Analogy Test: Cleveland Clinic is to VA Hospitals … as Apple is to what?

It’s a simple analogy … and, apparently, the Cleveland Clinic’s CEO got it right.

Answer: JC Penney

VA-JCP logos



Here’s my logic …



In case you missed it, the Obama Administration reportedly reached out to Dr. Delos M. Cosgrove, the chief executive of the Cleveland Clinic to take over as secretary of the Department of Veterans Affairs, managing the VA Hospital system

First, I’m delighted that the insular Administration was looking beyond the usual population of political hacks to get an experienced healthcare executive.

But, when I saw the press reports, I was stuck by the similarity between the VA and JCP situations.

JCP was (is?) in decline … an outdated retail brand with a sprawling network of inefficient stores with an entrenched, slow-moving, centrally-managed bureaucracy that lost sight of its customers.

To shake up the system and the culture, JCP brought in Ron Johnson – a wunderkind marketer from Apple.

Johnson failed.

Not because he and his ideas weren’t good, but because JCP was, in fact. an outdated retail brand with a sprawling network of inefficient stores with an entrenched, slow-moving, centrally-managed bureaucracy that lost sight of its customers.

It wasn’t Apple with sexy state-of-the-art products, a penchant for innovation and cadre of energized employees … and, oh yeah, a small network of retail outlets.

Johnson didn’t stand a chance.

Ditto for Dr. Cosgrove who pulled his name out of the hat last weekend.

Thinks about it.

The Cleveland Clinic has a long-standing, well-deserved reputation as a top-tier healthcare provider.

The VA? Not so much.

The Cleveland Clinic has a roster of the top doctors in the country … la crème de la crème.

Do the best of the best gravitate to the VA?

Maybe, but I kinda doubt it.

According to the NY Times, Dr. Cosgrove currently runs a $4.6 billion enterprise that includes the Cleveland Clinic, nine community hospitals and more than a dozen family health and outpatient surgery centers, as well as a hospital in Florida and a hospital being built in Abu Dhabi, United Arab Emirates.

In contrast, The VA runs one of the nation’s biggest health care systems, a far-flung operation that treats 6.5 million people a year at 151 hospitals and 820 outpatient clinics. It has more than 18,000 doctors and an annual budget of more than $57 billion.

The VA employs more than 320,000 personnel to run 151 major medical centers, 820 outpatient clinics, 300 storefront ‘Vet Centers,’ more than 50 regional benefits offices, and scores of other facilities.

Based on my experience, it’s a lot easier to run 25 operations than 150.

A relatively small network of operations can be managed via “visual flight rules” … a sprawling networks needs management systems and an effective management organization … that makes things happen in accordance with sacrosanct, overarching operating principles.

Does that characterize the VA Hospital system?

According to the WSJ, Kenneth Kizer – who led a VA-improvement wave in the 1990s — and Ashish Jha of Harvard — a staff physician at the Boston VA – VA has a “toxic milieu” as the result in part of “increasingly centralized control of care delivery and associated increased bureaucracy.”

Drs. Kizer and Jha observe that the VA’s performance measurement programs of the 1990s have swollen from two dozen metrics to “hundreds of measures with varying degrees of clinical salience” whose use “not only encourages gaming but precludes focusing on, or even knowing, what’s truly important.”

The central-office management in Washington has grown to 11,000 workers from a mere 800 two Presidents ago, and the vast bureaucracy has taken over decisions that used to be made in autonomous regional centers.

Kinda sounds like JC Penney, doesn’t it?

My bet: Dr. Cosgrove drew the analogy … and didn’t want to be Ron Johnson (sans the “golden parachute”).

Too bad for me … if he had taken the job, I would have had fodder for a whole series of blog posts.


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