Change Management in Healthcare: Examples, Models, & Pitfalls

It’s cutting edge. It’s high-tech. It’s disruptive. 

It’s…healthcare!

While healthcare has notoriously lagged behind finance and retail in modernizing consumer care and service, those days are ending. Patient-centric modernization is now inevitable. How will you manage change in your organization? A change management plan can prevent your grand plans from descending into chaos and acrimony. 

Some changes coming to a healthcare organization near you include:

• AI in operations: Early adopters are wasting no time. Epic uses ChatGPT to process some health records. Google Cloud now offers AI-enabled prior authorization processing, and Doximity, a telemedicine platform, has started using a ChatGPT tool that can draft preauthorization and appeal letters. 

• Patients as payers - Before the widespread adoption of high deductible healthcare plans (HDHPs) 10 percent of provider revenue came from patients. Today, however, patients have become responsible for more than 30 percent of provider income — enough to make or break a practice, group, or healthcare system.  

• Value-based medicine: research shows that value-based care achieves better patient outcomes at a lower cost. This research has prompted the Centers for Medicare and Medicaid to insist all their beneficiaries use value-based care programs by 2030. Some commercial payers, too, are starting to press providers to adopt value-based care strategies. 

• Patient pay estimates - While the No Surprises Act mandates pre-service patient pay estimates for self-pay and uninsured patients, some healthcare organizations are providing upfront estimates even for their insured patients. With patients now price-shopping their healthcare services, providing these upfront estimates could be a competitive advantage. In fact, comprehensive pre-service patient pay estimates could be considered a pre-emptive strike, engendering patient appreciation. 

• Patient-centric payment solutions - It might surprise you to learn that 70% of people 55 and older are comfortable paying bills online, typically via email. Given that 42% of patients 18 - 34 prefer to pay via text, however, text could eventually overtake even email payments.   

• Technology and outsourcing replacing in-house staff - Of 205 IT executives at U.S.-based healthcare organizations surveyed by Tech advisory firm IDC and Redox just last month, 88% stated they will increase third-party tech spending in 2024. In contrast, in a move to cut operational expenses, organizations like Kaiser Permanente, Novant Health, and TowerHealth and more are depending on outsourcing to cut in-house IT jobs.  

• Ballooning data: with the proliferation of data-gathering medical devices, genetic testing, and patient-generated health data, the American Hospital Association tells us that healthcare data has been increasing by 47 percent per year. How would you make sense of these critical data points? 

• Competition from non-traditional health providers like Amazon, CVS, and Walgreens - Non-traditional providers are filling in the gaps traditional providers have failed to provide: convenient, easy to navigate, personal experiences. Providers who link their specialists to the CVS Minute Clinic or Amazon’s OneMedical can participate while they work to create their own patient-centric interfaces. 

Change is afoot and tiptoeing into your organization sooner rather than later. As Valerie DeCaro, VP RCM, DOCS Dermatology shared with us recently, 

“Healthcare is currently in a huge state of disruption. Change is hard. Getting your groups onboard and then motivating them to be successful takes careful planning. The change occurring fuels the high attrition rate. The big changes are the shift from payer payments to patient payments, and the lack of patient understanding about their HDHPs.  It turns into bad debt for providers, and costs to collect are high.” 

While these evolutions can feel intimidating, you don’t have to face change alone. Here you’ll find the practical frameworks you need to put some clarity onto the chaos that can arise from a shifting healthcare revenue landscape. 

What is change management in healthcare?

Change management in healthcare is the approach or process you undertake to ensure smooth transitions through the implementation of new technologies, changes in workflow, or adoption of new healthcare protocols. Proactive change management keeps disruptions at a minimum and supports staff in maintaining high standards of patient safety.

Effective change management in healthcare not only involves the technical aspects of implementing new systems or processes but also addresses how staff must change former habits. It helps train healthcare professionals to adjust to new roles while maintaining morale during transitions. The aim is to ensure that staff are not only aware of the changes but are also equipped and motivated to leverage them to benefit both patients and the organization. This holistic approach helps in minimizing resistance, a common obstacle to change.

Poorly managed change can lead to confusion, errors, decreased staff morale, and resistance to new procedures, all of which can adversely affect patient care. In the worst scenarios, it can result in operational disruptions and compromised patient safety. Therefore, strategic change management is not just a preference but a necessity for healthcare organizations to adapt effectively to the evolving landscape of healthcare delivery.

Examples of change management in healthcare

Some erroneously believe that change management efforts take too long, and don’t last. These case studies reveal the value proactive change management brought to the healthcare organizations involved. 

Case Study #1: Mercy Hospital

Mercy Hospital System is the fifth largest Catholic Healthcare System in the United States. They have facilities in 4 states and employ over 40,000 people. When patient and provider satisfaction with scheduling and communication began plummeting, they implemented a change management system to address patient and provider dissatisfaction with scheduling. They decentralized scheduling from one hub to all local offices. 

To execute, they:

• developed a clear, compelling definition of the change and shared with all involved
• conducted a workflow analysis to identify all involved - the staff in the doctor’s offices.
• established who would be able to take on the new task of scheduling 
• built an interdepartmental communication plan
• established success measures

Results:

• patient visits up 11%
• patients rate front desk courtesy 5.3% higher
• timeliness of scheduling is up 8% (a significant challenge)
• call volume drops by 1500 calls per month, a dramatic staff time saver

Their change management plan kept them on track despite short-term glitches. 

Case Study #2

Following a significant merger, a prominent hospital faced challenges with delayed patient services and escalating operational expenses due to data inaccuracies. The IT Vice President engaged a third-party partner to devise and execute a change management plan. They aimed to improve patient data integrity and streamline its retrieval while adhering to financial and legal standards as the merger played out. With their data all over the place, mistakes were common. 

Their first step was implementing a temporary Sharepoint tool that would oversee the change management for this project over six months.

Ultimately, they developed and codified an enhanced policy and procedure framework for data requests and access, requiring collaborative decision-making among stakeholders in operations, security, and compliance.

Results:

• data access diminished from 21 days to 2 days
• interdepartmental collaboration improved
• departments and medical centers experienced smoother transitions 
• Patient satisfaction increased while physician frustration decreased

While the change management plan did take some time to implement, the consistency it offered fueled these dramatic results. 

Why change management is important

"When I let go of what I am, I become what I might be."  -Lao Tzu

The COVID-19 pandemic forced healthcare organizations to change almost instantly. As a result, hospitals and practices lost many clinicians and staff as people retired early or quit altogether. The stress, for many, was unbearable. Enduring so many changes so fast runs counter to all humans’ basic need for a stable environment.

Of course, with COVID, no one had the time or bandwidth to create and execute a change management plan. Hence, the bloodbath in the healthcare workforce. 

Why not just roll out change rather than take the additional step of creating a change management plan? First, patient well-being is on the line. Leaders must carefully control change to protect them.  

Then, having a change management plan just creates more success in reaching the new protocol, technology, or workflow objectives. One study involving interviews with 30 healthcare professionals revealed that organizational changes in healthcare succeed when healthcare professionals feel they:

• can understand and agree with the value of the change
• have the chance to carry out the change in a slow, methodical fashion
• have the opportunity to influence the change (possibly even initiate the change themselves)
•  feel prepared for the change
•  recognize the value of the change, including perceiving the benefit of the change for patients.  

All of these results arise when health leaders execute well-thought-out, documented change management. 

A lack of change management can lead to poor patient outcomes

Inadequately executed changes can lead to severe outcomes. Establishing a comprehensive and efficiently executed strategy for managing change protects patients. Your strategy should encompass the identification of possible hazards, a strategy to alleviate these risks, and the clear dissemination of information regarding these changes to all relevant parties.

Patients depend on healthcare providers for high-quality treatment, where technology plays a vital role. Inadequate deployment and examination of new technology and new protocols may lead to errors, posing grave risks to patient health. For instance, if a newly introduced medication management system is not correctly set up, there's a risk of patients receiving wrong medication doses or drugs, potentially causing negative reactions or, in extreme cases, fatalities.

Change management models in healthcare 

Kotter’s 8 steps for change management

One method is Kotter’s 8-steps for leading change and his book Change: How Organizations Achieve Hard-to-Imagine Results in Uncertain and Volatile Times has earned 4.5 stars on Amazon. 

 The steps include:

1. Identifying the “why” behind the change and communicate it. - Change leaders must obtain the buy-in of at least 75% of the organization’s management to drive effective change. Example: if a provider is losing new customers due to failure to provide patient payment estimates, they must reason out with evidence whether front office staff needs support from software, a third-party partner or new hires. Make sure staff and stakeholders all agree with this “why” or reason behind the issue. 
2. Engage core stakeholders at every level. Select people to act as your support system, including managers and supervisors. Example: if you are a management services organization and need to get all your provider groups onto one EHR for consistency, find a champion at every one of these groups to get behind this directive. This can be the physician, a revenue cycle team member, or another member of staff. Preferably several of these individuals. 
3. Develop a roadmap for the change -  Document a change management plan that outlines project milestones, deliverables, and contributing individuals. Example: handing healthcare underpayments detection over to software will involve staff training on the software. Good change leaders acknowledge staff concerns about taking time to learn a new platform. They also explain the support available to them via the software provider and through weekly check-ins with a manager. 

4. Gather staff and enlist a volunteer army to put the plan into action - Talk often about your vision and change implementation plan. Share the plan with all involved. Elicit and address employees’ concerns transparently. Use this vision at each step – from training to performance reviews. Staff buy-in is far too often missed when changes arise. Stakeholder engagement is built into every part of Kotter’s model. It’s one area that is crucial to any change management initiative. Example: rolling out a checklist for physicians when they list charges can be met with some resistance. Physicians think they know and understand how to accurately complete all charges. Share your vision of the extra revenue that can eventually come to them and the team when they follow the checklist. Start with one willing physician and share the results and improvements they’ve achieved. 
5. Enable action by removing obstacles and adapt as they occur - you will face some barriers to change. Identify your obstacles early and get help in breaking them down. Note: implementing change from top to bottom without staff input is often met with employee pushback. Example: a common problem with rolling out change is its slow nature. Complicate that with changes in leadership over time and new changes can be postponed, causing frustration and confusion. Be ready in case your roll-out is taking longer than expected or a key executive leaves. 
6. Acknowledge short-term wins -  Implementing change can be a long and frustrating road. Motivate employees throughout the change journey by celebrating short-term wins and achievements. Example: use gift cards as concrete rewards and internal messaging like Slack and your email newsletter to call attention to team players. 
7. Sustain acceleration - A large gap can fall between implementation and final adoption and execution. Don’t stop until the final change has been implemented. Example:  the beginning of a big change can be exciting. When inaccuracies and problems arise, stakeholders can become frustrated. Explain your plan to rectify issues and conscript staff members to help. 
8. Institute change - Ensure that change is supported long-term. Make it clear at the outset that this change is one of many ahead. Reassure all that continuous employee training methods will always accompany any new technologies or protocols. If you abandon your team members too soon, you risk them falling back into old practices and losing all the new muscle memory you fought so hard to build. Example: Encourage doctors using a new checklist to document all charges that they should train any new doctors in the protocol. This practice reinforces their habits. 

Objections to the Kotter Model for change

Like any other change management model, Kotter’s model has received some criticism. Some claim:

• The process doesn’t include enough detail
• Because of its sequential nature, missing a step can throw the team off
• It’s too much of a top-down model, limiting employee participation 

More change management models

McKinsey 7-S Change Model

Popular in healthcare, this model focuses on aligning seven key organizational elements: strategy, structure, systems, shared values, skills, style, and staff. It focuses users on how these elements are interconnected and how their synergy can power effective change that will benefit patients and providers

Unique feature: Contrary to models that primarily concentrate on the change process, the McKinsey model underscores the significance of synchronizing different organizational components to facilitate the change, thereby ensuring it is comprehensive and cohesive.

Find a comprehensive discussion of the McKinsey 7-S Change Model here. 

Lukas et al.’s Organizational Model for Transformational Change in Healthcare Systems

This model is specifically designed for healthcare systems, emphasizing transformational change and the unique challenges faced in healthcare settings.

Unique feature: It's tailored to the healthcare industry, considering its complexity and the diverse interests of various stakeholders such as patients, doctors, nurses, and administrators.

Find a comprehensive discussion of Lukas’ Organizational model here.

Prosci ADKAR Model

This model addresses change at an individual level, focusing on Awareness, Desire, Knowledge, Ability, and Reinforcement (ADKAR). It's often used for managing personal transitions during organizational change.

Unique feature: ADKAR focuses on the individual aspects of change, setting it apart from other models. It emphasizes that successful organizational change is the result of successful individual change.

Find a comprehensive discussion of Prosci ADKAR Model here.

Lewin's Change Management Model

 Developed by physicist and social scientist Kurt Lewin, this model involves three stages: unfreezing, changing, and refreezing. It's about preparing for change, making the changes, and then solidifying those changes as the new norm.

Unique feature: Lewin's model is more linear and simplistic, focusing on the transition itself. It is particularly useful for understanding the human side of change management

Find a comprehensive discussion of Lewin's Change Management Model here. 

The choice of a change management model in healthcare should be based on the specific needs and context of the organization, as each model has its strengths and focuses on different aspects of change management.

Common pitfalls during change management

Don’t let these common pitfalls divert you from your modernization and optimization missions. Be ready with plans to remedy the following common issues. 

1. Resistance to change: Let’s face it: drastic changes have roiled healthcare since the beginning of the COVID-19 pandemic. People are exhausted from changes. Concerns over job security, increased workloads, or doubts about the benefits of the proposed changes can sap staff motivation. Individuals can be more apprehensive about what they think they will lose rather than the change itself. Do a check on what stories stakeholders are telling themselves about the changes. Work to contain wild hypotheticals. 

2. Poor communication: Faulty communication can lead to misunderstandings, confusion, and a failure to secure stakeholder support. It's vital for leaders to continually emphasize the necessity and rationale behind the change, connecting people to the "why" behind the transformation, as mentioned above.

3. Resource constraints: A shortage of funding, personnel, or time will obstruct the successful execution of change initiatives.

4. Weak leadership: The absence of decisive and visible leadership can weaken the change management process, leading to a lack of direction or enthusiasm. Leaders need to be consistently present, clearly outlining the nature of the change, its reasons, and its effects on employees and patients.

5. Organizational culture barriers: A deep-rooted culture that is resistant to change can impede the adoption of new ideas and methods. Leaders have a significant role in molding and opening the organization’s culture so that it embraces rather than resists and fears change.

6. Planning deficiencies: The lack of a comprehensive, well-thought-out plan can result in ineffective implementation and failure to achieve goals.

7. Insufficient stakeholder involvement: Not engaging stakeholders in the change process can lead to opposition, diminished collaboration, and poor decision-making.

8. Misalignment of incentives: If performance metrics or reward systems do not align with the change initiatives, it can pose challenges to successful transformation.

9. Overwhelming change: Particularly prevalent in healthcare, organizations experiencing numerous changes concurrently may suffer from change fatigue, leading to disengagement, burnout, and resistance. It’s important to consider the pace of change and the capacity of individuals to assimilate new changes.

10. Poor measurement and monitoring: Failure to properly track progress or evaluate the impact of change initiatives can hinder the ability to adjust strategies, sustain momentum, and demonstrate successful outcomes.

Changes in healthcare organizations are inevitable

Drastic change is ahead for nearly every healthcare organization. Healthcare leaders at management consultant giant McKinsey & Company, warn us that soaring healthcare costs are becoming increasingly burdensome to patients. McKinsey also shares that financial concerns prompt patients to avoid necessary medical care. When 34% of patients defer care due to a perceived lack of affordability and a $10 increase in the appointment cost prompts them to avoid it, not all patients are getting appropriate care. 

How will we organize our systems so everyone can afford healthcare? And so providers can afford to provide it? 

The good news is that McKinsey firmly believes healthcare organizations can succeed and reach profitability. 

“Those who thrive will tap into the $1 trillion of improvement available by redesigning their organizations for speed to accelerate productivity improvements, reshaping their portfolio, innovating new business models to refashion care, and reallocating constrained resources. The healthcare industry has lagged behind other industries in applying these practices; players that are able to do so in this crisis could set themselves up for success in the coming years.”

Changes to make now

MDClarity can usher you through several important changes sweeping the healthcare industry: the need for patient payment estimates generation and payer underpayment detection.

Generate accurate estimates and improve upfront collections 

2022’s No Surprises Act mandates that providers deliver good faith estimates to self-pay and uninsured patients. Some providers believe the future will include delivering patient pre-service estimates to all patients, including those with insurance. After all, given the ubiquity of high deductible healthcare plans, patients’ financial responsibility has risen significantly. Have you established a patient pay estimate protocol yet?

 MD Clarity’s Clarity Flow can accurately estimate patient responsibility and generate a complete estimate, sending it automatically upon scheduling. With Clarity Flow, you get accurate estimates completed without any clicks or other manual involvement from staff. Quick turnaround frees your staff to complete more high-value tasks, which increases patient satisfaction and, of course, keeps you compliant. The estimates provided by Clarity Flow feature a hyperlink to a digital platform, enabling patients to either deposit an initial amount or settle the full invoice in advance. 

Detect and pursue underpayments with MD Clarity

In today’s merger and acquisition environment in healthcare , buyers and investors are scrutinizing healthcare organization records and financials. 

You can show them you are determined to collect all the revenue you’ve earned. MD Clarity's RevFind identifies, reclaims, and addresses underpayments. It meticulously compares each payment to the agreed contract terms, automatically highlighting any inconsistencies or possible underpayments.

Utilizing established expert guidelines, analyzing variance reports, and identifying irregularities, RevFind simplifies and streamlines the process of detecting underpayments. This tool not only uncovers underpayments but also assists in the recovery process and pinpoints fundamental issues to avert future underpayments. Request a demo to see how RevFind or Clarity Flow can improve your net revenue and operations today.