Based in Walnut Creek, California, Healthdyne is a health maintenance organization (HMO) that provides healthcare to the northern California Bay Area. It serves approximately 1.2 million enrollees composed mainly of upper-class, white-collar professionals. Healthdyne occupies a relatively small corner of the market, but is quickly gaining prominence in the area and has developed a solid financial footing with bright prospects. It is located in a growing community, with a 15 to 20 percent annual growth rate projected for the next five years.

For the past 20 years, Healthdyne’s former president, Amanda Huggins, has successfully carried out the organizational mission—to provide more affordable and better quality healthcare for its members by setting the statewide standard for excellence and responsiveness. As one of the key players in the organization since its inception, Ms. Huggins is a recognized expert in the managed care industry. Corporate legend has it that her motto was “It doesn’t happen without my signature!” Upon Ms. Huggins’s retirement, Arnold Brice was recruited to take her place.

When Mr. Brice, who is the former CEO of Atlantic Healthcare, was brought in as president, he inherited an executive staff composed of the vice presidents of the marketing, finance, and professional services departments as well as a medical director, all of whom were capable of fulfilling their managerial responsibilities. However, within a few weeks of joining Healthdyne, Mr. Brice perceived a serious flaw with his staff—none of the vice presidents would make a decision, not even on routine matters such as personnel questions, choice of marketing media, or changing suppliers. The vice presidents frequently presented him with issues in their areas of responsibility and requested that he make the decision. This troubled Mr. Brice. Before long, the situation seriously impeded his efforts to engage in strategic planning for the HMO.

At a regular staff meeting, when every member of his staff had an issue that required his attention, Mr. Brice finally blew up. The catalyst to this incident was this question from the Finance vice president: “What font do you want this in?”

Waving his arms in exasperation, Mr. Brice shouted, which is very uncharacteristic of him, “I cannot do it all! You are going to have to make these decisions yourselves.”

The meeting broke up with the staff looking very puzzled and Mr. Brice realizing that he had to make serious changes.


At First Medical Center (FMC), the goal for the past decade has been to simultaneously improve quality and patient safety by implementing projects, initiatives, and programs either focused on an organizationwide intervention or targeted at one department, unit, or floor within the organization. This effort has resulted in a piecemeal approach to quality improvement, with one intervention layered on top of another. FMC’s newly appointed chief quality and patient safety officer, Dr. Emily Frame, believes they can do better.

Emily sees a major opportunity to centralize and standardize quality initiatives through a systemwide initiative focused on both cultural change and quality improvement. Specifically, she wants to implement the Crew Resource Management (CRM) program across all units of FMC. CRM is a systematic approach to training leadership, staff, and physicians, and it incorporates customizable safety tools aimed at generating permanent culture change around patient safety. Emily is aware that adopting a unified approach to safety and quality improvement will require significant organizational change, but she believes the long-term results will justify the expected difficulty.

Given the circumstances at FMC, Emily believes that the first challenge will be to get the leaders of the institution to understand that a gap exists in patient safety and to recognize the opportunity for improvement. She is well aware that cultural transformation needs engaged leadership, and she knows that only through shared vision and purpose can such widespread programs succeed. If leaders are not engaged and supportive, the program will struggle to get off the ground, making the desired transformation virtually impossible.

Another major challenge related to executive leadership buy-in involves the financial resources necessary for implementation. Healthcare organizations have a large number of competing financial priorities, not the least of which are training and education. Training for CRM requires dedicated time away from patient care (between two and four hours), so the organization will have to backfill that nursing and physician care time. Once put into practice, however, CRM has the potential to save money by averting patient safety events. The research literature provides some evidence for these savings, particularly in critical care and surgery specialties, though systemwide implementation has never been studied. CRM has to be seen as value added and a top priority for the organization and the care of its patients.

An additional area of concern for Emily involves how she will be able to measure success. If CRM aims to improve teamwork and promote a culture of safety, how can one prove that it works? What metrics would FMC leaders, providers, and patients regard as indicators of success? As Emily well knows, cultural transformation is hard enough to define, let alone measure.

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