A new normal

Some say that our economy is on its way to a slow recovery.  Well that’s good.  But are we returning to?  How it was before we knew that geeks with formulas were messing with assumptions of risk?  Likely not (help us, please!).  But memories are short

influx asks:

What happens if instead of waiting for normality to return, we are lurching forward towards a new normal that looks nothing like the old one?

Have you thought about that?  The reality of this stuff is staggering (and impactful on already-faltering business models).

influx continues:

The future is not about producing less or more of what you currently make or do, but re-thinking it all.

Now is the time to discover and imagine what those new things could be and there’s probably never been a better time to do this. Across whole categories people are applying a very critical eye and filter to determine what’s wrong and excessive and what feels precisely right.

Familiar concepts like price, value and quality are all in the process of being re-defined and re-thought.

Simply assuming the same old rules apply is naive and misguided. Every single brand should be out there learning and trying to work out what can make them relevant for this new future. For anyone involved in thinking strategically and/or creatively about these challenges, these should be very exciting times.

Exploring service-line delivery

The latest McKinsey Quarterly has an article on the conversion from the traditional full-service hospital to one that focuses on service-line excellence (free registration required).  It’s a bit Porteresque.

It could be a great idea.  But there’s one big problem.

If you are unfamiliar, a service-line strategy means a hospital selects several service lines to focus upon (think nephrology, cardiology, neurology, etc).  It is sort of happening when hospitals tout “centers of excellence.”

It’s specialization.  A service-line strategy, in theory, means a hospital directs more resources toward what it does best.  The hospital then treats more patients in these service lines.  Quality should go up.  Prices should go down.

The problem with service-line specialization in the United States is our disproportionate system of paying for health care.  Cardiology and cancer make a lot of money.  Psychiatry and infectious diseases don’t.  There’s a big distinction between the two groups.  You can guess what kind of services hospitals would prefer to offer.

The Revolution from Below (and the Edges)

I oft wonder why our system has been broken for so many years. And for so many years why nothing has changed—why has it worsened? And I don’t know the answers. To be honest, I couldn’t care less about the explanations for why, the reason I have entered this industry is to help rectify the situation. I’m not just talking about affordable care and access for all, I’m also including making health care personable, responsive, adaptable, innovative, enjoyable, etc. (And believe me, there is a lot of E-T-C.)

I’m sure someone, somewhere, at some time has shared the same thoughts—but the struggle continues. I can’t help but think that this time is different. That our generation’s efforts will be different. I have no business doing what I’m doing if I didn’t feel this way. I have respect for what you do and what you have built, but if it makes little sense and stands in the way of changing what we have for the better, don’t expect me to nod my head in agreement as you defend the archaic system.

Do you know what is great? How scared people are of “millennials.” Do you know why this is great? Because being scared means things are changing. If you have googled “managing millennials” you know what I am talking about.

Health care should be the most scared of any industry—its general opposition to change is in for a huge shake-up at all levels. The only thing I’m going to apologize for is the topsy-turvy future this is going to create. We would like to make (positive) change collaboratively. But we’re going to do it whether or not you’re on the bus.

Stick us at the bottom, we’ll change it from below. Marginalize us and we’ll start at the edges.

Chet Gulland guest posted at Noah Brier’s blog this week. He writes on young people graduating and the annual “entering the workforce” conversation:

Here’s the little story I’m picking up on: Millennials have reached critical mass in the workplace (front edge 27ish now), are exerting some real power and influence on business and culture, have more like-minded folks coming in behind them that amplify their perspectives, and now, according to some folks, it’s time to get defensive.

But Chet reminds us it need not be a war:

In this complex story of who this generation is and what they mean, I think the biggest (and most exciting) point is missed if we don’t look at everything through the lens of the changed digital communications DNA that they are the leaders of. The great upside to this, as Shirky points out, is that all generations benefit. The way young people operate and the tools they use spread everywhere. The new ways they are organizing themselves will spread everywhere (I’ll be surprised if the biggest, most historic story this year is not about how young people organized themselves to vote in their choice to the White House). I think this is a healthier way to look at the situation. We can be excited that we can work and collaborate with a group that brings a fresh approach to communication, among many other things.

So, together, please, together. I know I’m idealistic. But it beats being pessimistic and stagnant.

What are we measuring?

So it has become apparent (to me) that our methods of measuring return on investment in health care are flawed.

Prevention’s savings are debatable. The NEJM: “Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question.” PLoS: “Although effective obesity prevention leads to a decrease in costs of obesity-related diseases, this decrease is offset by cost increases due to diseases unrelated to obesity in life-years gained.”

OK, but what about the individual lives saved? How about the extra years of quality living?

Value of care assessments at hospitals are numerous and have a long way to go.  Consumer Reports is trying something new according to Comarow on Quality:

Unlike the magazine’s trademark tables with little filled-in colored circles showing how well hospitals perform various procedures or deliver types of care, these rankings show how aggressively or conservatively—longer or shorter stays, more or fewer tests and specialist visits—patients are treated at a hospital relative to all other hospitals. The rankings are based on Medicare patients in the last two years of their lives who had been hospitalized any number of times during that period for any of nine chronic conditions—heart failure, dementia, and coronary artery disease are three. Adjustments were made to compensate for some patients being sicker than others.

Kaiser: “Health information technology by itself is unlikely to produce the significant cost savings projected by economic analysts and policymakers, according to a Congressional Budget Office analysis.”

OK, but what about reduced medical errors or the existence of continuity of care? Health Populi writes:

The ROI-rationale for the widespread adoption of health IT in the U.S. is a macro, national one. It’s a public health calculation that’s been mired in commercial/private health arithmetic. The denominator of these wrong-headed ROI calculations has been wrong-chosen: it’s been the individual physician practice, or the hospital, or the single health plan. The denominator is the public’s health.

As we begin to make decisions that will change our health care system, our measurement of the impact of those changes will have to evolve as well.