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Volume 16, Number 6: Faculty Focus
June 2010

Listen to a 5-minute interview with Professor Murray Bryant on what business principles can be applied to health care   Listen (4.7MB)   Subscribe

Health care is one of the largest sectors in Canada, with approximately 43 cents of every taxpayer’s dollar going to fund it – or 12 per cent of the GDP. Due to its rapid growth, health care is expected to consume about three-quarters of every dollar spent by the provinces, within 25 years. In light of that growth, there’s a critical need to implement business practices that will streamline health care delivery and bend that cost curve backwards. Dawn Milne recently sat down with Professor Murray Bryant, a member of the Southwest Local Health Integration Network, to discuss what business principles can be applied to health care. Dawn started by asking him why there is a need for leadership management in health care.

A. Health care is probably one of the most complicated areas of economic activity. You’re dealing with patients who have often very complex problems. But we’re not applying enough evidence-based decision-making in either clinical work or in administrative processes that associate with clinical work. Health care needs business principles because a lot of what is done in health care is processing people and passing off an individual to another individual. We organize activities for the benefit of the provider, not for the convenience of the patient.

What further complicates it is the debate between should it be privately funded –publicly funded. We have essentially already a mixed system. We have a largely publicly-funded system and largely a publicly-delivered system, although physicians, who are a critical part, are in fact independent contractors. That creates huge challenges. Not that physicians are not aware of the need to change, but they need to have buy in. And so that requires unbelievable leadership skills on the part of the leaders in health care. In my view, the current growth in health care spending is a non-sustainable cost and therefore we have to make sure that we find business practices that can aid the delivery of care.

Q. What business principles can be applied to health care?

A. Actually teaching leaders in health care that they are not administrators – they are leaders. And, therefore, they have to be engaging, enlisting, empowering people to make the necessary changes and be a force for delivering change in the system.

The other issue of business practices is health care organizations should be learning from those in the business sector who are leaders. Too often, health care looks inside itself and not that they are actually running a very complex business.

The third element of business principles is there will always be an inadequate amount of money in the health care system. But, what we have to make sure is that we’re spending dollars in the right way. Can we find ways to spend our money in prevention rather than after the fact fixing the problem?

Q. How can applying business principles to health care address the cost curve?

A. Instead of looking at just outcomes, we start measuring system outcomes. We start measuring system performance. That means we need new forms of alliances between organizations and that will require management, not management of resources, but real leadership in terms of saying, “let’s make sure we deliver the best possible care we can within the resources we have available to us?”

Q. What are some of the challenges you’ve encountered in leadership management in health care?

A. Organizations saying, “we’re not ready for another change.” Well business has to change all the time. We need to have a philosophy of change built in to the leadership capabilities of all leaders. We need leadership at the federal and provincial levels that this is the biggest challenge that confronts Canadians.

That was Murray Bryant, associate professor of managerial accounting and control at the Richard Ivey School of Business.