Volume based care to Value based healthcare
Mergers and Acquisitions are certainly a way of increasing volume of healthcare. The challenges lie in coordination for patient centricity. Especially for culture and processes.
The Mayo Clinic Care Network was built through affiliation and not M& A. Affiliation was based on patient centricity. Affiliates were local care providers. They collaborated, consulted and referred with Mayo Clinic to get the best of both worlds.
Source: An Alternative to Health Care M& A, David Hayes, HBR, December, 2014.
Patient experience - A Strategic Priority at Cleveland Clinic
Cleveland Clinic had a long standing reputation of medical excellence at reasonable cost. By 2008, patient dissatisfaction was high enough. CEO, Delos Cosgrove made patient experience a strategic priority.
Along with James Merlino, a colorectal surgeon, they lead a transformation effort at The Clinic.
By about 2013, satisfaction scores had moved from average into the top 8 percentile amongst a 4600 hospital survey by CMS in the U.S.
Source: Health Care's Service Fanatics, Ananth Raman, HBR, May, 2013
Too little too late
Maggi was recalled by the UP government on April 30, 2015. Nestle addressed the media in June 2015. In contrast Toyota President, Akio Toyoda addressed the media within a day of the arrest of a senior company executive found in possession of a controlled substance.
Was it good enough? Prof Kimberly of Wharton suggests a five point crisis management strategy:
• Acknowledge that there is an issue that needs to be examined carefully.
• Buy time to get the facts.
• Do not deny involvement/responsibility
• Do not attempt to estimate the magnitude of the problem
• Commit to a speedy and thorough investigation
Source: Why the Maggi Noodle recall has landed Nestle in Hot Water, Knowledge@ Wharton, June 2015
Top six fields most likely to show strong revenue and employment growth for the next 5 years
Research firm IbisWorld studied 700 industries to come up with this list useful to fresh grads for employment:
• Engineering Services
• Management Consulting
• Semiconductors and circuits
• Software Development
Source: These Businesses will be booming until 2020 and beyond, Fortune, April 2015.
‘‘More than 69% of healthcare costs arise out of patient behaviour’ - Foundation for Managed Care Pharmacy
Non- adherence to therapy is a critical reason for healthcare delivery ineffectiveness. It costs 289 billion USD in the US alone.
The new model is patient centric rather than disease centric. The basic focus is to influence patient behaviour and choices through use of technological tools and connected ecosystems.
Remodelling can impact health care outcomes more than creation of new drugs and medicines.
Source: Medication Adherence in the Real World, Cognizant 20-20 Insights, October, 2014
Strategy- When it is Hazy
Complex problems involve everchanging, non-linear environments with multiple independent variables at play. They need emergent strategies.
Emergent strategies evolve over time. Three principles are critical:
1. Continuous learning for innovation
2. Attention to Context
3. Focus on relationships and interdependencies.
Source: Operating when you can’t see the full picture, Stanford Social Innovation Review, June 2015.
Learnings from the National Health Service (NHS) Scotland
National budget limitations are forcing nations to rebook at better ways to manage the health of citizens.
The direct impact of healthcare is only 20% to a nation. The balance 80% is about behavioural, social and environmental issues. Healthcare organizations need to partner with educational institutions, social and community institutions to achieve this.
Source: Constraints on Health Care Budgets Can Drive Quality, Derek Feely, HBR, December 2013.
Loopholes in Toshiba’s Accounting Scandal
Investigators found the following anomalies in Toshiba’s accounting scandal
• Overstating Profits
• Booking Profits Early
• Pushing back losses
• Recording of charges
It led to USD 1.2 billion of profits being inflated between 2008 and 2014.
Source: A load of Tosh, Economist, July 2015.
Ethical pragmatism vs ideological rigidity
Adam Werbach was a noted environmentalist right from his teens and President of the Sierra Club a leading environmental organisation in the U.S. He viewed Walmart as a toxic influence. Yet in 2006, amid controversy on ideological hypocrisy, Werbach through Saatchi and Saatchi partnered with Walmart to build the Personal Sustainability Initiative to influence it's 1.3 million staff. His leadership helped 40% of them get committed to the green cause.
Happiness rather than sacrifice was made central rather to green actions.
Effective leaders are ethically pragmatic to gain impact.
Compensation can lead to Conflict of Interest
Purchase of medical supplies in the USA is done by Group Purchasing Organizations (GPO) to consolidate purchasing power of hospitals aimed at better prices. GPOs are paid based on a % of the purchase value! Are these leading to better prices?
A ten year study by Kauffman Foundation reported in 2010 reveals that reward structure motivates them to maximise the purchase, not minimise the cost. The study estimated that overall US healthcare expenditure could reduce by USD 54.75 billion.
Source: Broken Compensation structures and Healthcare costs, Litan and Singer, HBR, October 2010.