Why health systems fail to make crucial decisions in time
It’s not a lack of data that stalls decision-making; the problem lies with having sufficient urgency to move ahead on opportunities.
The data were unambiguous. The health system’s operating margin declined each quarter once the Covid-19 pandemic’s aftereffects had passed. It wasn't enough to cause the auditors to consider “going concern” status, and not enough to threaten service closures – yet. Still, the pattern was unmistakable.
Leadership issued multiple edicts and pursued a series of initiatives to reverse the trend. None succeeded although, arguably, they may have softened the blow. Hiring freezes, travel restrictions and isolated layoffs accompanied an annual ritual of demands of price concessions from suppliers and never-ending product standardization programs. GPO partnerships were re-considered, with promises of millions in “guaranteed savings” that seemed to do little more than restrict choice and alienate physicians who objected to switching preferred vendors.
Frustration raged across middle and executive management, with everyone seeming to be stretched to their physical and emotional limit by these myriad initiatives. Working this hard to effectively only tread water was exhausting.
Looking for a plan
An outside firm offered to uncover tens of millions of dollars that could be saved on non-clinical spending on products and services that aren’t used in direct patient care. The firm had extensive experience within and outside of healthcare, with organizations everyone recognized and admired.
Within a few weeks, the firm delivered a plan. It was rich with benchmarks, containing a detailed, category-by-category, vendor-by-vendor, contract-by-contract plan, carefully laid out over three years, cognizant of the expiration dates of hundreds of individual contracts that would be renegotiated. Tens of millions would be saved each year.
Nothing came of it. It was not for lack of rigor or credibility. Nor was it for lack of the need for savings. And it wasn't because of weak leadership.
The outside firm’s chairman captured the absurdity plainly – had he offered a $50 million donation to the system, he would be welcomed with open arms and a red carpet. Yet, when offering a $50 million improvement in operating income, the system couldn’t act.
Getting off the dime
I have spent more than 40 years advising health systems across the country – academic medical centers, integrated delivery networks, community hospitals and rural facilities. These organizations don’t lack capable leaders, and they don’t suffer from lack of good intention.
They lack what I have come to call a forcing function, which is a mechanism that makes the cost of delay explicit before decision windows close.
Mission guides health systems. Stakeholders encourage rich breadth, depth and quality services. Clinical and functional leaders encourage ever-expanding service offerings and capability. Each of these drive growth, expansion and escalating costs.
Commercial enterprises face similar dynamics, but with a counterbalance that serves as a forcing function of their own. Some may argue the forcing function comes from the buyer-seller exchange. The same individual using the product or service pays for it – a natural mechanism that forces discipline. Contrast that with healthcare, where the person requesting the service (physician) differs from the person consuming it (patient), who also differs from the payer. Discipline thwarted.
This does offer some explanation, but it’s not the full story and thus not the forcing function demanded for decision discipline.
The difference in healthcare
The forcing functions found in commercial enterprises are embedded in their ownership structures. Capital markets. Quarterly earnings calls. Equity participation with personal financial consequences. The clock runs whether leadership winds it or not. This structure creates immediate feedback on decisions and decision pace; it establishes consequences for these decisions as well as for delays. It encourages leadership to constantly prioritize among competing initiatives and demands that scarce resources are directed toward the most beneficial opportunities.
A commercial enterprise would not delay or scoff at a $50 million opportunity, nor would it cite lack of time to address it.
Health systems do not have that mechanism. They cannot offer equity; they do not have shareholders holding them accountable to the market. The impact of their decisions (or failure to decide) carries no personal financial consequence. When delay carries no cost, delay is what you get – in abundance.
Let’s revisit the health system’s inability to act on a qualified $50 million savings opportunity. It stalled for three reasons – bandwidth, alignment concerns and timing.
The system suffers from the same ailment afflicting most health systems. Managers are overwhelmed by countless initiatives, to the point of exhaustion. Finding even a modest amount of time to take on anything new seems impossible. In a system with a forcing function, bandwidth is reallocated from low-utility efforts to those offering greater returns. Reallocation occurs because the cost of delay, and of misappropriated resources, is made visible by the forcing function itself.
Through the forcing function, alignment is built into the decision timeline, not used as a reason for delaying the decision. The forcing function aligns everyone on a common outcome, which is necessary to overcome natural parochial interests and concerns.
Lastly, timing is governed explicitly, and the costs of delay are measured. Consequences are understood.
Forcing function's pressure
These reasons are not irrational, dishonest or even wrong. They reflect genuine pressures. But, lacking a forcing function, they are always available and, unfortunately, sufficient to stall progress. That is the structural problem.
The $50 million opportunity may have been delayed, but the organizational cost did not disappear. Rather, it compounded. Margins continued to decline. Money that should have been saved and perhaps re-directed for clinical care was spent, never to be re-couped. Exhausted resources were no less stressed and likely were even more so, as the circumstances stimulating their exhaustion progressively worsened. Decisions that consumed management attention that were left unresolved did not relent.
Decision pace is capacity
Every unresolved decision consumes managerial attention. Every delayed decision consumes optionality. Organizations that improve decision pace do not merely move faster. They create additional leadership capacity without hiring another executive.
The cost of delay – of not deciding – is real. It just does not appear on financial or management reports. This invisibility is what permits the structural problem to persist.
As data professionals, we hold a unique and underappreciated role in this dilemma. We produce the trending analyses showing the margin decline. We provide the source data used by the external firm to produce their assessment. We validate the benchmarks used to quantify the opportunity. And we confirm the potential timing of realizing the value, based on a critical judgement of contract terms and scope.
We also bristle when the province of these same analytics is questioned by those naturally inclined to resist change and are permitted to do so when a forcing function is missing.
What we understand, and what most governance participants choose to ignore, is that the data are not the constraint. The constraint is structural. A data professional who can distinguish a governance gap from a data gap – a situation in which the problem is not insufficient information but insufficient structure – provides a form of institutional diagnosis that most governance participants cannot offer.
Part 2 of this series examines what a forcing function looks like inside the health system. Specifically, it addresses the specific governance mechanisms that make time visible, that make tradeoffs explicit and the cost of delay real before decision windows close.
The red carpet was never the problem; the missing clock was. The data identified the opportunity, and leadership recognized it. Governance simply could not act before time made the decision instead. The missing clock was never about measurement. It was about governance.
Mark A. Van Sumeren is a Fellow of the American College of Health Data Management and the author of Strategic Leadership When Time Is the Constraint (Health Industry Advisor LLC, July 2026).