The Latest Grand Prescription for the Healthcare Industry: Shall We All Line Up and Implement?

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It may be a reflection of the current importance of healthcare reform (or, the cynical might put it, the extent of the healthcare “mess”) that Harvard Business Review is paying it more attention.  We previously reported on their identifying the Cleveland Clinic as a model for service organizations.

Now in the October issue it is offering “The Strategy That Will Fix Health Care” in an article by Michael Porter and Thomas Lee.  Porter is the number one authority on business strategy; his Competitive Strategy is perhaps the most important book ever written on that topic.  He previously wrote “A Strategy for Health Care Reform – Toward a Value-Based System” in the New England Journal of Medicine for July 9, 2009.

Lee is a professor at Harvard Medical School and Chief Medical Officer at Press Ganey, the consulting firm whose surveys were, before HCAHPS, the number one (but much criticized) source for evaluating hospitals.  He was previously network president for Partners HealthCare, which has been described as a behemoth of hospitals.

In a sidebar, the authors cite eight prior “movements,” all of which were supposed to revolutionize and straighten out the healthcare system, but none of which actually did so.  They might have added innovation, which, as previously reported here, was hailed by Inc. in October 2012 as the driving force behind “The Coming Revolution in Health Care”.  In any case, their belief that none of these ideas was a panacea because none of the addressed root causes no doubt is correct!

The first failed panacea is anti-fraud regulation, an admittedly worthy objective that even has a global network working on it.  But while fraud is obviously to be combated, its reduction not only does not solve other inherent problems but cannot lower more than a relatively small portion of the costs.

The second is consumer-driven healthcare.  The authors note that people are not necessarily objective and capable when it comes to evaluating health services and that to some extent the push for this objective has simply meant transferring more costs to patients.

page1-120px-2007_inact_stretchedexp_residuals.pdfThe third is evidence-based medicine.  But the idea that guidelines can precisely be followed is thwarted by the fact that every case has its own features.  Moreover, any written source will become out of date so that the whole concept may be flawed.

The fourth is new models of primary care such as “retail clinics”. These may be making money for some people, but their overall impact on healthcare could well be negative.

The fifth is capitation. There seems general agreement that lump-sum payments, as introduced in the 1990s, did not work and variations on this idea are very problematic.

The sixth is error reduction, another important concern that for which unfortunately too much has been claimed.  Great as the need for reducing medical errors is, such efforts can’t in themselves fundamentally change the healthcare systems or lower costs that greatly.

The seventh is care coordination. The authors have nothing against the principle, but note that if is to be effective it has to be more extensive and that claims for its having a major impact have not been proved.

The eighth is electronic medical records.  One again this is an idea that was supposed to make

computer system

major reductions in healthcare costs but could actually wind up increasing them.

So what do these two experts recommend instead?  They offer a six point program.

First, healthcare must be organized into integrated practice units, “a dedicated team made up of both clinical and nonclinical personnel provides the full care cycle for the patient’s condition.”  These will provide not simply medical treatment but education, counseling and the like.

Second, outcomes must be measured that matter to patients.  Such outcomes  include health status, the cycle of care and recovery, and the sustainability of health.

Third, there must a move to bundled payments for care cycles.  This is the way to directly reward increased value of care.

Fourth, institute integrated care delivery systems.  Although most hospitals are now part of a system, they are only loosely connected and there is thus duplication and fragmentation.

Fifth, providers need to expand their geographical outreach.  But such expansion cannot be just a matter of more mergers and acquisitions and a quest for profits: it must be premised on increasing value, not just volume.

Sixth, is having an “enabling” information technology platform.  Despite all the emphasis on IT in healthcare, this function cannot be siloed but must be integrated so as enhance value.

All told, a grand prescription!  The authors are highly expert, the details of their plan are very convincing, and the article will no doubt be very influential.

Yet how is it all supposed to happen? Strategy is meant to be implemented, but how will these numerous and significant changes occur? Are we all supposed to put down our copy of HBR, line up and get to work on it?

After all, while the authors obviously can influence many a CEO, what they are prescribing goes far beyond what any organization or leader could bring about.  We’ve seen how difficult even incremental change in healthcare is.  In some countries, the healthcare system is run by the government so that reform can be imposed politically, but the United States is not one of these.

predictionHence a prediction: Five or ten years from now there will be another HBR article on this topic.  The six ideas of Porter and Lee will be in a sidebar as failed remedies, and the authors will offer some number of new recommendations.

Grand strategy may be of use for healthcare, and the ideas in this article may resonate with the elite audience for which it is most intended and could even lead to some changes.

Jim murphy

But for most of us, ideas that are more down to earth and that could be implemented by everyone at all levels of the organization might be more useful.

Jim Murphy has a solo consulting practice called Management 3000, focusing on organizational development and change management. Formerly he led the Massachusetts Bay Organizational Development Learning Group, was Human Resources Director for the City of Boston Assessing Department, and served as a consultant with the Boston Management Consortium.  His consulting practice includes management coaching as well as research and writing on employee relationships, leadership, healthcare and collaborative practices.  Having produced newsletters for several organizations  and being a frequent content writer for the”Confident Voices in Healthcare” blog, he is interested in writing and research opportunities, as we all consulting and coaching.

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2 Responses to The Latest Grand Prescription for the Healthcare Industry: Shall We All Line Up and Implement?

  1. Wayne G. Fischer, PhD says:

    Your “drive by” descriptions of evidence-based medicine and error reduction show a basic lack of understanding of both. If you’ll research them you’ll find both are working as claimed: improving the delivery of healthcare and its outcomes, while simultaneously reducing costs and improving patient safety.

    What healthcare doesn’t need is bloggers bloviating in provocative ways to gain attention.

  2. Hi Jim,

    Thanks for writing this provocative and I think, exciting post. Honestly, I don’t think these six points are going to be any more effective than the eight failures before them. The ideas may be good in many respects, as are computerizing records, eliminating fraud, and using evidence to drive treatment, BUT because they are solutions that ignore underlying problems, they do NOT work!

    The biggest underlying issue is the system is driven by making fortunes rather than serving our people. A secondary, yet related underlying issue, is that the people who provide the service are fragmented.

    Two critical steps are needed if we are going to bring about serious i.e. fundamental change:
    A) We need a vision of healthcare that we can commit to as a nation that includes a clear priority of care over money. As long as it is ok to make fortunes from other people’s illnesses or injuries, this will continue to inform and fragment our work.
    B) Focus on communication, collaboration and emotional intelligence skills for all healthcare and related professionals in organizations and in education. If we do this, we’ll be able to eventually create our own vision based on HEALTH and CARE. (This is why I am so obsessed with Medical Improv…it does this!)

    There are other important parts to the puzzle, like social and educational programs that promote health and in fact the grand prescriptions listed in your article would probably work better if….IF….we change the foundation. If we don’t, we’ll keep doing this dance of fixing…not fixing….

What are your thoughts?