Healthcare Change Management: Strategies for Success

Chris Calderone, Senior Thought Leadership Manager

Thursday, May 25, 2023

Healthcare providers continue to navigate a host of challenges from rising costs to chronic labor shortages as the entire healthcare industry undergoes fundamental change. Increasing costs, an aging population and the instability of government payer programs, combined with growing consumer needs, are driving unprecedented industry change that will have a major impact on health systems and hospitals.

Many healthcare organizations are embracing the idea of transformative change as they seek to achieve sustainable improvements. The critical success factor when it comes to improvement is the willingness and the ability to effectively manage change – organizations that successfully manage change are more likely to realize long-term sustainable success.

By embracing proven change management tactics and principles, healthcare organizations can navigate the complex and evolving healthcare landscape, achieve desired outcomes, and prepare for future challenges and opportunities.

This article will explore the factors that are driving industry changes; discuss common challenges in healthcare change management and review the importance of vendor credentialing as part of an overall improvement and change approach.

Additionally, this article will summarize various change management models and approaches, summarize methods for measuring the impact of change initiatives and review a few important factors to consider when preparing for the future of healthcare delivery.

Table of contents

The importance of change management in healthcare
Factors driving change in the healthcare industry
Common challenges in change management
Hospital vendor credentialing and change management
Change management models and approaches
How to measure change management results
Preparing for the future of healthcare

The importance of change management in healthcare

Change management is the systematic approach to planning, implementing, and monitoring changes in an organization to achieve desired outcomes. A healthy approach to organizational change can help to ensure that organizational goals are achieved while minimizing the negative impact on patient outcomes, staff engagement, and stakeholder involvement. Done properly, change management can address resistance to change while fostering a culture of continuous improvement and value transformation.

Factors driving industry changes

Healthcare transformation is being driven, in part, by the current macroeconomic environment, including inflationary pressures and labor shortages, which are presenting the industry with a host of challenges that must be addressed and solved.

In response to these change drivers, leaders are being forced to think differently about how they deliver care and how they implement and manage change against the backdrop of increasing competition, rising costs, declining reimbursement, healthcare worker burnout and chronic staffing shortages.

Other factors that are driving the need to embrace change include:

Technological advancements: The rapid evolution of technology, including artificial intelligence (AI), telemedicine, and electronic health records, is transforming how healthcare is delivered.
Regulatory changes: Healthcare providers must comply with new regulations and standards, which may require significant operational adjustments including the push towards value-based care.
Patient expectations: Patients are demanding more personalized, accessible, and convenient care, pushing healthcare organizations to adapt their practices and services in way that enhances the patient experience and meets patients’ expectations in the new age of healthcare consumerism.
Workforce challenges: A shortage of healthcare professionals, combined with an aging workforce, creates staffing challenges that need to be addressed through innovative recruitment and retention strategies. Workforce well-being, recruiting, retention, and resiliency will be priority focus areas.
Supply chain issues: while there has been some improvement since the height of the COVID crisis, supply chain disruptions and shortages continue to be problematic for many providers.
Financial pressures: Healthcare organizations must balance the need to reduce costs as they deal with compressed margins while also providing safe, effective, and quality care.

Common challenges and issues in change management

Every organization attempting to implement a change management strategy will be faced with barriers to change; and they will encounter obstacles that impede the successful implementation and adoption of new processes and behaviors.

Top 10 change management barriers

1. Resistance to change: Staff and stakeholders may be resistant to change due to fear of job loss, increased workload, or uncertainty about the benefits of the proposed change It is common for people to fear what they perceive they will be giving up rather than fearing the actual change itself.

2. Inadequate communication: Poor communication can result in confusion, misunderstandings, and lack of stakeholder buy-in. Leaders must consistently reinforce the need (and the reason) for the change – it is important to connect people to the “why” of the change.

3. Insufficient resources: Limited finances, staff, or time can hinder the successful implementation of change initiatives.

4. Poor leadership: Lack of strong and visible leadership can undermine the change management process and result in a lack of direction or motivation. Consistent leadership presence matters – this means that leaders must clearly articulate what is changing, why it is changing, and how the change will impact employees and patients.

5. Organizational culture: An ingrained culture resistant to change can make it difficult for new ideas and processes to gain traction. Leaders play a critical role when it comes to shaping and informing culture.

6. Inadequate planning: Absence of a clear, detailed plan can lead to poor execution and failure to meet objectives.

7. Lack of stakeholder engagement: Failing to involve stakeholders in the change process can result in resistance, reduced collaboration, and poor decision-making.

8. Misaligned incentives: Performance metrics or reward systems that do not support change initiatives can create obstacles to successful transformation.

9. Change fatigue: Organizations undergoing multiple, simultaneous changes may experience change fatigue, leading to disengagement, burnout, and resistance- be mindful of the pace of change and the capacity of others to absorb new change.

10. Ineffective measurement and monitoring: Not adequately tracking progress or assessing the impact of change initiatives can make it difficult to adapt strategies, maintain momentum, and demonstrate success.

Hospital vendor credentialing and change management

Vendor credentialing provides a good example of aligning the need to improve with change management. Vendor credentialing is an important element of a healthcare organization's ability to adapt to industry changes that help maintain and improve patient care and safety, while also ensuring regulatory compliance.

When healthcare organizations undergo change that involves external stakeholder and vendors, it is crucial to partner with vendors that meet the required standards for quality, safety, and compliance, as they can be play a role in a successful change process.

Establishing clear credentialing criteria and policies helps set expectations for vendors and aligns them with the organization's improvement goals. Implementing a centralized, automated vendor management system streamlines the credentialing process and ensures that vendor information is up to date and easily accessible, which is particularly important during periods of change.

Regularly reviewing and updating vendor requirements to reflect industry changes ensures that healthcare organizations maintain a high standard of service and safety and adapt to new regulations and best practices. Transparency and open communication between healthcare organizations and vendors is essential when it comes to facilitating collaboration and smooth transitions during change initiatives.

Selecting a suitable vendor credentialing solution involves assessing an organization's needs, resources, and risk tolerance within the context of a robust change management process.

Evaluating the effectiveness of current vendor management practices helps organizations identify areas for improvement and it also helps to align their vendor partnerships with improvement goals and change management objectives, ultimately contributing to the successful execution of change initiatives.

💡 Find out how Vendormate Credentialing and Compliance can help your organization

Change management models and approaches

Selecting the right approach and model for change management is a critical first step. Each healthcare organization has unique needs, culture, goals, and challenges–a tailored approach helps address these specific circumstances effectively.

Adopting a planned and strategic approach helps to ensure staff and stakeholders are engaged and motivated, which is essential for overcoming resistance and fostering a culture of continuous improvement. Meanwhile, selecting the appropriate model provides a structured framework to guide the organization through the complex change management process, improving the likelihood of success.

Together, the right approach and model helps healthcare organizations optimize resources, minimize risks, and achieve desired outcomes, ultimately leading to improved patient care and enhanced operational efficiency.

How to approach change management in healthcare

Regardless of the model adopted, successful change management in healthcare environments requires several key steps to ensure adoption, advocacy and sustainability.

Organizations must clearly define and communicate the vision and objectives of the change initiative.
Staff and stakeholders should be engaged in the change management process through collaboration, feedback, and ongoing communication.
Identify and address potential barriers to change and provide support, training, and resources to facilitate a smooth transition.
Continuously monitor and evaluate the progress of the change initiative allows for adjustments to be made as needed, ensuring success.

Change management strategies for healthcare

The following change management strategies provide different frameworks that can help guide healthcare organizations through process and help them achieve successful outcomes.

Lewin's Change Management Model guides healthcare organizations through a three-stage process of unfreezing existing practices, implementing changes, and refreezing to establish new norms.
Kotter's 8-Step Change Model provides a step-by-step approach for healthcare organizations to drive change by building urgency, forming coalitions, creating and communicating a vision, empowering others, achieving short-term wins, and institutionalizing changes.
Prosci ADKAR Model focuses on individual change in healthcare settings by addressing Awareness, Desire, Knowledge, Ability, and Reinforcement to achieve successful organizational transformation.
McKinsey 7S Model emphasizes alignment of seven interconnected elements—Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff—to create a holistic change management approach in healthcare organizations.
Bridges' Transition Model helps healthcare organizations navigate the psychological transition of staff and stakeholders through three phases: Ending, Losing, Letting Go; The Neutral Zone; and The New Beginning.

There are many other change management models, each with its own approach and focus depending on the context, industry, and the level of detail or granularity desired. Some models are more widely known and applied, such as those above. Organizations need to create a tailored approach that fits best their particular needs and objectives.

Measuring the impact of initiatives

Measuring the impact of change management initiatives in healthcare is important to ensure desired outcomes are achieved and sustained. Measuring the impact of change can also help organizations make adjustments and refine strategies while enabling data-informed decisions that contribute to improved patient care and operational efficiency.

Common ways to measure change management results

Here are common metrics and measurements used to assess the impact and results of change management projects within healthcare organizations:

Patient outcomes: Patient satisfaction, clinical outcomes, and safety measures.
Staff engagement: Employee satisfaction, turnover, and productivity.
Financial performance: Cost savings, revenue growth, and operational efficiency.
Process improvements: Effectiveness of new processes, procedures, and technology implementations.
Stakeholder satisfaction: Satisfaction levels of physicians, partners, and vendors.

Regular monitoring and evaluation of these metrics help healthcare organizations make data-driven decisions and continuously refine their change management strategies.

5 ways healthcare leaders are shifting in a transformative Time

Changes in healthcare – from delivery to payment – are impacting leadership and the structure of healthcare organizations. These changes are driving the need for talent previously not seen as key components for successful healthcare organizations. As a result, leaders are beginning to include members with expertise outside of traditional roles such as social media, customer experience, marketing and change management. This shift in thinking is key to an industry experiencing a major transformation and we are seeing it play out in five key ways.

1. Change is an opportunity

Healthcare organizations are embracing the need to add untraditional talent to leadership roles. However, finding candidates with experience in customer experience, enterprise risk management, data analytics and lean operations are not easily found within the healthcare field. With this understanding, it’s necessary to consider candidates from outside healthcare in order to build for future requirements.

2. Understanding that healthcare is a business

Healthcare is a unique business that can benefit from applying models more typically seen in the private sector. With the move toward value-based care, hospitals and health networks are under more pressure than ever to eliminate waste. Overall the trend is to improve efficiency with enhanced data analytics capabilities and integrated information systems. The immediate need is to learn to interpret data, establish benchmarks and understand performance measured against specific targets and is key to continuous improvement.

3. Looking to clinical roles when recruiting for a leadership team or teams to solve strategic challenges

The creation of management teams, where clinicians are paired with administrators to manage service lines or clinical areas is one approach. Leadership teams are growing and we are seeing a shift in traditional roles as physicians and nurses are moving into leadership roles, many in executive positions. Everyone is being asked/tasked with developing skills beyond their current set – to be more strategic – and to get there, training programs focused on developing leadership skills are on the rise.

4. Viewing technology as a transformative fulcrum for hospital success and improved patient experience and outcomes

This may be accomplished through growing integrated provider networks and care systems, through virtual networks, or integrating information systems.

5. Sharing information encourages participation and synergy from shared action

Information allows action, and information shared allows shared action. Organizations that embrace collaboration and seek to build relationships rather than silos, find that information exchange fuels success. In a survey of healthcare leaders, respondents regularly marked communication and interpersonal skills as important leadership skills, with one respondent singling out the importance of collaboration with colleagues as the effective way to accomplish something – rather than to just be the loudest voice in the room.

Preparing for the future of healthcare

In an ever-changing healthcare landscape, organizations must adopt proactive strategies to remain competitive and successful. By fostering a culture of innovation, enhancing agility, and strengthening resilience and collaboration, healthcare leaders can help their organizations prepare for the future.

Leveraging change management principles doesn’t just help navigate the complexities of the industry, it can also improve patient outcomes and drive operational efficiency.

Embracing the following principles will help the industry overcome current and future challenges in healthcare.

Fostering a culture of innovation: Encouraging and supporting new ideas and approaches can help healthcare organizations stay ahead in a rapidly evolving industry.
Enhancing agility: By effectively managing change, healthcare providers can respond more quickly and effectively to emerging challenges and opportunities.
Developing a resilient workforce: Engaging and supporting staff throughout the change management process can build a more adaptable and resilient workforce, capable of navigating future industry shifts.
Strengthening stakeholder relationships: Involving stakeholders in the change management process and addressing their concerns can improve collaboration and strengthen relationships, both internally and externally.

By embracing change management principles, healthcare organizations can successfully navigate the complex and dynamic healthcare landscape in order to improve patient outcomes, drive operational efficiency, improve financial performance, and enhance the patient experience while preparing for the industry's future challenges.

***

FAQs on Change Management in Healthcare

Why is change management necessary in the healthcare industry? Change management is necessary in healthcare as it helps organizations adjust to industry shifts, improve patient care, enhance worker satisfaction, and increase cost efficiency.

What are the key factors driving the changes in healthcare? Key factors driving changes in healthcare include technological advancements, inflationary pressures, reimbursement/payer challenges, regulatory changes, patient expectations, workforce challenges, competitive threats from non-traditional healthcare entities, and financial pressures.

What are the common challenges occurring in healthcare change management? Common challenges in healthcare change management include barriers to change, resistance to change, lack or leadership engagement, and communication challenges.

How can healthcare organizations effectively implement changes? Healthcare organizations can effectively implement changes by defining objectives, engaging staff and stakeholders, addressing barriers, providing support, and monitoring progress.

Why do people resist change? People tend to resist change because change is uncomfortable – they often fear what they perceive they will be giving up as part of the change.

How can leaders help people overcome resistance to change? Leaders have to first understand why people resist change. Overcoming change resistance and the change resistors requires that we frame the change from the perspective of the patient or the customer. For example, change is often required when we are trying to improve quality, outcomes, and safety. Leaders also have to clearly and consistently communicate the nature of the change, and how it will impact the employees and other stakeholders