are not a ‘‘people’’ problem, but a ‘‘systems’’ problem.
• Benefiting from the experience of the patient safety movement.
• Emulating the best practices of hospitals that are ‘‘winners.’’
• Instilling a new culture of teamwork, self-examination and public accountability.
• Improving the quality and diversity of the workforce.
• Capitalizing on the changing demographics of management ranks.
• Balancing an internal business model with a commitment to the community.
• Maintaining good relations with various publics.
• Sharing important information with the community.
• Understanding that hospitals are agents for social change in their communities.
If we follow these principles, we will identify, correct, and prevent management
mistakes with the same relentless honesty, vigor, and staying power that we already
bring to reducing medical errors.
In the chapters that follow, you’ll be reminded that the trust of the public is a
precious asset; it accumulates slowly as the public realizes it is safe to invest its faith
and good will. Securing and retaining the trust of the public is as high a priority
as any hospital can set. Lose this trust through avoidable mistakes and miscal-
culations, and the price to be paid is more than our system can bear. For this
reason alone, even if a hospital’s connection to the community already is strong,
it must be bolstered. If it is weak, it must be strengthened. If it is broken, it must
be fixed.
The world of healthcare is much more complex and intimidating than in the old
days of TV’s Hope Memorial and St. Elsewhere. The leaders, executives, and
management teams running America’s healthcare organizations need to remind
themselves, their communities, and the entire nation of the true character of
America’s hospitals, of what we believe, and how we live those beliefs. This is
xiv Foreword

the real value of this book. If we are, indeed, who we say we are, the public’s
trust fully will be ours. It had better be – Ben Casey’s grandkids are counting
on it.

Dick Davidson
Washington, DC
August 2004
Preface

Acknowledging and examining mistakes in healthcare management is not a


pleasant or popular activity. Although clinical errors have received increasing
attention, executive errors have been largely ignored.
Our book is intended as a first step to address this lamentable gap in both the
healthcare literature and professional consciousness. By recognizing and reducing
clinical errors, healthcare organizations have improved not only the quality of care
but also clinical outcomes. Additional benefits can be achieved from similar
scrutiny on the administrative side if we are candid about management mistakes
and become much more diligent in correcting and preventing them. Through a
combination of chapters and cases, along with commentaries, we want to stimu-
late current managers in hospitals and other healthcare organizations to learn
from their previous mistakes and to become more systematic in avoiding their
recurrence.
We begin by admitting that a management mistake is not always easy to
recognize and define, and that some mistakes are unavoidable. The sources and
causes of errors are, however, very clear. Furthermore, as in medicine, mistakes can
be the result of acts of omission as well as commission. Disclosing mistakes and
developing effective coping techniques are emphasized as essential prerequisites to
improving management performance.
John Abbott Worthley (chapter 2) explores the context of management mis-
takes by distinguishing eight major aspects: legal, organizational, financial, poli-
tical, professional, ethical, social, and psychological. He provides a robust
conceptual framework for understanding and addressing mistakes.
In chapter 3, Wanda J. Jones focuses on a number of critical factors involved in
identifying and classifying mistakes, dissecting and divulging them, and dealing
with the fear of retribution. Throughout her discussion, she provides vivid
examples of management mistakes and their consequences.
Because medical and executive errors usually occur within a complex organiza-
tional setting, Carol Bayley (chapter 4) suggests that management can benefit by
xvi Preface

drawing on the insights produced by the longer history and more extensive
experience of clinicians in dealing with their mistakes. Contrasting the ‘‘blame
and shame’’ approach with a newer understanding of responsibility for error
reduction, she explains why and how cultural issues can play such a critical role.
John A. Russell and Benn Greenspan (chapter 5) draw on their respective
backgrounds in managing large and diverse healthcare organizations to provide
the reader with an effective framework to deal with the inevitability of executive
errors. Their approach is based on lessons learned from personal and career
examples of management mistakes, and they offer recommendations designed to
correct and avoid mistakes, and to reduce their impact.
Ultimately, according to Emily Friedman (chapter 6), confronting management
mistakes is a matter of accepting accountability. She explores the psychology of
accountability, discusses the implications of various scandals in both the health-
care and non-healthcare industries, and proposes specific steps for producing
accountable leaders and establishing accountable organizations.
These six chapters provide a comprehensive overview of the problems created
by management mistakes in healthcare and how they can be identified, corrected,
and prevented. Each chapter includes brief descriptions of various mistakes, small
and large.
Circumstances associated with a particular situation are almost always compli-
cated by a host of political and other considerations, and the mistakes are rarely the
result of only one decision. Consequently, to illustrate these complexities, seven
cases (prepared by Frankie Perry and based upon actual events but in fictitious
institutions) are presented, followed by commentaries from leaders in the field
(chapters 7–13). These leaders were asked to answer the following questions:
(1) What management mistakes occurred in this case? (2) How could they have
been avoided? (3) What steps could be taken within this organization to prevent
these kinds of mistakes in the future? To determine whether the cases and their
analyses were relevant to healthcare executives in the United Kingdom, we also
asked two distinguished UK experts to provide their perspective (chapter 14).
In our concluding chapter 15, we highlight common themes, offer some
admonitions, and suggest why and how examining management mistakes can
make a significant difference in the delivery of healthcare. Given the absence of
research and the paucity of publications concerning this important issue, we hope
others will be motivated to pursue the topic further.
Acknowledgments

We are grateful for this opportunity to address a topic that has not received the
attention it deserves. In addition to thanking our colleagues who generously
agreed to serve as contributing authors, we want to convey our sincere appreci-
ation for the time and candor of others who were willing to describe management
mistakes that formed the basis of our case studies. We are also thankful for the
invaluable assistance of Pauline Graham, Commissioning Editor, Science,
Technology and Medicine, and Barbara Docherty, our copy-editor, at
Cambridge University Press.
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