Tag Archives: analysis

I got one right

Throughout my blog, I have argued time and again that the development and practice of cognitive ability is one of the key enablers or detractors of personal and organizational performance.   I have encouraged my readers to focus on improving their cognitive skills as a means of empowering improved decision making capabilities.

When I was in undergraduate business school years ago, we were required to subscribe to and read the Wall Street Journal on a daily basis. That assignment started a discipline that has endured through my career.  One of the reasons that I read the Wall Street Journal daily is that its healthcare industry coverage is as good as any.  In addition, The Wall Street Journal is intellectually stimulating on many levels.  For example, one of the things that has been shown to improve cognitive ability is vocabulary study.  Rarely a day goes by that I do not see at least one word in the journal that I cannot define.  I look these words up and record their definition.  When I find myself with nothing to do, I get my list out.  More often than not, these words are found on the Journal’s editorial pages that are written by some of the smartest people alive.

My article on career development has been very popular.  I am honored and humbled by the number of people following my work that are genuinely interested in developing their careers and advancing in organizations.  The comments, feedback and suggestions this article stimulated have been inspiring to me and motivate me to find suggestions and recommendations that will be helpful to my readers.

Many of us know and are motivated by the stimulation that comes from affirmation.  In my article on career advancement, I argue for the development of cognitive ability as a means of building a foundation from which you may advance your career.  One of the things that fascinates me about universities and the people that work there is that regardless of the subject, how arcane or trivial it may seem to be, there is a professor at some university somewhere that is an expert on the subject.  We are so blessed and our society and life is so enriched to have these geniuses among us.

An article that appeared in the Wall Street Journal on June 5, 2017 is a very good example of what I’m talking about. This article confirms my theory that the development of cognitive ability is a critical success factor when it comes to roles and responsibilities requiring the incumbent to be able to do their own thinking.  I had no idea that for many years this very characteristic has been under study.  Not only that, there is a ranking of the degree to which various university programs are or are not successful in developing cognitive skills among their students.  It is very sad and some may argue disingenuous that these data are not readily available to people considering one academic program over another.

The  article title is:  Exclusive Test Data: Many Colleges Fail to Improve Critical-Thinking Skills

So I’m vindicated.  The admonition of this is that all of us can benefit from  focus on continuous cognitive ability improvement.  So what are you waiting for?  How much more evidence do you need to be convinced that among the highest and best uses of your time is investment in yourself?

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link that usually appears as a bubble near the bottom this web page.

There is a comment section at the bottom of each blog page.  Please provide input and feedback that will help me to improve the quality of this work.

This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

Best of luck – Ray Snead

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Examples of what not to do – simple mistakes you have seen that others could avoid.  AKA – How many ways can you get yourself into trouble?

One of the items of constructive feedback I have received is that some of my articles are too long.  The subject of this article resulted in an article over 2,000 words long.  I have reminisced with friends in the consulting business that have suggested that we collaborate on a book on this topic based on the experiences we have had.  As a result, this article will be posted in multiple editions.

A very highly regarded friend of mine recommended that I address mistakes that might be beneficial to others.  Nasreddin said something to the effect that, ‘good judgment comes from the experience we get from exercising bad judgment.’  Given the benefit of this insight, I will address some of the things that I have seen as the cause of extreme angst in one healthcare organization after another.  An exhaustive listing is beyond the scope of any article.  However, I welcome tips and stories from my readers addressing vivid memories of things that would be beneficial for others to know, especially those that do not have the experience of some of us.

Blind trust of systems

This is one of the most basic managerial errors and it is seen over and over.  People ‘assume’ that a system will or will not do something without proving the assumption only to be surprised when their blind faith is proven wrong in a spectacular faux-pas.  Rather than assuming that people understand the meaning of the word ‘assume’, I will define it by dissection.  All to often, people engage in assumptions leading to flawed decisions that make an ASS/out of U/and ME.  I wish I could remember how many times I have witnessed flawed assumptions wreaking havoc around me.  Sometimes, these errors result in terminations of the people involved.  Mark Twain and Ronald Regan said that, “It is not what you know that will get you, it is what you are absolutely certain of that is just not right.”

Once upon a time when I had reason to doubt the controls in the hospital’s accounts payable system right after a new state of the art, super whiz-bang accounting application had been implemented, I was assured by my Controller that there were safeguards in the system that he said would guarantee that there was no scenario under which an automated check for more than $25,000 could be produced and signed with my facsimile.  I had set this limit to insure that I had the chance to personally review large disbursements and sign them manually.  About a week later, it came to my attention that instead of keying a construction draw request of less than $25K, the A/P clerk keyed the remaining balance of over $275K to a contractor that the hospital was engaged in an active dispute with.  What do you think happened when this transaction went through the system without interruption and out to the contractor?  If you ass/u/me that he brought the check back, you would be sorely mistaken.  I am sure others can provide similar nightmare stories.

There are thousands of ways to be trapped by our own systems. The more complex the systems, the greater the number of interfaces with other systems and the higher the volume of transactions, the greater the potential for error and the larger the error will have to become before it is discovered by normal control and balancing processes.

Hiring mistakes

Another HUGE area of learning in the school of hard knocks is hiring decisions.  Jack Welsh said something to the effect of, “Getting the right people into the right jobs is a lot more important than developing a strategy.”  As an interim executive I have observed that one of the more common areas that gets organizations into trouble is hiring decisions that result in people being put into roles where they cannot succeed.  Some organizations and hiring decision makers are highly motivated to put the next person in line into a role whether they are qualified or not.  I have been criticized for bringing people from outside of town into the organization to fill crucial roles.  My response is that if  properly qualified local applicants were available, I would hire locally to save travel money if for no other reason.  I have counseled Boards and written on the subject of organizational performance being nothing more complicated than the collective caliber of the team on the field.  One of my mentors taught me by example the potential and value of getting the right people into the right places in an organization and the difference they can make.

Getting the right people is as important if not more important than avoiding hiring the wrong people by making mistakes in the vetting process.

AR valuation

I have seen so many executives brought down by incorrect valuations of their accounts receivable that I have lost count.  So many in fact, that I was inspired to address one of my blog articles to CEOs that all too often become one of the first victims of this error.  The article asks the question, ‘have you been caught looking?’  One of the biggest risks on a hospital’s financial statements is the valuation of revenue and accounts receivable and for every understatement, there are multiples of over-statements of receivable and revenue value.  In fact, I have not seen an undervaluation recorded although I have been in arguments with outside auditors about under and over valuations of revenue and A/R.  It is a lot easier to convince an audit partner to not book an undervaluation than it is an over valuation.   The executive that wishes to avoid becoming a victim of this trap needs to take the advice of my article on the topic to heart.

AR reclassifications

A reclassification of AR is potentially more dangerous and harder to catch than a simple error in calculating realizable value.  For example, consider an organization that holds self pay balances after insurance in the same bucket as the insurance.  This is considerably more common than many managers appreciate.  Suppose a commercial receivable is valued at 70% of the underlying charges and self pay receivables are valued at 5%.  When an amount like $5 million is reclassified from insurance to self pay to clean up a backlog after the insurance balances have been satisfied, the adjustment to the value of receivables will be 65% (70% – 5%) or $3.25 million.  There are other reasons for balances to accumulate in the wrong buckets on the receivable system leading to reclassification adjustments.  The receivables are not wrong, they are just valued incorrectly.  This kind of error is enough to knock an enormous dent into or potentially wipe out the operating income of any enterprise.  There are rarely adequate cushions or reserves in realizable value calculations to absorb a shock like this.

Summary

As can be seen, a text-book could easily be written on the topic of what not to do.  There are plenty of texts that are written on what to do, they are just all too regularly ignored.  Some leaders seem to not have the ability to connect academic learning and practice. These are but a few examples of things that I have seen go wrong in healthcare organization’s business operations.  This discussion is a good example of the value of experience.  Experienced executives operating on evidence based practice have a far better potential to avoid these pitfalls and others.  Sometimes the value of an executive in an organization is more related to what they know than what they do.  Once a patient in an outage accosted a surgeon  over his fee.  The patient took the position that the fee bore no relationship to the time spent on the procedure.  The surgeon replied that 5% of his fee was for the cutting and the other 95% was for knowing where to cut and what not to cut.

My plan is to publish another article on this topic with more examples of what not to do. If you have any stories to contribute, I would love to hear them.

I would like to thank Dr. Christy Lemak, Dean of the Health Administration program at the University of Alabama at Birmingham for inspiring this article.  I am looking forward to seeing my grade.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link that usually appears as a bubble near the bottom this web page.

There is a comment section at the bottom of each blog page.  Please provide input and feedback that will help me to improve the quality of this work.

This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

More sadistics

In my last blog post, I made a grievous, amateur error.  I will be lucky if UAB does not repossess my degree.  I made the most common mistake know in the world of statistics.  I said, “and does the thing I think is causing what I am seeing really have anything to do with it?”

If you ever learn anything about statistics, it must be that no amount of statistical analysis can prove a cause and effect relationship between anything.  All you can prove with statistics is that things are ASSOCIATED with each other.  The best example of this I can think of is the debate around smoking and disease.  As far as I know, no one has proved a direct link or causal effect between smoking and disease.  No scientist can explain why some smokers get disease and others do not.  No one can explain why one smoker gets cancer while another gets heart disease.  No one knows exactly what about tobacco is unhealthy.  No one can explain how George Burns lived to be 100 years old smoking a cigar every day.  Of course smoke has bad chemicals in it but so does the air we breathe and almost everything we consume, especially since the government approved drugging livestock and feeding them (and us) genetically altered food.  We do know with a very high degree of certainty that there is a strong ASSOCIATION between smoking and disease.  We just cannot explain the causal factor(s).  If we could, we would do something about it.  I never did believe the attacks on the tobacco industry were justified because no one can prove cause.  The attacks are about money and not much else.  The tort liability vested upon tobacco manufactures served only to raise the price of the product while creating a windfall for States that as far as I know have not spent much if anything of the appropriated funds they received on smoking prevention.  If the government is really serious about smoking, it would not give Medicaid cards out to smokers.  For that matter, it would use EBT to incentivize people to engage in more healthy lifestyles in order to reduce Medicaid expenditures down the road but that is the topic for another blog.

If you are now boiling mad at me for making these assertions, I have you where I want you to make a point about statistics that you might remember.  To cite just one example, there is similar controversy about diet drinks.  There have been a number of studies that show that diet drinks may be as bad or worse for your health than cigarettes.  “Researchers from the University of Texas found that over the course of about a decade, diet soda drinkers had a 70% greater increase in waist circumference compared with non-drinkers. (1)”.  “Drinking one diet soda a day was associated with a 36% increased risk of metabolic syndrome and diabetes in a University of Minnesota study.  Metabolic syndrome describes a cluster of conditions (including high blood pressure, elevated glucose levels, raised cholesterol, and large waist circumference) that put people at high risk for heart disease, stroke, and diabetes (2).  “Using diet soda as a low-calorie cocktail mixer has the dangerous effect of getting you drunk faster than sugar-sweetened beverages, according to research from Northern Kentucky University.  The study revealed that participants who consumed cocktails mixed with diet drinks had a higher breath alcohol concentration than those who drank alcohol blended with sugared beverages.  The researchers believe this is because our bloodstream is able to absorb artificial sweetener more quickly than sugar (3).  “Just one diet soft drink a day could boost your risk of having a vascular event such as stroke, heart attack, or vascular death, according to researchers from the University of Miami and Columbia University.  Their study found that diet soda devotees were 43% more likely to have experienced a vascular event than those who drank none. Regular soda drinkers did not appear to have an increased risk of vascular events.(4)”  All of these citations were from just one article.  If you do not believe me, do your own internet search.  This makes me wonder why the government and the tort lawyers are not after the soft drink industry if its products CAUSE all of these maladies?

Now I am going to bring back nightmares from your college statistics course by reminding you about something you forgot long ago.  Remember regression?  For those of you that have not been initiated, regression is a procedure utilized to determine the degree of ASSOCIATION between things.  In a simple regression, you are looking at two things (an independent and a dependent variable).  In a multiple regression, you are looking at multiple things (one dependent and multiple independent variables).  I know some of you are thinking that the only kind of regression you understand is what happens when people are appointed to C-Suite roles in healthcare organizations but bear with me for a minute.  Among the various statistics produced as a result of a regression analysis is the effect size measurement of R Squared.  The R Squared statistic is alternatively described as the coefficient of determination or correlation coefficient.  Start dropping these terms at a cocktail party and watch how fast people start treating you like you have the plague.  What this statistic describes is the degree of association among the variables.  Its values range from 0 to 1 or 0% to 100%.  If there is no association between the variables, the correlation coefficient will be low.  If there is a perfect ‘fit’ (in other words when one variable zigs, the other zigs by the same magnitude. They also zag together) between the variables, the correlation coefficient will be 100%

People that fall into the trap of believing that statistics prove cause and effect would draw the incorrect conclusions from the following examples of extremely high statistical associations.  These associations are described as spurious correlations where the statistics say that things that cannot be related are associated with each other.  Uninformed analysts or liars would infer or imply that there is a causal effect.  What do you think about these examples?

US spending on space, science and technology correlates with suicides by hanging.  The correlation coefficient is 99.79%  Maybe people are actually killing themselves when they come to the full realization about how much money the government is blowing.

Per capita cheese consumption is very strongly associated with the number of deaths occurring when people became entangled in their bed sheets.  R Squared = 94.71%

There is an association between the per-capita consumption of margarine and the divorce rate in Maine.  The coefficient of determination is 99.26%.  Some would conclude that in order to eliminate divorce in Maine, all we have to do is outlaw the consumption of margarine.

Drownings resulting from falling out of a fishing boat can be explained by the marriage rate in Kentucky (R Squared = 95.2%)  In other words, in order to eliminate drownings in fishing accidents, we need to outlaw marriage in Kentucky.  I guess the Supreme Court recently took care of that.  I would recommend that fishermen start wearing life vests.

There are a number of examples of spurious correlations on the internet.  The point of these examples is to sensitize you to the fact that statistics do not and can not PROVE cause and effect.  Sometimes associations found in statistical analyses are spurious.  This is why you are paid the big bucks – to understand what you are looking for, to not fall into this trap and to apply cognitive analysis to anything you see to prevent you from drawing the wrong conclusion(s).

As I have said before, as leaders we are not paid for what we do.  We are paid for what we know and more than anything, we are paid for our decision making capability.  My point in writing this is to argue for the use of more analysis and evidence in executive decision making in healthcare administration.  They even have a Doctorate of Science Program at The University of Alabama at Birmingham that focuses on this very concept.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.
The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link in the menu bar at the top of this web page.
This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.