At the Margins

How Scripps rooted out $50M in unwanted variation through 'matrixed' management

Jordan Stone

In their efforts to bend the cost growth curve, we've seen many of our members launch standardization initiatives, hoping to operate more efficiently and with fewer cases of unwanted variation.

These individual initiatives can potentially address multiple sides of the organization, from clinical processes to administrative protocols, but the work of scaling them across the entire organization often requires an additional layer of accountability—if not a different in kind approach to management—to achieve meaningful results.

At Scripps Health, senior leaders were able to translate one of these approaches, termed "matrixed accountability," into a self-sustaining mechanism that drove cost savings of close to $50 million in just one year.

Scripps gives facility leaders enterprise-wide responsibilities

Scripps Health, a progressive four-hospital, five-campus system in San Diego, Calif., was able to expand its initiatives by assigning matrixed accountability across its senior management team, defined as oversight responsibilities for a particular facility and management responsibilities for one of four new enterprise-wide divisions.

Matrixed management

Leaders within one of these horizontal groups, the corporate medical division, evaluated practices related to physician co-management, nursing, quality and outcomes, and research to improve performance across all Scripps facilities. This has allowed for consistent review of processes across the system and even today enables Scripps to develop best-in-class, enterprise-level standards used at each facility.

Standardizing a culture of performance improvement

But the force driving standardization is not only provided by senior leadership—the matrixed management structure at Scripps has generated a pervasive culture of performance improvement at all levels of the system.

Once implemented, service line leaders began to collaborate with peers at other facilities on issues ranging from budgeting to staff allocation. Department administrators met to compare processes and shared best practices on everything from equipment use to patient flow. Eventually, individual employees began sharing best practices across the system to enhance frontline protocols—and without any guidance or direction from their managers.

To date, Scripps initiatives under matrixed accountability have spanned a wide array of services and departments, ranging from labor utilization to care delivery. Though pleased with the $50 million savings realized in the first year, the organization is aiming to increase operating income by more than $60 million over baseline expectations for three consecutive years.

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