The Stockdale Paradox

Last week's SCHA Annual Meeting was characterized by a strange mix of sobering and exciting news. The news about Medicaid was sobering; even though Tony Keck didn't specify the level of cuts he plans for provider rates, it was clear he will propose significant payment reductions. At the same time, the success stories we heard from our state's own hospitals were nothing short of inspiring. Based on the comments I heard at the meeting, our hospital leaders believe we are capable—working together—of reengineering the delivery of care in South Carolina.

It was strange to hear so much enthusiasm during a meeting when the Medicaid Director led hospitals to expect the largest rate cut in recent memory. I could not help thinking about The Stockdale Paradox, a concept made famous by Jim Collins' 2001 book, "Good to Great." Based on his study of good companies that transformed themselves into great ones, Collins concluded that one key ingredient was the companies' willingness to hold two distinct and seemingly opposite beliefs at the same time. This ability was best personified by Admiral Jim Stockdale, who was imprisoned in the Hanoi Hilton for eight years during the Vietnam War. When asked why some prisoners didn't survive the ordeal, Admiral Stockdale noted that some prisoners were too optimistic. In short, he explains they had unrealistic beliefs about their condition and died of a broken heart when they were not soon released. Stockdale, on the other hand, simultaneously believed that he would survive the ordeal but that it might take a very long time. As Collins describes it in "Good to Great," the Stockdale Paradox is best understood as follows:

You must retain faith that you will prevail in the end, regardless of the difficulties.

AND at the same time…

You must confront the most brutal facts of your current reality, whatever they might be.

This paradox reflects what I felt during our Annual Meeting, and I believe our hospital community must embrace it in order to survive these turbulent times. What are the brutal facts of our current reality? Simply that America's political mood is anti-government and anti-Medicaid, and our state's politics reflect the national mood. We can argue about why Governor Haley prefers to cut Medicaid rather than accepting our offer to increase our contribution, or we can simply acknowledge that she is no different than the other 28 Republican governors across this nation. Almost all of them are proposing deep cuts to Medicaid. This has nothing to do with any particular hospital and very little to do with health care in general. It has much more to do with Americans' concern about government spending, the new health care reform law, personal accountability, and the financial viability of our nation. As health care leaders, we must be careful not to misinterpret the political messages we are hearing. We must help our nation reduce the cost burden of health care, but we should not conclude that our fellow citizens have devalued the important roles played by physicians, nurses, and hospitals in our society. I sense no such thing when I visit patients in hospitals across our state. Medicaid is on the chopping block not because hospitals don't deserve to be paid for the care they deliver; Medicaid is on the chopping block because the people believe government is paying too much for health care and Medicare is still the third rail of American politics—touch it and you will die.

We must face these brutal facts of our current reality, AND at the same time we must never give up faith that we will prevail in the end. Is there good reason to have faith? Absolutely. Here are several reasons I believe we will prevail.

Despite the nation's frustration about the cost of health care and how much of that cost should be borne by government, Americans expect and even demand high quality health care in their communities. Pay close attention to the political arguments, and you will note they are primarily about cost; few respected leaders ever argue that we need fewer doctors or hospitals. The public doesn't want less health care or less quality; they just want to pay less for it. (That's a tough challenge for us, but it's not the same as being unwanted.)

I also believe we will prevail because we are already making great strides. In fact, South Carolina's hospitals are leading the way for the nation. If you missed the success stories during last week's meeting, please give us an opportunity to pay a visit and share them with you. South Carolina's hospitals are redefining heart attack care, leading the nation to adopt safer surgical practices, setting the pace for reducing central line associated bloodstream infections, and reducing the cost of care…all at the same time. We have adopted the Triple Aim as the cornerstone of our statewide Reengineering initiative, and we are increasingly recognized as a leader in national meetings. The Triple Aim seeks to accomplish three goals at once: (1) improving the patient experience of care, (2) improving population health, and (3) reducing the per capita cost of care. Can we achieve that Triple Aim? Absolutely. Will it be easy? No way. Is it worthwhile work? Without question.