Ronald Heifetz of the Harvard Kennedy School has argued that organizations experience two main types of change: technical and adaptive. Technical change in an organization is generally easier because the problem is clearly defined and the right solution can be achieved using existing skill sets and a known playbook or methodology.
An example of technical change in healthcare would be implementing a new electronic health records system. This may be a large, expensive, and difficult undertaking, but it is still technical in nature. The problem is clearly defined, requirements can be determined, and a solution will be chosen and delivered. At the user level, your people are mapping their established workflow onto a new process and interface, but they aren’t reinventing their jobs. Thus, while replacing your EHR system isn’t an easy thing to do, it poses less of a challenge than an adaptive change.
Adaptive change is more difficult because the precise problem and solution are difficult to define, and the organization must engage in a period of learning before the appropriate change can be identified and implemented.
Adaptive changes are typically aimed at broader, more open-ended goals. For example, changing patient payment behavior requires adaptive change. Technology is surely part of the solution, but the change must go far beyond technical measures. Before stakeholders can even begin implementing a solution, they need to identify the exact problems that are negatively affecting patient payments in the first place.
Applying Adaptive Change to Patient Financial Engagement
At Loyale, we find it immensely helpful to apply portfolio management strategies such as segmentation for patient financial responsibility. By doing so, we’re able to identify why patients don’t pay. Is it that they are they unable to afford care, or are they simply unwilling to pay? When you understand the probable reasons behind patient behavior, it’s possible to apply predictive analytics to determine each patient’s propensity to pay, prescribe a realistic payment timeline, and even define the best strategy for follow-up communications to maximize the likelihood of collecting in full.
This is the beginning of a process of adaptive change. Ultimately, it will require multiple stakeholders across your organization to adjust how they do their jobs. And, the biggest adaptation of all may be on the patient’s part!
Most Americans aren’t prepared for an unexpected medical expense of more than $1,000—which is well below the threshold for most high-deductible insurance plans. For providers, getting cost-conscious patients to participate in financial planning and manage their medical bills as part of the household budget is a massive challenge. However, it is manageable when you apply the principles of adaptive change.
Heifetz, writing in the 1990s, was already warning that companies were facing more and more adaptive challenges, and that both employees and executives would need to “unlearn” certain behaviors and embrace new roles, responsibilities, and relationships. Since then, the pace and intensity of adaptive challenges have grown exponentially as the world has become more connected and complicated.
For anyone in a position of leadership, there’s always a temptation to view any big-picture changes as a threat. However, in the case of patient financial engagement, we believe the opportunities greatly exceed the challenges, and companies that successfully adapt to the patient-driven market will be richly rewarded with increased loyalty, revenue, and a burnished reputation for excellence.