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Why rationalization decisions stall (and 4 ways to reach the right decision)

By Sebastian Beckmann

November 5, 2020

    Service rationalization—often called service closure or consolidation—helps achieve growth, boost quality, and bring costs under control. But the decision to rationalize, no matter how justified, can quickly become political and stall over endless debate. This is because the process requires you redirect resources to where they will be most valuable.

    Advisory Board's Phoebe Donovan and Sebastian Beckmann explain why that is—and how a mindset shift can help you reach the right consolidation decision quickly and with buy-in from your colleagues.

    Oftentimes, leaders proposing a rationalization of services rely on an overwhelming amount of data to present their pitch to their colleagues. This strategy stifles meaningful debate and puts skeptical leaders on the defensive. Ultimately, the discussion is redirected away from the challenge at hand. 

    4 steps to reach the right consolidation decision

    System leaders need a more collaborative approach to ensure they can execute on these difficult decisions. Instead of pitching a solution, engage your team in solving a problem. We think of this process in four stages:

    1. Make the case for change: To build consensus from the start, demonstrate why the current state is unsustainable. Use data to pinpoint exactly where there is underperformance.

    2. Identify your root problems: Explore the challenges preventing you from achieving your goals. For example, if a facility is seeing year-over-year volume declines, the root problem could be that two facilities are competing for the same patients.

    3. Rank the different solutions: Compare each solution's opportunities and risks, gathering input from each team member.

    4. Address the risks and reinforce your goals: If rationalization is the right strategy, work through how risks will be mitigated. For example, how will you retain patients who now need to travel further for care?

    Even if all members don't agree that rationalization is the best answer, the logic behind why it is a necessary step is transparent, and that transparency helps fend off ongoing debate about the solution. 

    It's also important to note that this process may not lead to a decision to rationalize. Leaders should see this as a benefit rather than a drawback because you're more likely to identify the right path forward. Regardless of the decision reached, you also gain buy-in from system and site executives. This sets you up for long-term success because your next challenge is to cascade the decision to facility leaders for implementation.


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