Health Care Management

There are a variety of innovative strategies in health care that are struggling to survive with this well bounded system.

The health care public policy debate seems to be trumping the need for strategies on the operating levels of the health care system. The New York Times (Sunday, September 23, 2007) points out that the Republican candidates have not grappled with the health care issues, relying on tax deductions to increase insurance coverage and not much else. Voters who put a higher priority on reshaping the health care system along free market lines than on achieving universal coverage will prefer the Republican plans. The Democratic candidates would move toward universal coverage and would use mandates to do so. Voters who put a high priority on covering all or most of the uninsured will prefer the Democrats’ approach.

The Times points out that both parties are missing the policies that restrain costs and add to more effective treatment. Standard solutions, such as electronic medical records, restraining malpractice expenses, and competition among health plans are as readily discussed within the industry and many are in play. But the Times is asking for more. It is asking for efforts that challenge the existing system in favor of more drastic reforms.

"No top candidate is either party has broached more drastic remedies, like limiting the use of expensive new technologies, cutting reimbursements to doctors and hospitals, or forcing people to use health maintenance organizations. And no one has suggested imposing higher taxes on everyone, not just the wealthy, to finance universal coverage. These solutions are not even discussed on the campaign trail lest they alienate voters and interest groups."

These disruptive innovations are very controversial and would be difficult to institute through public policy reform. Yet, they are issues that have to be resolved on the public policy level. Other innovations might be tested in some way through the strategies of individual organizations. This is not an easy endeavor but would be worth while to undertake.

HSAs, retail clinics, physician owned hospitals, Web MD, patient-maintained medical records, spiritual healing programs, focused health care centers, application of manufacturing principles to health care management are disruptive technologies that could work to reform health care. Many are already making strong headway within the system. However, the health care system is dynamically conservative and will fight these innovations bitterly if they are truly disruptive. Change on the margins may be welcomed but radical change will not be. It is the entrepreneurial leaders of these movements that are going to make the true difference in health care reform, not political candidates or executives within leading health care institutions.

Posted by Jack Militello at 04:37 PM | Permalink | Comments (0)

At yesterday's meeting of The Colloborative in Minneapolis, the panel introduced a set of disruptive technologies that might be very helpful in improving America's health care sysrtem. The technologies represented by the panel were not new and included: joint insurer/provider systems; HSAs; venture funds to support new ideas in health care management; and the commerical health care clinic.

What made the panel most interesting for me were the assumptions that are behind these technologies:

1. Heatlh care is a business and the business aspects of health care are as noble in intent as the service aspects.
2. The health care system is constrained by the federal funding policies that are directed by Medicare. This is our money. As a free-market democracy we vote authority to our legistiators to management our money in a way that supports the common good. If we are unhappy with how that is going, we can insititute change through the electorial process. The country had done so in 1968 over foreign policy and in 1980 over domestic policy. Also, we may be doing it again in 2008 over foreign and domestic policies.
3. We need to manage health care for the common good and, while being supportive of groups at the margins of society, we should not ignore or mis-define the common good.
4. Disruptive technologies may be necessary to focus the health care system more directly on the common good.
5. Clear information must be provided to consumers of care and they should be trusted in their interpretation of that information so we can better evaluate disruptive technologies.

Jack

Posted by Jack Militello at 09:14 AM | Permalink | Comments (0)

I would like to open a general discussion about allowing choice within a seemingly constrained health care system. Without choice, there are no markets. Without markets, there are no strategies. Without strategies, there is no gain.

The health insurance industry can be expected to become more retail oriented. A March 2007 McKinsey Quarterly article by Tom Latkovic and Shubham Singhal states that individuals currently bear 25% of the cost of the $1.9 trillion a year spent on health care. The more than 6 million people who have moved to consmer-directed health plans, such as high-deductable policies associated with HSAs, have attracted atteention. Many other consumers make decisions about health care purchased. The authors list:

19 million people with individual insurance,
Employees who can choose among productes from a number of carriers through their employers,
Spouses who have options from different employers,
Retired people with Medicare options,
the 46 million uninsured who purchase health care with their own money.
The authors continue in pointing out that 40 to 45 percent of people in the United States already choose their primary health insurance form a variety of possible carriers.

Jack

Posted by Jack Militello at 10:49 AM | Permalink | Comments (1)

Introduction to Week 1
Introduction to Week 2
Introduction to Week 3
Introduction to Week 4

To view video, type "guest" for both User Name and Password.

Posted by Jim Rafferty at 02:42 PM | Permalink | Comments (0)

As Porter and Teisberg tell us in Redefining Health Care, Health reform has become a significant item on the national agenda. The 2008 Presidential election debates will continue to focus on health care reform as a key public initiative. In recent years health care reform has centered on systems costs, which have been shifting among patients, providers, physicians, employers, and government. Attention to cost has created limits in access to health care. Limited services introduce the legal system as one of the few channels of recourse available to patients. The increased reliance on the legal system is leading to more detailed sets of rules that govern the behavior of system participants.

The focus on costs is now being paired with a focus on quality. Management processes such as online order entry, Six Sigma practices, lean manufacturing practices, pay-for-performance, and mandatory guidelines are becoming prevalent in most health care organizations. In addition, competition has entered the system characterized by distinctive strategies by payers and providers; proliferation of media advertising for products and services; incentives to increase value to the system’s stakeholders; providing information to patients on providers’ experiences, outcomes, and prices; entrance of a variety of new players into the health cares system; and more significant choices given to consumers of health care.

Value-based strategies are becoming a large part of health care marketing. Treacy and Wiersema in The Disciipline of Market Leaders, offer three generic types of value: Operational Excellence, Product Leadership, and Customer Intimacy.

Operationally Excellent companies deliver a combination of quality, price, and ease of purchase that no one else in their market can match. They are not product or service innovators, nor do they cultivate on-to-one relationships with their customers. They execute extraordinarily well and the proposition to customers is guaranteed low price and/or hassle-free service. Pg.33

A company pursuing product leadership continually pushes its products into the realm of the unknown, the untried, or the highly desirable. Its practitioners concentrate on offering customers products or services that expand existing performance boundaries. A product leader’s proposition to customers is best product, period. Pg. 37

A company that delivers value via customer intimacy builds bonds with customers like those between good neighbors. Customer-intimate companies do not deliver what the market wants but what a specific customer wants. The customer-intimate company makes a business of knowing the people it sells to and the products and services they need. It continually tailors its products and services and does so at reasonable prices. It proposition is: “We take care of you and all your needs,” or “We get you the best total solution.” The customer-intimate company’s greatest asset is, not surprisingly, its customer loyalty. Pg. 40

Value for them is based on results. Customers seek best cost, best product or best service. Rarely do they want or need all three.

The following three mission statements give us a sense of the array of values offered by health care providers:

Health Partners:

Our mission is to improve the health of our members, our patients, and the community.

Our vision is that we will be the best and most trusted provider of health care, health promotion, heath care financing and health care administration in the country.

Mayo Clinic:

Mayo Clinic is based on the idea of “cooperative medicine”; teams of experts combine their skills and experience to help solve people’s medical problems. In simple terms, Mayo believes that two heads are better than one, and five are even better.

Harvard Vanguard Medical Associates

At Harvard Vanguard, everything we do has just one focus – you. Our approach is about giving you the information, the resources and the power to make choices that put you in control of your health. And our doctors treat you as a whole person, collaborating across specialties so that each health care decision optimizes your overall health. At Harvard Vanguard, you’ll find health care designed around your individual needs that respects and empowers you.

Health care providers are begining to understrand the a differentiated value proposition is essential to their securing a strategy hold on some segment of the patient market.

Posted by Jack Militello at 01:07 PM | Permalink | Comments (1)