Leadership Practices of Southcentral Foundation

Five-Part Leadership Blog Series

In this five-part blog series on the 2017 Baldrige Award recipients’ leadership presentations at the 30th Anniversary Quest for Excellence® Conference (April 8–11, 2018), senior leaders of the five new national role models share best practices and stories of how they achieved excellence.

“A Formula for Cutting Health Costs”

“The disjointed, costly American health care system must find ways to slow the rate of spending while delivering quality care. There is widespread pessimism that anything much can be achieved quickly, but innovative solutions are emerging in unexpected places. A health care system owned and managed by Alaska’s native people has achieved astonishing results in improving the health of its enrollees while cutting the costs of treating them.” “A Formula for Cutting Health Costs” editorial, The New York Times, July 21, 2012

Thus began a New York Times article on Southcentral Foundation (SCF), which, under the leadership of Dr. Katherine Gottlieb, who describes herself as a “short, cute Aleut” (a native tribe from the western portion of the Alaska peninsula), transformed itself into a health care system where the patients take ownership of their own health care. SCF incorporates cultural values and storytelling, creating a relationship-based, customer-owned approach to transforming health care, improving outcomes, and reducing costs called the Nuka system of care; the word Nuka is an Alaska Native word used for strong, giant structures.
 

“When we impact the life of one, it’s actually multiplied by five or ten,” said Gottlieb, president and CEO of the two-time Baldrige Award recipient since 1991. “So, we’re about health and health outcomes, and people are our products.”

Taking Responsibility for Our Health Care

SCF’s focus is on the health care needs of the Alaska Native and American Indian people in ways that respect their cultures and are personalized. The health system covers a geographical area of 126,000 square miles, with many communities served reached only by plane or boat.

According to Gottlieb, SCF took over the health care of its people through a 1975 law called the Indian Self Determination and Education Assistance Act, which stated that Alaska Native and American Indian people have been “denied an effective voice in the planning and implementation of programs that respond to the true needs of the people.” The Federal government recognized, said Gottlieb, that “if the people receiving the health service are involved in the decision-making processes; better yet, if they own their own health care— programs and services have a potential for enhancement and the people and their health statistics will improve.” 

According to Gottlieb, when SCF was established, “We took full responsibility [for our health care]. We took it on our shoulders to be successful. And this meant success in health and wellness.”

But, she said, success in the system came quickly, with numbers of people needing care quadrupling over night. During this period of quick expansion, Gottlieb started reading the Baldrige Excellence Framework (Health Care), and “it was the reason I chose to stay at SCF,” she said.

As part of her leadership presentation at the Quest for Excellence conference, Gottlieb thanked the Baldrige Program “for helping me as a CEO to go forward and make systematic changes with our organization and all of our community players. We have over 2,000 employees. We all eat Baldrige. . . . We do talk the language and walk the language.” She even presented Baldrige Director Robert Fangmeyer with a ceremonial drum.

With the Baldrige framework, we learned that making all of the decisions for change at the top levels wasn’t effective, she said; we needed to deploy the ownership to the customer-owners. “I’ll tell you what is very scary: to delegate, but once we did . . . we created a lot more innovation in our employees. Because everybody now got to sit at the table, . . . so we are growing our own. Many of our employees are moving up in the ranks. That is part of our success, and the success of our organization is due to our succession planning. People come along behind us, take our places in upper management using the same framework. They all are familiar with the Baldrige framework.”

Sharing Hearts and Relationships

SCF had to be a creative and innovative health care delivery system because of its huge, diverse population, said Gottlieb. SCF delivers care to about 65 Alaska villages, ranging in size from 30 to 3,000 people, and among Alaska Natives are “several layers of populations from different backgrounds,” she said. Gottlieb said SCF now delivers care by focusing on relationships—relationships among coworkers and relationships with “our people who are hurting.” Patients are called customer-owners because they truly own the business, she said.

“We [establish relationships] by . . .  working together to learn and grow, to understand with an open mind, and . . . sharing our stories. . . . We believe everyone has a story behind their eyes, and we’re looking to share one another’s stories with our hearts,” added Gottlieb.  

“Customer-owners . . . are on the Baldrige journey with us, and . . .  [they] have helped us to build [SCF],” said Gottlieb. “People choose to come to our health care system, not forced to, so we’re paying attention to our workforce; everyone is motivated. There’s a strong infrastructure for growth, sustainability, and there’s a very strong culture for innovation and change.”

Gottlieb added that employees are allowed to take calculated, innovative risks, and they take the ownership when an error gets made. “We’re going to take the responsibility on ourselves as we move forward . . . and that has changed everything,” she said. “We change everything together.”

First Two-Time Baldrige Health Care Award Recipient (2011 and 2017)

At SCF, the vision and mission do not hang on the wall—something that initially surprised the Baldrige examiners arriving for a site visit, Gottlieb said. At SCF, the customer-owners know the vision and mission by heart, because they own it.

View more results from the Southcentral Foundation.

Five-Part Leadership Blog Series: Upcoming Blogs

Adventist Health Castle (Health Care)

Previous Blogs

Leadership Practices of the City of Fort Collins (Nonprofit)
Leadership Practices of Bristol Tennessee Essential Services (Small Business)
Leadership Practices of Stellar Solutions (Small Business)

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