Becker’s Hospital Review recently published an article on five common management mistakes within health systems that lead to failure and business erosion. The first among those listed was inadequate development of the next generation of leaders. When organizations neglect to develop second-tier leaders who can replace outgoing executives, the organization can struggle. According to the article, “many great health systems with wonderful CEOs do not have the depth to steer and drive the organization for the next generation. In fact, this lack of depth in leadership often causes systems to look for strategic partners.”

According to a survey administered by the Society for Human Resource Management, employees indicated that the most important factor in their job satisfaction involved opportunities to use their skills and abilities. The article states that many health systems have been guilty of not allowing great leaders to thrive, and that “a core job of leadership is to constantly be grooming and working closely with great people so there are always opportunities available for those people to thrive.”

Another common error in leadership involves inadequate planning for rapid changes in health IT systems, including revenue collection systems. As a case in point, one successful hospital fell into bankruptcy due to “uncollectibility over a sustained period of time.” CMO of McKesson Enterprise Information Solutions, Michael Blackman, MD, recommends that providers anticipate and plan for their IT needs well into the future.

Failure to develop a strong marketing brand in conjunction with a business strategy is another common oversight. Many community hospitals have seen their businesses decline because they neglected to define and differentiate their services from competitors.

The article also notes the potential pitfalls of expansion plans. One hospital deemed “hyper-successful” added a second facility, but ended up splitting cases with the first facility. The initial facility, which was highly profitable, was in essence replaced by two facilities that were both significantly less profitable.

You can view the article at Becker’s Hospital Review: http://www.beckershospitalreview.com/hospital-management-administration/5-core-management-mistakes-in-health-systems-key-causes-of-failure-and-business-erosion.html