Ten existential questions will make the
difference between limping into the future and soaring to new heights.
The questions have changed. The key strategy
questions that the C-suite must be asking — and getting actionable answers to —
are different now than they were in the past, even from what they were last
year. Most of today's health care CEOs and C-suite leaders are missing many of
the key questions they need to ask to drive strategy now, this year, this
budget, in order to survive the next three to seven years. Which ones are you
missing?
A New Mindset
Today and for the next few years the weather
of this industry will be dominated by pervasive, discontinuous change.
Structures, revenue streams, relationships of every level — all are shifting in
fundamental ways. Specifically, the weather will be driven by:
§ invention and propagation of new business models;
§ shifting risk onto both the provider and the patient, accompanied by
building of new risk-based relationships, contracts and alliances;
§ smart primary care coming to the fore as the foundation of health care,
driving most business models;
§ digitization and automation going wall to wall and beyond the walls —
accompanied by powerful new info-capacities, from "big data"
strategic analysis to new ways of reaching and bonding with customers; and
§ a striking new need for efficiency and effectiveness in response to
rapidly rising demand as the baby boomers age, the baby boom health care
workforce ages and disengages, and the newly insured increase their use of
health care facilities.
§ Most of these factors, except the very last, are not dependent on the
health care reform act, and will not change much if the act is altered or set
aside.
Here are 10 strategic questions. There are
lots of questions you can ask at the strategic level, but these 10 stand out as
existential questions, the ones that, unasked or poorly answered, could cripple
your organization, narrow your options and threaten your continued viability.
So we will call them the X questions — X for the Roman numeral 10, for the
existential nature of the answers, and for the key X-factor role they will play
in your future. If you are not asking these questions — seriously, not
rhetorically — in a venue that searches for answers that result in actions, you
and your organization are flying blindly into unknown territory.
The
X Questions
1. Smart primary care: What would it
take to derive the majority of your income and profit from primary care in
three to five years? What would that look like? What capacity would you have to
buy or build or ally with to do that? What structure would make primary care a
profit center instead of just a source of patient flow for the real profit
centers? Do you recognize the elements that make a primary care practice smart,
Lean, effective and a true medical home?
2. Risk: Are there definable
populations in your market whose health costs could be driven down by improving
their health status? While there are thousands of examples, focus on just this
one: In the last 10 years, through basic, conservative preventive measures,
Kaiser drove down the incidence of heart attacks in its members by 24 percent;
it reduced serious heart attacks requiring hospitalization or surgery by 68
percent. Those are big numbers. Kaiser is financially at risk for the care of
its members. You can probably imagine how the return on investment for
preventing all that suffering and death looked on Kaiser's bottom line.
Populations could be defined by payer (all the
Blues members in your area, for instance, or all the members of your own health
plan). Or by disease process (all the diabetics), by living situation
(everybody in a particular retirement home), by income level (all the
lower-income people in a particular part of town), by life stage (all the
mothers of young children) or even by occupation (all those dock workers with
bad backs). How could you put your organization at risk — therefore at profit —
for those populations? Who might pay you to care for them? In what way might
they pay?
3. Hotspotting: Eighty percent of your
utilization and costs, typically, come from 20 percent of your patients; half
of the utilization and costs come from 5 percent of your patients; and fully 20
percent to 30 percent come from the top 1 percent. Some of those patients just
got hit by a bus or contracted a swift-moving cancer. This is their moment to
need a lot of attention. But, of that highest-spending 1 percent this year, 14
percent still will be in that category next year. Of the top 5 percent, the
ones who use half of all the resources, nearly a third still will be in that
category next year. Of the top 20 percent, those who use 80 percent of all the
resources, more than half will be in that category the next year.
Typically, these are the long-term chronic
patients who are not getting the real care and attention they need to stabilize
their condition and keep them out of the emergency department or the hospital.
If you are going to be at risk for some population, do you know whom that top 1
percent or top 5 percent of resource spenders are? Do you know how to find out?
Do you have a clear idea how you could lower their costs by serving them
better?
4. Alliances, customers, partners: Who
is going to work with you? Who will share the risk and the benefit of these new
risk environments? Are there competitors — such as physician groups, specialty
clinics, urgent care clinics or retail clinic chains — that are now potential
allies? Are there employers in your area with whom you can work directly,
either to be at risk for some aspect of their employees' care (behavioral
health, for instance, or spine care, or all primary care in a workspace
clinic)?
5. Teams: What sort of clinical teams
will you need to build to take on this kind of risk? What will make those
clinical groups into teams, and not mere collections of clinicians with their
own agendas? How can the way you pay those clinicians tie them directly into
the organization's goals for each group of patients? How will the business
structure, patient flow and workflow have to change from what you have now?
6. Definition: How will the definition
of "care" expand beyond your traditional inpatient and outpatient
"sick care" concerns when you take on such risk? For instance, how
can you affect outcomes and costs by putting behavioral health professionals
into the care flow early and often? Consider this: The two top predictors of an
individual's health care costs are not physical. They are not body mass index,
blood pressure or blood sugar level. They are stress and depression. Are you
going to put yourself at risk for those health care costs without trying to do
anything about those factors?
7. Setting: Where will such care have
to be delivered? Through what kinds of channels, and in what kind of
environments? If your survival depends on managing the health risk and costs of
populations, how do you bring the care to them? How do you snuggle up to your
customer? What technologies could put your relationship with your customer in
her purse, on her desk, in her house?
How will your physical plant and built
environment have to change? As you contemplate building, renovating and
repurposing in a new risk-based environment, you will have to focus not only on
getting closer to your customers, but also on building a safer, more efficient
and effective environment in which your clinicians can work with them. How
conversant are you and your executive team with the principles of
evidence-based design championed by the Center for Health Design and
encapsulated in its certification program? Are your architect and interior
designer certified?
8. Benchmarking: Are there
organizations of your size and level of complexity, in markets like yours that
you could benchmark? How could you identify them? How could you best work with
them?
9. Digitizing: Everyone is gettin'
digital at once, but there is no mantra that makes it all work. It can be done
seriously badly, even when working with market-leading companies. You can
cripple your organization's workflows, cut efficiencies and make your
clinicians hate you — all while writing checks as much as 10 times the amount
necessary.
How much do you and your executive team
actually know about the changing horizon of information capacities? How
seriously have you studied it? Does that knowledge simply pad out your strategy
or does it drive it? How satisfied are you that the strategy and the company
you are choosing to lead your digitization drive are the best for you? Or are
you and your CIO simply buying the security of the imprimatur of a major
company? How aware are you of the new technological capacities arising and
being showcased in the Health 2.0 environment, in the open source movement or,
in primary care, the Ideal Medical Practice movement?
In your enterprisewide digitization, are you
using OpenVista and the Resource and Patient Management System (RPMS), the
open-source software suites available for free from the Veteran's
Administration, one of the oldest, most tested and largest digital
implementations in health care? If not, how good are your reasons?
Consider this: A couple of years ago, West
Virginia University Hospitals spent about $90 million to install commercial
health software from a major brand-name vendor in seven hospitals. About the
same time, the West Virginia Health and Human Resources Department installed
OpenVista in eight hospitals. The installation and customization by a private
vendor in all eight hospitals cost $9 million. Are we to assume that the
university system got 10 times the value? Why would we assume that?
In taking your smart primary care practices
and other physician practices electronic, have you considered the free or cheap
software-as-subscription packages such as Practice Fusion or Doctations? How
strong are your reasons for spending money you don't have on systems that cost
far more?
Kaiser recently rebuilt its entire electronic
system (and by all reports quite successfully), to the tune of $4 billion. Top
managers involved 160 physicians from all parts of the system in the re-design,
not just once, but repeatedly, as a task force. This really helped not only in
building a good system that actually works for the clinicians, but in getting
the doctors to really use it to advantage once it was implemented. How much
have you involved your doctors in designing your system? Or is it just,
"Oh, we have a doc on the committee"?
Ask yourself some functional questions from a
doctor's point of view, such as: Are the accounts and records transaction-based
or patient-based? When an ED patient is admitted, does that become a new
record? Or is all the clinical information on that patient brought forward as
part of a continuing, longitudinal patient record? Can it display, for
instance, variations in blood albumin level over time as a single graph? Or
does the clinician have to burrow through dozens of transactional records to
write down the data and then visualize it in her head? Can the system accept
data from other hospital systems, or from legacy data sources within your own
system? If not, why not, when translational software is available?
If you don't know the answers to these
questions to a close approximation of on-the-ground clinical reality, you need
to find them. They could be killing you.
10. Healthy communities: If you are at
risk for the health of a population, what could you be doing to help members of
that population be healthier? The least expensive way to deal with disease is to
prevent it. Many prevention methods range far beyond the medical environment.
They have involved everything from a bicycle helmet campaign to better day care
centers to traffic lights, community gardens, yoga classes and healthy-cooking
clubs. Do you know what the key leverage points are in the community for which
you are at risk? Have you asked them? Have you done the community health risk
assessment mandated in the reform law?
The amount of actual funding involved in
partnering to build a healthier community can be so low that one CFO described
it to me as "lost in the noise" of the budget. In a risk environment,
the return on investment can be very high. The experience, the data, the
expertise in improving the health of populations is now deep, wide and
accessible. These resources include the risk-assessment toolkit from the AHA's
Healthy Communities Fellows and its Association for Community Health
Improvement, and the comprehensive turnkey software and databases available
from the Healthy Communities Institute of Berkeley, Calif.
Confronting Your Risk
In the environment that is developing right
now, with the shift in underlying economics, demographics, technologies and
business assumptions, every organization in health care is at risk of slowing
its development, crippling itself or even falling by the wayside. At the same
time, tremendous new opportunities are opening up, often in directions we have
never even thought about.
This is the time to ask and answer the
fundamental strategic and tactical questions, the X questions.
Joe Flower
AHA
Joe Flower is a health care futurist and CEO of The Change Project, Inc.,
and its health care education arm, Imagine What If. He is also a regular contributor
to H&HN Daily and a member of Speakers Express. His new book,Healthcare
Beyond Reform: Doing It Right for Half the Cost, will be published in March
2012 by Taylor and Francis.
The opinions expressed by authors do not necessarily reflect the policy of
Health Forum Inc. or the American Hospital Association.
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