Will Tech Revolutionize Health Care This Time?

by joeflower on May 27, 2014

First published in Hospitals and Health Networks Daily, the online publication of the American Hospital Association, on May 27, 2014.

After decades of bravely keeping them at bay, health care is beginning to be overwhelmed by “fast, cheap, and out of control” new technologies, from BYOD (“bring your own device”) tablets in the operating room, to apps and dongles that turn your smart phone into a Star Trek Tricorder, to 3-D printed skulls. (No, not a souvenir of the Grateful Dead, a Harley decoration or a pastry for the Mexican Dia de Los Muertos, but an actual skullcap to repair someone’s head. Take measurements from a scan, set to work in a cad-cam program, press Cmd-P and boom! There you have it: new ear-to-ear skull top, ready for implant.)

Each new category, we are told, will Revolutionize Health Care, making it orders of magnitude better and far less expensive. Yet the experience of the last three decades is that each new technology only adds complexity and expense.

So what will it be? Will some of these new technologies actually transform health care? Which ones? How can we know? 

There is an answer, but it does not lie in the technologies. It lies in the economics. It lies in the reason we have so much waste in health care. We have so much waste because we get paid for it.

Yes, it’s that simple. In an insurance-supported fee-for-service system, we don’t get paid to solve problems. We get paid to do stuff that might solve a problem. The more stuff we do, and the more complex the stuff we do, the more impressive the machines we use, the more we get paid.

A Tale of a Wasteful Technology

A few presidencies back, I was at a medical conference at a resort on a hilltop near San Diego. I was invited into a trailer to see a demo of a marvellous new technology — computer-aided mammography. I had never even taken a close look at a mammogram, so I was immediately impressed with how difficult it is to pick possible tumours out of the cloudy images. The computer could show you the possibilities, easy as pie, drawing little circles around each suspicious nodule.

But, I asked, will people trust a computer to do such an important job?

Oh, the computer is just helping, I was told. All the scans will be seen by a human radiologist. The computer just makes sure the radiologist does not miss any possibilities.

I thought, Hmmm, if you have a radiologist looking at every scan anyway, why bother with the computer program? Are skilled radiologists in the habit of missing a lot of possible tumors? From the sound of it, I thought what we would get is a lot of false positives, unnecessary call-backs and biopsies, and a lot of unnecessarily worried women. After all, if the computer says something might be a tumor, now the radiologist is put in the position of proving that it isn’t.

I didn’t see any reason that this technology would catch on. I didn’t see it because the reason was not in the technology, it was in the economics.

Years later, as we are trending toward standardizing on this technology across the industry, the results of various studies have shown exactly what I suspected they would: lots of false positives, call-backs and biopsies, and not one tumor that would not have been found without the computer. Not one. At an added cost trending toward half a billion dollars per year.

It caught on because it sounds good, sounds real high-tech, gives you bragging rights (“Come to MagnaGargantua Memorial, the Hospital of the Jetsons!”) — and because you can charge for the extra expense and complexity. There are codes for it. The unnecessary call-backs and biopsies are unfortunate, but they are also a revenue stream — which the customer is not paying for anyway. It’s nothing personal, it’s just business. Of course, by the time the results are in saying that they do no good at all, you’ve got all this sunk cost you have to amortize over the increased payments you can get. No way you’re going to put all that fancy equipment in the dumpster just because it fails to do what you bought it for.

Is this normal? Or an aberration? Neither. It certainly does not stand for all technological advances in health care. Many advances are not only highly effective, they are highly cost effective. Laparoscopic surgery is a great example — smaller wounds, quicker surgeries, lower infection rates, what’s not to like? But a shockingly large number of technological advances follow this pattern: unproven expensive technologies that seem like they might be helpful, or are helpful for special rare cases, adopted broadly across health care in a big-money trance dance with Death Star tech.

Cui Bono?

But that is in health-care-as-it-has-been, not in health-care-as-it-will be. How we think about the impact of new technologies is bound up with the changing economics of health care.

Under a fee-for-service system the questions about a new technology are, Is it plausible that it might be helpful? What are the startup costs in capital and in learning curve? And: Can we bill for it? Can we recoup the costs in added revenue?

In any payment regime that varies at all from strict fee for service (bundled payments, any kind of risk situation), whether we can bill for it becomes irrelevant. The focus will be much more on efficiency and effectiveness: Does it really work? Does it solve a problem? Whose problem?

Many times, extra complexity and waste are added to the system for the convenience and profit of practitioners, not for the good of patients. For example, why do gastroenterologists like to have anaesthesiologists assisting at colonoscopies, when the drugs used (Versed and fentanyl) do not provoke general anaesthesia and can be administered by any doctor? The reason is simple: It turns a 30-minute procedure into a 20-minute procedure. The gastroenterologist can do three per hour instead of two per hour. In the volume-based health care economy, they make more money. The use of the anaesthesiologist adds an average of $400 per procedure to the cost without adding any benefit, lowering the value to the patient. Altogether this one practice adds an estimated $1.1 billion of waste to the health care economy every year.

[Edit: Diane Brown, MD reminds me that for safety it is best to have a pair of eyes dedicated to monitoring the anesthesia. But it need not be an anesthesiologist. It can be a nurse trained to the task, a regular member of the endoscopy team.]

So in thinking about whether these new technologies will propagate across health care, we can ask how exactly they will fit into the ecology of health care, who will benefit from their use, and how that benefit will tie in to the micro economy of health care in that system, with those practitioners and those patients.

Change Is Systemic

A cardiologist in an examining room whips out his iPhone and snaps it into what looks like a special cover. He hands it to the patient, shows the patient where to place his fingers on the back of the cover, and in seconds the patient’s EKG appears on the screen. Dr. Eric Topol, speaking at last summer’s Health Forum Summit, performs a sonogram on himself on stage using a cheap handheld device. These things are easy to imagine in isolation, as something a single doctor or nurse might do with an individual patient.

In reality, in most of health care, the things we need to do to incorporate such technologies are systemic. To be secure, reliable, HIPAA-compliant and connected to the EMR, they can’t be used randomly by the clinicians who happen to like them. They must be tied into and supported by the IT infrastructure.

Similarly, in moving from “volume” to “value” we are talking about changes that don’t happen at the level of a single doctor or single patient. In most cases we cannot treat the patients for whom we are at risk differently from those we are treating on a fee-for-service basis. When you are paid differently, you are producing a new product. When you are producing a new product, you are a beginner. The shift from “volume” to “value” demands and dictates broad systemic changes in revenue streams, which dictate changes in business models, compensation regimes and governance structures. Getting good at these new businesses means changing practice patterns, collaboration models and cultures.

Hospitals, integrated health systems and medical groups face a stark choice: They can either abandon the growing part of the market that demands a “value” business arrangement and stick to the shrinking island represented by old-fashioned “volume” arrangements. Or they can transform their entire business.

The use and propagation of these new low-cost technologies are entirely wrapped up in that decision. In old-fashioned fee-for-service systems, they will be used only where their use can be billed for, or where they lower the internal costs of something that can be billed for. They will not be used to replace existing services that can be billed at higher rates.

“That’s a Lot of Money”

Dr. Topol in his talks likes to make the point that there are over 20 million echocardiograms done in the United States every year at an average billing of $800. As he puts it, “Twenty million times $800 — that’s a lot of money. And probably 70 to 80 percent of them will not need to be done, because they can be done as a regular part of the patient encounter.”

Precisely: That is a lot of money. In fact, it’s a big revenue stream. It’s difficult to imagine that fee-for-service systems for which various types of imaging, scanning and tests represent large revenue streams are going to be early adopters of such technologies that diminish the revenue streams to revenue trickles. When you are paid for waste, being inefficient is a business strategy.

In the “value” ecology of the Next Health Care, the questions are much more straightforward: Does it work? Does the technology make diagnosis and treatment faster, more effective, more efficient? Does it make it vastly cheaper?

Imagine replacement bones (and matrices for regrowing bones) 3-D printed to order. Imagine replacement knee joints, now sold at an average price of €7000 in Europe and $21,000 in the United States, 3-D printed to order. (Imagine how ferociously the legacy makers of implants will resist this change, and how disruptive it will be to that part of the industry.)

Imagine the relationship between the doctor, the nurse and the patient with multiple chronic conditions, now a matter of a visit every now and then, turned into a constant conversation through mobile monitoring.

Imagine a patient at risk for heart attack receiving a special message accompanied by a special ring tone on his cell phone — a message initiated by nano sensors in his bloodstream — warning him of an impending heart attack, giving him time to get to medical care.

Imagine all of this embedded in a system that is redesigned around multiple, distributed, inexpensive sensors, apps and communication devices all supporting strong, trusted relationships between clinicians and patients.

Imagine all this technological change supported with vigor and ferocity because the medical organizations are no longer paid for the volume they manage to push through the doors, but for the extraordinary value they bring to the populations they serve.

That’s the connect-the-dots picture of a radically changed, mobile, tech-enabled, seamless health care that is not only seriously better but far cheaper than what we have today.


Being against Obamacare has been the keystone, the capstone, the mighty sledgehammer, the massive metaphor of your choice for the right for five years now. They couldn’t stop it from being passed. They couldn’t stop it at the Supreme Court. They weren’t able to choke it off by “defunding” it. They rejoiced at the rubber-meets-the-sky rollout of Healthcare.gov, but then the kinks got worked out of that. They railed at the administration using discretionary powers built into the law to help it work better. Every horror story of Obamacare ruining people’s lives they came up with turned out to be false. Almost all of the people cynically cancelled by the insurance companies as a way to sell them more expensive insurance got insured again fairly quickly. Then 7 million people signed up on the exchanges, and altogether some 10 million formerly uninsured people now have medical coverage.

But the right still needs to call it a “train wreck.” The magic mantra has to work for them. Just this morning, here’s a Republican Congressman saying that we have to cut Food Stamps because: Obamacare. Say that again slowly?

It’s getting harder and harder on the right to come up with new ways to say it isn’t working when it actually seems to be working. I have to hand it to them, though: Those spin factories are filled with hard-working creative people. Get to work early, stay late, trash Obamacare. Hey, it’s a living.

So what’s the latest?

So what’s the latest? This fall, Obamacare premiums are going to “skyrocket”!

Health and Human Services (HHS) Secretary Kathleen Sebelius went before a House Ways and Means Committee hearing a few weeks ago and claimed outrageously that premiums on the exchanges are likely to rise for 2015, but not by much, and certainly more slowly that in the past.

What? How can this be? Yet another Administration figure has been trotted out to claim baldly to Congress and the American people that Obamacare is basically going to do all right.

TheHill.com got right to work and managed to come up with what they claimed were health insurance company officials eager to forecast that they would have to triple their premiums or more — and they would be rolling out those jack-ups right in time to deal a blow to Democratic chances in the fall elections. TheHill then published it under the breathless headline: “O-Care premiums to skyrocket.”

Neat, huh? Maybe a little too neat. Let’s see whether this claim makes sense.

Capped MLRs: Under the ACA, insurance companies must pay out at least 80% to 85% of premiums for actual medical costs, depending on the type of plan. These are “medical loss ratios” (MLRs). That’s the law. The other 15 to 20% is all they get for administration, advertising, executive bonuses — and profit. If they arbitrarily jack up rates, so that they are paying out a lower proportion in medical costs, they have to give the excess back to the rate-payers. The federal government has already forced some insurance companies to do this.

Those anonymous company officials who complained to TheHill claimed that “everybody knows” that higher costs imposed on the insurance companies by the botched Obamacare rollout will have to be passed on to consumers. Is this is true? Were there huge costs to the insurance companies? Doesn’t matter. Unless they plan to break the law and falsely report their MLRs, these alleged extra costs still have to be absorbed in that 15 to 20%.

So the only reason that they would be able to make premiums “skyrocket” is if the actual healthcare costs per person “skyrocket.” So how are healthcare costs doing?

Healthcare costs: Yes, healthcare costs (National Medical Expenditures) are continuing to go up — at a rate lower than 2%, the lowest rate that has been counted in the 50 years that they have been counting. Not a skyrocket.

But maybe they mis-guessed on 2014, and holy moly, they’re suffering! Or maybe they purposely under-priced their offerings in 2014 to gain market share. So they have to make up for it in 2015?

Price war: Talk to insurance marketing and sales people. I do a lot. They’ll tell you that you really don’t want to be the low-price leader. If you purposely under-price the market, you get the people who buy on price alone, and these are not anybody’s favorite customers. They will buy the cheapest product you offer this year, then drift away for someone else next year, when you have to raise the premiums. And you will have to raise your premiums, because your MLR came in at 110% — you’re spending more on medical care than the premium brought in, and you just can’t do that year after year.

So no, price wars are not the thing to do in healthcare insurance.

But maybe they guessed wrong on how expensive these new people are going to be with their new medical insurance?

Actuarial risk: It would be reasonable to assume that the insurance companies took their best shot at the actuarials for 2014. These are new markets and new customers, and there are lots of them. It’s a “bet the company” deal to get it wrong by any major amount. They have already figured in the really sick people who couldn’t get insurance before, and the bump in utilization from not-sick people who are newly insured and getting various problems taken care of, and so on. Looking forward to 2015, there is no new, extra actuarial bump in the offing, except that more of the uninsured, having missed the window this year, are likely to sign up when the window opens again in the fall.

But what about the balance of young and old?

Death spiral: What about the dreaded “demographic death spiral,” with too few healthy young people signing up to balance out the 50-somethings and the chronically ill? Didn’t happen. Apparently a pretty good percentage of young healthy people signed up, especially in the last surge, enough to come close to the Administration’s projections and hopes. Now, of course, you can always just claim that the Administration is “cooking the books,” that’s an easy out. But my read is that the Administration, having been seriously burned on the “you can keep your insurance, you can keep your doctor” misstatement, is actually being quite cautious in its claims. I am not seeing any dancing in the end zone here.

But what if a particular insurance company got it wrong in a particular market? Won’t they get burned badly and have to jack up rates to make the loss back?

The Three Rs: The insurance companies are back-stopped by each other and the federal government if they guessed seriously wrong through the provisions in the law called the “Three Rs” (reinsurance, risk corridors, and risk adjustment). No one is going to be “forced” to make their rates “skyrocket.” If they want to stay in the market, they will be looking for very moderate increases.

Still, aren’t the insurance companies themselves saying that things are way out of whack, they are taking it in the shorts, and they are going to have to jack up premiums for 2015? Actually, no, they are not.

How the insurance companies really see it: There are plenty of reasons to believe that running most citizens’ healthcare financing through for-profit public companies is a bad idea. But it does have at least one advantage: unlike not-for-profits, for-profit public companies by law have to show a certain amount of transparency. They have to open the doublet and show us what they’ve got. In annual reports, in 10Ks, and in conference calls with Wall Street analysts, what CEOs and CFOs say has legal weight. Of course they want to sound positive, because they would like to drive the stock price up. But material forward-looking misstatements can get you sued by your shareholders. So unlike in alleged anonymous unattributed whines to political blogs, public company executives have some care about what they say.

And what are they saying? They’re doing fine. Wellpoint, one of the nation’s largest health insurers (it operates many of the for-profit Blue Cross/Blue Shield plans) recently raised its earnings projections. Why? According to CEO Joseph Swedish, mostly because way more people signed up for its Obamacare plans than it expected. Think about that: This also clearly means that Wellpoint expects to make money off of all those new customers at the prices they were quoted. Absent some huge demographic or actuarial bump, they don’t expect that they will have to “skyrocket” premiums next year to make up for some mistake.

This is just the latest in a string of positive financial projections since the first of the year from all the big for-profit insurance companies, including Aetna, Cigna, Humana, and UnitedHealth Group. Swedish at least doesn’t think this is temporary. In the same analysts call, he predicted that Wellpoint is currently in a position to “drive profitable growth over the next several years.”

So: Actual healthcare costs are almost flat. Healthcare insurers don’t really do price wars. They were serious about their actuarial guesses for 2014, including all the new expenses of really sick people and the previously uninsured. The “demographic death spiral” did not really appear. The Three R’s protect the insurance companies from getting the risk seriously wrong. And in public, when misstating things could get them into big lawsuits, they say they are doing fine, they can handle the risks, and they expect to make money.

So no, there is no reason to believe that rates for 2015 are going to shoot up, “skyrocket,” explode, use metaphor of your choice here. None.

There is plenty to find fault with in the ACA, and plenty of room to debate about the perfect way to reform healthcare. But I would expect people who want to add to that debate to come armed — with things like research, logic, facts, real quotes from real people, and an understanding of how this industry actually works.


Strategies for Doing More with Less

by joeflower on March 29, 2014

(Originally published in Hospitals & Health Networks Daily 3/25/14)

The conversation has changed.

The old conversation: “You cost too much.”

“But we have these sunk costs, patients who can’t pay…”

“Okay, how about a little less, then?”

The new conversation: “You cost too much. We will pay half, or a third, of what you are asking. Or we will take our business elsewhere. Starting now.”


Exactly: How will you survive on a lot less money? What are the strategies that turn “impossible” to “not impossible”?

New Strategies

The old conversation arises from the classic U.S. health care model: a fully insured fee-for-service system with zero price transparency, where the true costs of any particular service are unknown even to the provider. The overwhelmingly massive congeries of disjointed pieces that we absurdly call our health care “system” rides on only the loosest general relationship between costs and reimbursements. It’s a messy system littered with black boxes labeled “Something Happens Here,” full of little hand waves and “These are not the droids you’re looking for.”

With bundling, medical tourism, mandated transparency, consumer price shopping, and reference pricing by employers and health plans, we increasingly are being forced to name a price and compete on it. Suddenly we must be orders of magnitude more precise about where our money comes from and where it goes: revenues and costs. We must find ways to discover how each part of the strategy affects others. And we need some ability to forecast how outside forces (new competition, new payment strategies by employers and health plans, new customer handling technologies) will affect our strategy.

Key Strategy Questions

For decades, whenever some path to profit in health care has arisen (in vitro fertilization, urgent care, retail, wellness and the others) most hospitals have said as if by ritual, “That is not the business we are in.” As long as we got paid for waste, few health care organizations got serious about rooting it out. And most have seemed content with business structures that put many costs and many sources of revenue beyond their control.

In the Next Health Care the key strategy questions become:

  • Why are you not capturing as many revenue streams as possible?
  • Why are you not capturing as many savings as possible?
  • Why don’t you have a business structure that converts savings into profit?

Different Revenue Streams

The new environment brings a number of different revenue streams, each with different characteristics. These include:

Bundled offerings and medical tourism. The game here is to lower costs through efficiencies and scale, lower the price and make it up on volume.

Primary stream. Medical homes, direct pay primary care, urgent care and retail care each have their own revenue streams which may include pay-for-performance or other quality payments, per patient per month prepayments, or fee-for-service. This is genuine revenue, but your very success in the primary sphere will (and should) cut your income from the emergency department, as well as many expensive and profitable inpatient and outpatient procedures.

Onsite clinics. Medical homes run on a “cost plus” basis; these bring some income and have the same effect as other primary care streams.

Capitation. Like Kaiser Permanente, where the monthly premium plus co-pays or coinsurance cover everything in system-owned facilities with staff clinicians. Capitation spreads costs and revenues across the system, at least nominally aligning the incentives of all involved. The Kaiser structure, for instance, automatically rewards the physicians for efficiency and effectiveness: Half of the system margin (profit) every year goes directly to the Permanente Medical Groups.

Subscription (mini-cap). Payment per patient (or employee) per month buys all care for a specific condition, such as diabetes or back care. This drives efficiencies (to keep the cost down) as well as effectiveness (to keep the contract).

Classic fee-for-service. This will likely always remain as some portion of your revenue. Its incentives oppose those of most other revenue streams.

The Problem

The organization that is prepared for these different streams is most likely a different kind of organization from what you now have.

The problem you are trying to solve is not making the most money, or making your life as comfy as possible, or saving particular jobs, or even saving your institution. The reason your problem is so hard is that it is a five-dimensional Rubik’s cube. Imagine these dimensions crossing and interacting:

  • How do we heal the sick and keep people well, with …
  • the resources, capacities, physical plants and people that we have, and …
  • the revenue streams we have, can capture or can create, given …
  • the wants, needs and attitudes of various large payers in the area, and …
  • the various other payers in the region, state, nation or world that might bring business your way.


There are three types of savings possible in a health system:

  1. Doing the same procedures and tests, but as leanly as possible;
  2. Correcting the medical problem using the least expensive and intrusive way possible (substituting medical therapy for unnecessary surgery, for instance); and
  3. Preventing the need for doing anything at all.

Under fee-for-service, all three are a cost to the hospital. This is why we are not very skilled at capturing and reducing costs. Under any other payment system, we need to get fierce and intentional about capturing, characterizing and cutting internal costs.

Is this possible? Imagine going through every service, from performing a pregnancy ultrasound to excising a brain tumor, and just doing the arithmetic. Run down every step of every task, the labor cost of the person doing it, the actual cost of the supplies involved, then throw in something for overhead and for margin. Add it up to determine how much it costs you to install a hip or repair a hernia. That’s “time-driven activity-based costing” or TDABC.

For the last few years Harvard’s Michael Porter and Robert Kaplan have been running exactly such programs at MD Anderson, the Cleveland Clinic, the Mayo Clinic, Boston Children’s, Brigham and Women’s Hospital and other top hospitals.

Rigorous, tough, time-consuming, expensive to do, yes, but combined with lean manufacturing techniques, such analysis can drive real costs down. Organizations find that they do many things that don’t help, or that could be done by someone less highly trained and expensive. MD Anderson, for instance, was able to cut the staff in its pre-operative anesthesia center by 17 percent while seeing 19 percent more patients and while dropping the internal cost by 46 percent with no loss of quality.

If this seems impractically difficult, it’s still where we have to go. We simply must know our real costs, how we can cut them and which costs we can safely cut.

Targeting (market segmentation). An old subject in these columns, more relevant here than ever: Five percent of the patients generate 50 percent of the costs, 1 percent generate 20 percent — and many are in those categories for months and years with poorly addressed chronic problems. Under fee-for-service they are a revenue source, if they have a payer. Under other business models, they are a cost, while driving costs down by taking better care of them is a big revenue source. The algorithm: Find the chronic high-cost patients whose health you can actually affect. Be at risk for their costs. Put a crew on it. Drive the costs down dramatically. Programs at Boeing, at the AtlantiCare Special Care Center in Atlantic City, N.J., and elsewhere prove that you can drive their costs down by 25 percent or more — thereby driving down the costs of the whole population by 12 percent or more.

Outreach. A well-designed, vigorous medical-home outreach program, staffed with real humans in the community, run out of clinics and primary care offices in the community, will do the same thing without the market segmentation. If you call everybody, you are going to spend the most time with those who need the most help. It’s highly efficient: The Vermont Blueprint drove down overall costs for the whole population it served by 12 percent, with a total staff cost of $17 per patient per year. Peanuts. Bupkis. Lost in the noise.

Trust. It’s the least understood business efficiency engine. Outreach that changes people’s lives, gets them compliant with medication, gets them to eat differently or find a way to kick the addiction does not come from cold-calling by unqualified strangers reading scripts. It must be built on trusted relationships, a nurse or doctor who lives in your community and knows you, calling up or coming to see you. Expensive? Highly efficient, because it works.

Docs on board. You need to work strongly with the physicians. This means more than hiring them or buying their practices. It means getting them on board with the new business models, which means finding not only where the costs are, but how those costs become profit across the organization. So primary care physicians who help the bottom line by keeping people out of the ED and the surgical suite should benefit from that and see it as part of their business model.

Population health management. Investigate the special health needs of your population, asking particularly: What turns into medical costs? What would it take to reduce those costs? Develop preventive programs with others in the community. Don’t assume that you can’t make a difference. The Healthy Communities movement and the AHA’s own Association for Community Health Improvement share many success stories of reducing teen pregnancy, drunk driving, addictions and other risky behaviors in communities.

Be your own payer. All this makes more sense with your own insurance arm. This can be expensive and difficult to build. Health insurance is a significantly different business. The risks of getting it wrong are large. But it allows you to operate as a much more integrated business, and reap profit from your savings. Many of the most progressive health care organizations have done this, including Sharp, Sutter, Intermountain, Geisinger and Scripps. Some organizations, such as Nebraska Medical Center and Methodist Health System in Omaha, have joined together to build regional insurance companies.


You must take leadership. Others will carve out pieces that work for them (such as urgent care, specialty clinics and other limited money-making operations). They listen to station WII-FM (“What’s In It For Me”). In fact, a good rule of thumb is that any cost-cutting or regulatory constraints will be received as a matrix for schemes to make more money and build bigger empires. Expect this.

Hospitals and health systems, as the biggest game in town, must think, act and lead at the regional system level. If you don’t, you will be left with only what no one can make profitable. This is the reactive path of doing as little as possible.

Engage seriously with other regional players — other hospitals and health networks, payers, employers, local and state governments. When you can, form larger entities or affiliations to relocate some of the risk more broadly.

Engage the unions. Help them understand where you need to go and why. Engage everyone you might think of as an adversary, because you need them. Well-led people will pitch in (many of them) if there is a goal, if the path makes sense, if they understand that the need is dire.

The efficiency of trust is even more important in leadership. Be transparent. The new competitive environment has no room for corrupt relationships siphoning off resources for private use.

Management is a lived, human process. Speak plainly and seriously. Drop the biz-speak consultant-y jargon that Very Serious People use. Just say what’s real.

Some of you will succeed and transform your businesses. Many of you will not — and your businesses will be closed, or sold to some larger entity that can do it better, or to a hedge fund that will strip mine it. Or it will limp along on handouts, failing to provide excellent care to the thousands who depend on it. You have to choose. You have to believe that it is not impossible, and help others to see that it is not impossible.

Now is the time; where you are is the place. Engage.


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The Mind of the Building: Capital Planning in the Next Healthcare

September 24, 2013

Health care organizations are changing shape — and building. Think it through — or you will fetter your change.

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The Missing Ts: Four Key Dimensions of Strategy

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If you don’t have a structured way of driving your choices through the four Ts — transparency, targeting, trust and trim — you’re headed for T as in trouble.

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How to Fail at the Next Health Care

June 4, 2013

The Next Health Care calls for very different strategies and tool sets. Many systems are acting as if they read a manual on how to do it wrong. How many of these critical strategic and tactical mistakes is your system making?

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The Ghost of Steve Jobs and Your Bottom Line

March 19, 2013

The progeny of the iPhone and the iPad will change the shape of every healthcare institution — and their balance sheets — in ways that are hard to imagine.

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The Next Health Care — and the Dark Side

February 16, 2013

The very forces creating a better, cheaper and more available health care industry also can be used to create monopolies, raise costs and degrade care. Which future strategic model will prevail? Which works best? Which is right?

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Why Health Care Is Reshaping Itself

November 29, 2012

Costs and revenue: This is the oxygen of any business, any organization. What are your revenue streams? How much does it cost you to produce them? If you don’t get that in-out equation right, there is nothing else life can be about.

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