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Johns Hopkins' strong medicine stresses process improvement over cutbacks

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A hospital is a business that sits at the crossroads of the biggest challenges of our current environment -- the health care, educational, and economic crises

Talk about a balancing act. Ronald Peterson, CEO of Johns Hopkins Hospital, runs a business that sits at the crossroads of the biggest challenges of our current environment -- the health care, educational, and economic crises. Yet, he has been able to hold the line against layoffs, keep his institutional profitable, and tend to the uninsured -- all the while maintaining its standing as the number-one top-ranked hospital in the nation.

When asked by Dean Tsouvalis in a recent interview for the secret of his success, Peterson's reply was unequivocal: hire and nurture the best talent you can find. “When times get tough, instead of just lopping off people, we try to understand opportunities to improve processes,” he says.

Peterson should know about managing tough environments. He transformed the former Baltimore City Hospital into John Hopkins Bayview Medical Center, turning a $7-million-a-year deficit into $5 million profit a year.

He was able to accomplish this at a medical center that cares for half a million patients a year, many of whom are uninsured. In terms of resolving the health care issue, he advocates that hospitals such as Johns Hopkins assume end-to-end coverage and care of sections of the population.

His advice for managing these demands provides a lesson for all types of businesses: “Manage the cost side of the business more closely,” he says, while focusing on examining processes and streamlining them without cutting staff. “In a hospital setting, many of the things we do to ultimately care for patients involve multiple departments and processes that cut across many departments, so attention to process improvement was needed.”

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure