The Courage to Change the Healthcare Game

3 applesAs someone who dreams up creative ways to engage customers and helps companies update their business models to thrive in the 21st century, I find myself often thinking about the healthcare system and how desperately it needs an updated model.

There have been a couple of news spots recently on healthcare providers starting to do things differently and experiencing huge success.  In one doctor’s office in Seattle, patient emails are answered daily by a physician, and appointments last twice a long as the average doctor’s visit.  The result is a much higher level of connection between patient and doctor and a much greater chance that “health-care” is being provided as opposed to “disease management” services.  The other story I saw involved a hospital here in Dallas that last year experienced the death of a patient while he waited in the ER for hours.  They completely revamped their ER process creating a number of different pods or mini ERs that take in multiple patients at one time so they can keep a closer eye on everyone.  Again, huge success in dropping their wait times and even more impressive, a dramatic drop in the percentage of patients that left before they were seen by a professional care giver.

In my opinion, the US healthcare industry needs a new business model far more than it needs new legislation.  We seem to be in this mode in America where we think that the best solution to all problems begins with massive new legislation.  Sometimes a tweak here and there can be very helpful, but solving all problems with more rules just runs counter to everything I’ve experienced on how to create change and lasting success.

At its most basic level, it is relatively easy to see that the healthcare system in our country is a bit backward.  We pay physicians when patients have something wrong with them as opposed to when they remain healthy.  To get paid for anything, the physician must start with a diagnosis and a diagnosis code.  Any time or energy a physician spends on prevention or educating patients on how to stay healthier longer is a bottom line deduction from their profits.  It is a simple case of rewarding the wrong behaviors.  There are no fingers to be pointed or people to blame, it’s simply a model that is ineffective at creating what is needed, which is healthier and happier people at a lower cost.  Perhaps 100 years ago, when there was far less knowledge about and focus on prevention, the currently model was relatively effective.  Healthcare is no different than so many other industries (like energy, automobile, finance, and telecommunications to name only a few) that need to change with the times in order to remain effective.  What is sneaking up on most of us is that the rate of change has skyrocketed and is now at a pace that is uncomfortable to most industries and businesses.  There is hope though; we just have to be willing to change the way with think about things and be willing to do it in dramatic ways.

During the thrust of the healthcare debate, I only saw one article that touched on the real issues.  The article discussed how organizations such as The Mayo Clinic and the Cleveland Clinic appear to run at a much lower cost structure and simultaneously have reputations for the best service available in the industry.  The article attributed this in large part to the fact that doctors from different disciplines collaborated very effectively on all kinds of cases on a daily basis, which tends to cut out tests and procedures that ultimately end up being unnecessary.  Unfortunately, most of the healthcare industry is built on an “every doc for himself” model that actually dissuades doctors from taking the time to collaborate as much as they would probably like to.  It is much easier to collaborate when people are co-located and when the concept is built into the care model.

Because the “every doc for himself” model is so pervasive, it has been difficult for the industry to take advantage of technology to the extent that it could, which would ultimately benefit the patients and reduce costs.  For example, if a doctor sees a new patient and diagnosis him/her with diabetes, there schedule probably only allows for them to spend 15 or 20 minutes explaining everything.  The patient is in such a state of shock they likely are only taking in a portion of the information that is radically changing their life.  What if you could also send the patient home with a computer login that accesses their own health web page customized to their personal care needs?  It could contain a longer video, of their very own doctor, explaining everything again that they could watch as many times as they wanted and could share with family members who might be participating in their long-term care.  A private chat board could be available that is manned by an RN or Physician’s Assistant answering questions in real time.  The possibilities are endless in this area.  How many relapses could be avoided if patients watched daily videos that indicate how things should be progressing after surgery discharge or an outpatient procedure.

The point is, we need to start thinking in terms of radical changes, and honestly considering if the business model is working toward our goals or working away from them.  Imagine a time when doctors get paid for keeping people healthy.  Imagine if your healthcare facility was a place where you could workout, ask a quick question, learn about nutrition, pick up some new recipes, and get motivated to live a healthier life?  The reality is the current business model is stifling progress, innovation, and advancement in how we think about and deliver healthcare.  Our healthcare system has been narrowed down to a transaction system.  It feels like progress is being made because there have been great advancements in understanding diseases and innovating new treatments, however, very little has been done around the delivery of healthcare.  We have State of the art medical knowledge delivered, in many cases, through an outdated and archaic system.  If you are looking for ways to cut costs and increase the quality of service, this is where the opportunities lie.  Unfortunately, until we correct the structure of the system, those efficiencies will likely continue to lie dormant.

In the business world we call this a classic case of structure taking over the strategy.  You always want your strategy to dictate the best structure, not the other way around.  Unlike a single business transaction or a single company, where you change the structure relatively easily, this is an entire industry in one of the world’s largest countries.  It is likely impossible for a single healthcare provider, a single hospital, or even a single hospital system to make a change to the structure on their own.  Maybe it will require a grass roots movement that strives for a total do-over in the way our healthcare system works.  Once the structure is changed to create the alignments and incentives necessary to meet the goals then, and only then, will we see meaningful change.

As much as I dislike the behaviors that the medical insurance industry sometimes displays, it is a complete waste of time to try and fight them.  Everyone has responsibility for things getting to the point that they have, and these bad behaviors are just another symptom of a system that is governed by an outdated and ineffective model.  The insurance companies will have to be a part of the solution.  Insurance is a numbers game.  When the youngest and healthiest people opt-out because the cost is too high it simply continues a vicious cycle where the insurance companies feel they have to remove the other end of the spectrum as well in order to balance out their risk.  I am actually a fan of having a minimum insurance requirement with the government picking up the tab if someone can’t afford it.  We have this requirement in the auto industry and I believe it is one of the reasons that auto insurance seems to work so well.

If you look at healthcare as an entire business system and start to dissect its “operating statement” you quickly realize that revenues are generated by one party (insurance companies) and expenses are created by another (providers), though for the providers those expenses are viewed as revenue.  The profits from the system are shared but not anywhere near equal to the value that each party contributes or in a way that promotes the desired outcomes.  The real value that an insurance company provides is an administrative function, yet in many cases, they take an outsized portion of the profits from a value perspective and often have the most control.  The insurance companies will say they also take on the risk, but I would argue that it is the purchasers of insurance that take the risk.  When profits start to go down the insurance companies simply start denying claims, dropping high-risk people, and jacking up rates for everyone else.  They have become experts at deriving ways of mitigating their risks by passing them on to their customers, and we have let them get away with it for so long that it is now seen as standard practice.  In fairness, nothing has been done to ensure that the young and healthy remain part of the pool, which I believe could solve a lot of the insurance issues.  This would be one of those areas where some legislative changes could be good.

The real question is not, could we come up with creative and inventive ideas to cut costs and increase quality, but do we have the courage to make the necessary changes to the underlying structure?  Do we have the courage to design a model that provides the incentives to promote the investments necessary to increase service quality and bring down costs?  I hope the answer is YES.  I believe the answer is YES.  We can have all the intelligence and innovation imaginable, but without the courage to make system wide structural changes we will likely only create an updated and over compromised version of what we already have, spend a lot of money getting there, and leave an even more complex mess for our children and grandchildren to clean-up.

We must find the courage to critically examine the current system and understand how the alignments and incentives are simply miss-directed to accomplish the goals of the medical community and our society.

We must find the courage to recognize that the failures are not born of malice from any party, but are born of a system that is simply out-dated and broken.

We must find the courage to work together and commit to create the world’s finest healthcare system and be a leader for the rest of the world.



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