11/05/2025 | Press release | Distributed by Public on 11/05/2025 08:19
With the passage of H.R.1, essential hospitals now face severe fiscal, regulatory, and operational pressure. Medicaid cuts, eligibility tightening, and administrative burdens will force difficult decisions. In such times, some leaders fall into short-term firefighting, shifting their mindset into survival mode and focusing solely on meeting quarterly financial targets. But forward-thinking leaders double down-committing not just to immediate metrics but to a culture that enables long-term sustainability.
At the heart of operational excellence lie the first two principles of the Shingo Model of Operational Excellence: Respect Every Individual and Lead with Humility. In health care, this is not aspirational fluff-it is a strategic necessity. Organizations that commit to these principles have demonstrated results, even in the face of financial challenges.
Culture is not something you decree; it emerges slowly, through repeated behaviors, patterns of interaction, and shared meaning. Research in health systems confirms that top leadership commitment and consistency are critical to shifting culture. For example, Sarah Singer's work for the Patient Safety Network highlights that leaders must act humbly; invite collaboration; and engage in cycles of trial, reflection, and learning. Leaders must not rely on edicts or metrics alone. A multi-paper work from the University of California Berkeley's Center for Lean Engagement and Research shows that simply adopting Lean principles in public hospitals is not enough-performance gains hinge on how leaders implement Lean, engage staff, and sustain daily management systems over time. When leaders commit long-term, public hospitals report measurable improvements even with constrained resources.
Culture is the anchor, especially in the crucible of disruption. Systems that lack trust and psychological safety fracture first under stress.
The principle of Respect for Every Individual is not simply about being courteous. In health care, it means ensuring that nurses, physicians, aides, and support staff are seen, heard, and empowered. It means creating work environments that promote both physical and psychological safety, promote individual and team growth, and allow people to work without waste. This is what Respect looks like:
When leaders respect people, they unleash creativity. And when creativity flourishes, patient outcomes, efficiency, and satisfaction follow.
Health care leaders are often trained to provide answers, but in times of disruption, humility is more powerful than authority. Creating an environment in which people at all levels have the autonomy and support to experiment and make their own decisions is imperative to accelerate improvement and results. Leading with humility means:
At association member UMass Memorial Health, in Worcester, Mass., executives who engaged directly with staff through daily management walks discovered barriers that data alone could not reveal. Their humility not only solved problems but strengthened trust and accelerated a financial turnaround.
Respectful and humble leadership alone is not enough if the environment doesn't allow people to act. Key enablers include:
Strong safety and workforce culture research emphasizes that staff must feel safe to speak up without fear. However, psychological safety cannot be spoken into existence. It requires consistent, intentional, and deliberate effort. Psychological safety must be fostered through consistent communication, modeling vulnerability, and constantly reinforcing positive interactions. Abundant evidence demonstrates the effectiveness and power of psychological safety in health care organizations.
Teams respond not to blame, but to inquiry-understanding system defects rather than punishing people. This is core to respect. Just Culture, just like psychological safety, is a framework that encourages reporting of errors and near misses and distinguishes between human error, behaviors, and system design. Evidence suggests that Just Culture has a clear positive impact on health care.
Without reinforcement from performance management, hiring, budgeting, and rewards, culture will revert to old norms. Leaders must ensure that all levers support the desired behaviors.
In the right environment, respect and humility catalyze a virtuous cycle: empowered people spot improvement opportunities, test changes, fail, learn, and spread improvements. The result: process reliability, better patient experience, better outcomes, and stronger financial performance.
H.R.1 will force leaders into razor-thin margins. But cost-cutting without culture investment is hollow. The health systems that endure will be those that strategically invest time and effort in creating the right culture, founded on timeless principles
Employee Experience → Patient Experience → Outcomes
Leadership Behavior → Process Improvement
Long-Term Sustainability
Essential hospital leaders should commit not only to short-term metrics (cost, volume), but also to sustaining culture: training, feedback, leadership standard work, and protecting the small everyday practices of respect and humility
In the upheaval of H.R.1, culture may feel like a soft luxury-but it is the backbone. By anchoring leadership behavior in the principles of Respect for Every Individual and Leading with Humility, health care systems generate environments where people thrive, problems surface, innovation emerges, and safety and quality improve.
This is not instant. Culture takes time. But amid disruption, it's the difference between institutions that crack-and those that endure, adapt, and continue their mission to serve.