Management Lessons from Mayo Clinic

Dörthe PrestelBUS 550 Minder ChenMay 24, 2011

Practicing destination medicine

Historical Background Dr. William W. Mayo, settled in Rochester, MN, in 1863 sons, Drs. William J. Mayo and Charles Mayo, joined 1883

/1888 1893 patients came from 11 different states to receive medical

care 1914 Mayo Clinic world's first integrated private group practice

was found 3 campuses: Minnesota; Arizona; Florida 1983-2003: number of physicians & scientists increased from

838 to 2,700 Number of employees increased from 6,000 to 42,000 Patient care revenue increased from $345 mill to $4 bill

2003: 500,000 patients served at 3 campuses

How it worksMayo clinic is not a single-specialty boutique but rather a department store of medical care capable of addressing virtually all medical needs from cancer care to cosmetic surgery to joint replacement or organ transplantation

MissionTo inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.

3 Key Principles Continuing pursuit of ideal service, not profit Continuing sincere concern for the care and

welfare of individual patient Continuing interest by every member of staff

in professional progress

Human Resources Top of talent pool: team players,

commitment to high quality care and service, positive attitude, strong work ethic, understanding of cultural diversity

Hiring for life: behavioral interviewing techniques > extensive, expensive process

Employees are salaried, no incentive payments > unbinding self interest

Technology / Infrastructure 1 1907 implementation of medical

records and MR numbers 1914 Conveyance systems to move

medical records 1928 lifts and chutes system Strategic investment of millions of

dollars each year in industrial engineering

Technology / Infrastructure 2 Starting in the 1990s, in 2005 EMR

replaced paper charts In- and outpatient records are instantly

available to Mayo caregivers via 16,000 computer terminals on site

7.5 million transactions processed between 8-9 am

Around noon up to 15 million transactions

Scheduling 1 Rapid growth in 1950s urged development

of central appointment desk (CAD) Initial system adopted from railway

company Pullman 1950s: card system 1960s: telephony system replaced card

system

Scheduling 2 1970s: computer technology with

software ideas from Boeing and NASA to accommodate complex rules of Mayo schedulers

establish time intervals between appointments and determine length of appointment types < using stop watches

2005: genetic algorithm system

Strategy Branding a labor intensive services company Health management is the key business

strategy - identifying population health concerns, targeting those issues proactively, and gathering the information needed to measure progress over time

Marketing strategy: customer and employee satisfaction, Facebook, and Podcasts

Collaboration EMR, internal paging, telephone and video

conferencing, physical spaces that encourage communication

Using cross-functional teams > using Six Sigma and Lean

net operating income increased by 40% in 3 years

85% of patients complete clinical itineraries in 5 business days

Radiology department reduced time per appointment by average of 6 minutes

Team Leadership Model Physician-led institution: clinical practice, education,

research Physicians experience learning-by-doing leadership

training at the clinic while practicing medicine Physician leader + administrator = marriage Administrative partner = management coach,

confidant, reality checker, implementer Balancing business-vs.-caregiving tensions Teaching for tomorrow’s patients – its okay for highly

trained providers to ask for help > strong collegial attitude

Destination Medicine Each year 140,000 patients travel more than

120 mi to receive medical care at Mayo Clinic Patients receive efficient, time-compressed

care that can usually provide definite diagnosis and sometimes initial treatment – including major surgery – within 3 – 5 days

Scheduling system is backbone of destination medicine

Learning from Mayo 1 Customer demand is unevenly spread Customer needs are diverse Speed and accuracy are essential to performance Multiple service providers contribute to customer’s

service experience Service chain is complex

Combining talent where its needed, encourage and enable internal communication, foster organizational competence

Learning from Mayo 2 Molding firm’s resources and talents to each

individual customer Practice “patience” hiring Invest in systems that help employees practice

well and encourage to teach coworkers Continuously stress organizations core values

Candidates for organization designs like Mayo: high reliability organizations – atomic energy plants, aircraft carriers, petrochemical plants

Conclusion Cutting edge advantage of Mayo – TIME! Mayo clinic is constantly working on solving

the customer’s whole problem, using technology to support values and strategy, and innovating with systems engineering

However, Mayo Clinic does not work flawless – 85% success in their goals

How will they be affected by healthcare reform?

QuizWhich of the following is NOT a success driving factor for Mayo Clinic?a) Strong organizational cultureb) constant innovationc) Time efficiencyd) Location of their campuses

Thank you for listening.

Works Cited http://www.mayoclinic.org/rochester/?

wt.srch=1&wt.mc_id=google&keyword=minnesota_Mayo_Clinic_Mayo_Clinic&campaign[...}

http://bush.tamu.edu/nonprofitspring09/PresentionBerry.pdf

http://ftmba.tamu.edu/research/publication/951/