| 8 July 2016
Dear Interested Readers,
Inside This Week’s Letter
More than a month ago I began a series of letters about the future of healthcare. The series began with some generalizations and a review of some of the principles upon which I speculated the future will be built. After that introduction, the series continued by sequentially looking at the future from the perspective of patients, providers, nonprofit boards and medical executives and leaders. The series was interrupted two weeks ago for a discussion of gun violence as a public health issue following the shootings at the Pulse nightclub in Orlando. You may read abridged versions of all of those essays as postings on strategyhealthcare.com.
I have a positive view of the future. I believe in the ability of our country to overcome obstacles. Perhaps when you read or view your favorite source of “news” your sense is that the world is falling apart. Despite the daily challenge of processing spectacularly negative events from around the world, my sense looking back over more than seventy years of personal history is that we have made progress in the move to a more just and equitable society. We still have huge problems that for many individuals and minority groups are unbearable and demand resolution, but we also enjoy an abundance of goods and services that is unmatched in history and unmatched anywhere in the world at this time. We have always had challenges. We have always had internal conflicts. More has never been enough. We have always denied or delayed the work on our most fundamental issues. We are masters of self criticism, but in the end we have always continued to make progress.
In healthcare we are making slow progress, although I know that despite almost twenty years of focused effort to make healthcare patient centered, safe, efficient, effective, timely and equitable many people still have no care or suffer with care that is arranged for someone else’s convenience. For many it remains true that when care is available it is often too expensive, unsafe, delayed, inefficient, ineffective, and not delivered equitably. There is much work left to do.
Martin Luther King, Jr. considered inequity in healthcare to be an unacceptable human rights violation. That sounds harsh but we often forget that while we take our own good time in our efforts to improve care, those without care suffer in many ways and sometimes die deaths that could be avoided if better care were available.
This week’s letter is an effort to look at the barriers that delay our ability to achieve the Triple Aim. I refuse to accept the idea that we lack the necessary creativity, resources, or knowledge to achieve the goal of
Care better than we have ever seen, health better than we have ever known, cost we can all afford, …for every person, every time.
What then is the explanation for the delay? What are the circumstances that allow us to continue to accept less than the best for all? This week’s discussion approaches but does not completely answer those questions.
The last section is a review of timely issues. Baseball is moving to its midseason All-Star break and it is time to forecast how far into the fall hope might carry us. The big excitement in my world is pictured in the header for this week. There is a new baby loon on Little Lake Sunapee. We have not had a baby loon hatched in three years. It takes a village and a lot of community focus to launch a baby loon in a VUCA world.
It’s Not An Easy Ride To The Future On The Magic Carpet of Innovation
Recently I had the opportunity to attend an annual innovation event for executives in healthcare. It was attended by about seventy leaders, entrepreneurs, policy experts, and innovators from around the country. There were representatives from all types of medical enterprises. Included were executives and innovators from national providers of health services, insurers, delivery systems, management consultancies, and device producers. I had attended a similar event several years ago when it was a much smaller and less diverse gathering. My expectation was that there would be some discussion of trends, new ideas and the environment. I was surprised by what I heard and the discussion in which I found myself participating.
I had hoped that there might be information that would add substance to my hope for a better future through innovation. The agenda was my first surprise. Over two days five topics were covered in depth by “panels” of three to five members. Each panel member made a presentation and then the panel and the group had a vigorous conversation that explored the material in depth while everyone add their insights and experience. It was my kind of meeting.
The list of topics reveals much about the current status of the evolution of care delivery and the discussions approached these timely topics to the mysteries and frustrations of what we call innovation.
- Disruptive Approaches to Population Health Management
- Total Cost of Care(“TCOC”) Contracting
- Measuring and Delivering Value
- Developing and Managing Care Bundles
- Population Health Management Infrastructure
My sense of what innovation is has certainly evolved over the past few years. I have been educated by my colleagues at Simpler to think about “innovation” as new products or changes in offerings that surprise and delight consumers. Sometimes the consumer is the patient, sometimes the consumer is the clinician or manager, and sometimes the consumer is the system. Innovations are not necessarily inventions. More often than not they arise as ideas that reassemble what is already existing into a new presentation or a new application.
“Improvements” are often confused with innovations but are not the same. Improvements occur within an established function or device and improve performance or add new efficiencies. The perfect example is the original iPhone. It was an innovation that was mostly assembled from things that previously existed. All the subsequent iPhones and competitor smartphones are improvements and not innovations.
As consumers we think of innovations positively but they are resisted by the status quo because they are at the core of the reality of capitalism that is called creative destruction. Every innovation dooms to irrelevance the product or process that preceded it. If you own the status quo, an innovation devalues and ultimately destroys the value that you own and control. Think about the future of the standard office practice in the era of the rise of the on demand primary care availability in pharmacies, in urgent care centers, and on the Internet. Even the venerable concept of the hospital is vulnerable in a variety of ways to the forces of creative destruction through programs of ambulatory surgery and the evolution of programs to provide better care in the home.
If you clicked on the link above you would have read:
Creative destruction refers to the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism’. The process of Schumpeterian creative destruction (restructuring) permeates major aspects of macroeconomic performance, not only long-run growth but also economic fluctuations, structural adjustment and the functioning of factor markets. At the microeconomic level, restructuring is characterized by countless decisions to create and destroy production arrangements. These decisions are often complex, involving multiple parties as well as strategic and technological considerations. The efficiency of those decisions not only depends on managerial talent but also hinges on the existence of sound institutions that provide a proper transactional framework.
The essence of the resistance to innovation from the status quo is characterized by the two sentences which I have bolded.
Adam Ward is an engineer at Simpler who has a long history in product development and innovation in industry. Adam attended the meeting with me. I asked him for his definitions of innovation and improvement. I was surprised when he introduced the concept of creative destruction as a part of innovation and then described the unavoidable destruction of the product or process that is replaced by the innovation. Notice his words that I have bolded.
I dislike the term "innovation" for what I do but it's the word Simpler has chosen. As a definition, I refer to this "Innovation" as idea-to-launch for future products and services that are not currently offered. There is some feature of the new offering that obsoletes the old one. Innovation gets in trouble when it imagines a solution without understanding the market or customer.
Improvement is removing all waste from the current operational process from order to fulfillment. It is focused on the repetitious task of creating one product/service unit after another with zero variation and minimal waste. It relies on an existing design to have already been created. Improvement can only go so far in controlling costs and customer demand as its levers add no additional value proposition beyond some cost control and increasing supply potential. Once a competitor has disrupted the service/product, no amount of improvement will gain back the lost market share or customer base. Improvement gets in trouble when it tries to appliance principles outside of its expertise area.
When you think of innovation in healthcare you probably were not thinking about it the way Adam Ward thinks about it and the list of subjects on the agenda of the conference may seem confusing. If you had been there with me and were able to listen to the panels and participate in the discussion, you might have been surprised to learn that the list of the greatest barriers to innovation does not include difficulty in the generation or development of new ideas. Beyond the resistance that is inherent between the status quo and the forces of creative destruction that exist in all industries there are other barriers for the innovator to vault in healthcare.
One well known innovator and entrepreneur in healthcare is Jonathan Bush. He is an interesting man who is the nephew of the first President Bush and the cousin of the second President Bush. He is the founder and CEO of cloud based Athenahealth and is noted for his aggressive business style and flamboyance in his attempt to foster change by challenging the standard EHR. During the conference I heard one approximate quote from Bush that thematically emphasizes the slow pace of change in healthcare. He was reported to have said something like,
“Healthcare is the only industry where you can say the same thing for ten years and still be a visionary.”
Athenahealth is a disruptive innovator that wants to provide physicians with cloud based information services that “lets doctors be doctors” and hopes that their products will provide transparency about costs and services for patients. You might be interested in a TEDMED talk where Bush gives his analysis of what is wrong with the current status of nonprofit care and what is possible if innovation and the power of market forces were allowed to make a profit improving care delivery.
Perhaps the foundation of the resistance to change and innovation in healthcare comes from its culture. Resistance to change is a logical extension of our well worn strategic admonition, primum non nocere, or if you prefer a slang translation, “If you can’t make it better, don’t make it worse”. That advice has served us well for as long as we can remember and predates the Hippocratic Oath. Certainly it is an ethical requirement that any new approach or treatment be at least as effective as the treatment or approach it replaces.
Healthcare finance, especially fee for service payment, was mentioned as a recurrent theme when the barriers to innovation were discussed. I was surprised that one of the most vigorous critics of fee for service payment, because of its negative impact on innovation, was a Vice President and Chief Strategic officer from a very large midwestern health system that is largely financed by fee for service payment. Importantly, no one defended the value of fee for service payment. Everyone at the conference seemed to recognize the difficulty of getting the attention of physicians and healthcare leaders for innovation when they were wearing themselves out trying to generate the volume of traditional services necessary to survive in the passing world of volume, even though no one expected that FFS would survive for long. It was also clear that no one knew when it would be gone or how it would be relegated to a less potent force as a part of a new process of value based reimbursement like ACOs or mechanisms of bundled payment.
The list of all the issues in the moment that I have lumped into the resistance of the status quo includes the nearly impossible jobs that face many clinicians and managers. Every available hour of the day is needed to do a job that in the end is inadequate. As my daughter in law once described her work as a medical assistant, it can be “soul sucking work”. We can’t expect them to accept the additional job of being innovators. People who are exhausted from running faster and faster in a race they can never ever win and where they are losing ground despite the fact that they are trying harder, can not do both today’s work and create tomorrow’s innovation. The old saw, “The harder I try the behinder I get” is their reality.
Making innovation possible may be the purview of large systems that have collected resources over the years, or of those entrepreneurs who see the opportunity to solve problems and create possibilities that free us from the drudgery of the current treadmill. Such innovations are out there. Ironically, the greatest challenge is not creating the product but getting the opportunity to demonstrate its benefit in a real system of care. It is a shame that an unstable business environment makes it harder to introduce new products or processes that can provide benefit for patients, relief for clinicians and an improvement in finance for the system. Atul Gawande has written about how hard it can be to get an innovation into common usage.
I am convinced that innovation will be the pathway by which we find our way to the Triple Aim, or if you prefer, the Triple Aim Plus One. Process improvement is essential but insufficient if we want to use fewer resources to do more for less. I am reminded of the wisdom of Dr. Ebert which I have quoted more times than I can count.
The existing deficiencies in health care cannot be corrected simply by supplying more personnel, more facilities and more money. These problems can only be solved by organizing the personnel, facilities and financing into a conceptual framework and operating system that will provide optimally for the health needs of the population.”
Dr. Ebert was rejecting conventional thinking. He was advocating innovative mechanisms for management and finance. He knew that fee for service funding of healthcare was antithetical to innovation and created a practice that was “prepaid”, supported by the most advanced IT systems obtainable at the time, and dedicated to bringing innovation to the practice of medicine, the delivery of care, and the preparation of the next generation of caregivers. It was a great idea and it was mightily resisted by the status quo. What Dr. Ebert was trying to do was even misunderstood and sometimes misdirected by those who were close to him, but progress was made. I see his spirit living on in the efforts of today’s innovators and believe that what he called for is coming closer every day despite the fact that the road to the Triple Aim has never been a superhighway. You can continue to expect a bumpy ride.
Summertime and the Living Is Easy
There is only one bad season in New Hampshire. The locals call it “mud season”. It is our “fifth season” that is a special time of mess and misery that lies between when the snow melts and the ground dries out. “Mud season” was mercifully short this year. Perhaps that is one advantage to global warming. Mud season is the only time of the year when I leave home without the sense that I might miss something that I will regret. My wife and I are often asked why we chose to retire to a little town in New Hampshire where the winters are long. The answer is that except for mud season every season has its special delights and it is easier to put on more clothes and build a fire when it is cold than to take off clothes when you are already nearly naked and the humidity and temp are both in the nineties.
I love summertime by a little lake where the watercraft are mostly kayaks, sailboats, the rare motorboat and no jet skies. The larger lakes get as busy and clogged with boats as the Southeast Expressway at five o’clock on Friday, but my little lake is like a country road. Those of us lucky enough to live here share at least one passion, the loons. We thrill to hear the loon’s evening calls and we get a buzz each time one pops up unexpectedly a few feet from our kayak.
The biggest question every year is whether the loons will successfully produce a baby. There is usually only one breeding pair of loons for every small lake. For years the environmental challenges precluded our loons from having any success. A few years ago environmentalist installed an artificial “loon nesting island” in a cove that provided protection from foxes, eagles, herons and all the other natural predators and then cordoned off the area to make it off limits for humans who would come by kayak. A big floating sign pleaded for the loons to be left in peace.
Each day in June I approach the barrier in my kayak to see if mother loon is still on her nest. For the last three years this routine has ended in a July disappointment. Sunday morning after a very noisy night of fireworks my wife heard the loon’s call. She asked my son and daughter in law who were sitting on the deck if they could see the loon. They answered that there were two loons near the dock. Knowing that if there were two together something was up, she rushed to discover the explanation and found that it was the first family outing for the proud parents and their chick, a scene which you can see in today’s header!
It was good that my spirits could be lifted by the baby loon since I was in a bad place having suffered through all the pain Saturday evening of the Red Sox losing to the not so good Angels team 21-2! How bad is that! Every day in Red Sox nation is an adventure. Some days they are champs and some days they are chumps. Tuesday, on the same evening that he was named to the All-star team along with Big Papi, Xander Bogaerts, Mookie Betts, Jackie Bradley, Jr., and Steven Wright, Craig Kimbrel was called in to pitch the ninth inning. The Sox were down 3-2 after all of the Red Sox “All-Stars” had blown several opportunities to score. Kimbrel’s job was to preserve the opportunity for the Sox to win in the ninth. What happened was sad. He got no one out and was sent to the showers with the score a nearly hopeless 7-2. Wednesday was better. There was no game yesterday and I will be in the stands tonight hopping that the Sox will give me a birthday present. The outlook at the lake over the next few months is great and I hope that there will be more ups than downs at Fenway and that perhaps the journey will continue into the fall.
I hope that where you are the living is easy this summer and that you are getting to do all the things that make your summers great. There will be a lot to keep us interested between now and Labor Day. The politicians are headed to Cleveland and Philly. Who knows what will happen in Rio with the Olympics, but we will soon see. One of the few things we control for sure is whether or not we will get out and enjoy the summer. I hope this will be a great weekend in the wider world for you! |
| Be well, stay in touch, and don’t let anything keep you from doing the good that you can do every day,
Gene
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