Monday, December 8, 2014

Borrow From the Best

If imitation is, as they say, the sincerest form of flattery, health care should be doing a lot of sweet talking.

I was amused -- no, make that intrigued -- to see that the Defense Department recently released an RFI, asking both defense contractors and non-traditional vendors to help them dream up new defense technologies.  "I'm game for anyone," deputy assistant secretary Stephen Welby claimed at the press briefing.

Mind you, this is the Defense Department that already has DARPA, whose track record of technological innovation includes stealth planes, GPS, and -- in case anyone had forgotten -- the Internet.  But DOD still thinks they need help in developing "...novel or unconventional applications of technology in ways that would provide significant, enduring capability advantage..." to quote their RFI.

Health care needs more RFIs like that.

I was primed to react to the DOD RFI by an article in the Harvard Business Review: "Health Care Needs Less Innovation and More Imitation," by Anna Ross and Thomas Lee, M.D.   As they say:
Health care is infatuated with innovation.  We're awash in innovation conferences, organizations proclaiming innovation as a core value, newly minted Chief Innovation Officers, prizes for best innovation.  We think innovation is great, but there's a downside.  When organizations overemphasize innovation, they can miss out on the power of imitation -- copying existing approaches that actually work.  Providers need to actively seek out good ideas that have been tried and refined, bring those ideas home, and adapt them for local use.
They propose -- "our tongues only partially in cheek" -- an International Institute for Imitation, where Chief Imitation Officers could find good ideas to borrow.  They cite several examples of successful imitation, although the examples where health care organizations have borrowed ideas from other health care organizations are more convincing than the ones borrowing from outside health care.

I've written numerous posts over the past few months about how technology companies are becoming interested in health care -- e.g., AmazonFacebookGoogle -- but also expressed my concern that many of these outsiders are less interested in revamping health care than getting their share of the $3 trillion health spending.   If we're going to imitate, we need to make sure we're picking the right things.

One example of imitation is health organizations bringing in experts from retail industries, hoping to improve their patient/member experience.  Disney is often cited as one of the gold standards.  After all, Disney manages to take a hot, crowded, expensive experience and make people love it.  No wonder health care organizations think they can learn something.

The online version of customer experience that health organizations are now aspiring to imitate is Amazon.  Whenever I read about health care organizations wanting to create an "Amazon-like experience" (and President Obama helped get that particular ball rolling, bragging about before its disastrous initial roll-out last year), I think about why that is unlikely to happen.

Here's an example of the problem.  If my car was damaged I'd probably get a estimates from a few auto body shops, hopefully at least one of which my auto insurance will agree to pay in full.  I'd expect my car to get fixed on schedule and for the quoted price.  If it happened like it happens in health care, it's unlikely I could get an estimate in the first place, and when it came time to pay I'd probably get lots of bills -- from the auto body shop, from each of the mechanics, some for any diagnostics performed, and so on.  My health insurance might decide not to pay for some of these, claiming they weren't "necessary," or make me pay extra for anything it didn't consider part of its network.  What a mess.

When even auto repair looks consumer-friendly by comparison, you know health care is badly in need of reinvention.

The influx of different technologies and customer orientations certainly is welcome, but at best they paper over some of the underlying major problems, and I'll highlight a few:

  • Billing: Transparency is heralded as a way to help consumers make better choices.  There are no shortage of vendors in the space, and even some research suggesting it can help.   More transparency is needed, but the problem is that the underlying pricing structures make no sense.  They're based on wildly inflated charges that bear no relation to either actual costs nor the numerous negotiated rates.  Even worse, they grow ever more granular, whether based on CPT codes, DRGs, or other mechanisms.  There are thousands -- tens of thousands! -- of them, few of which carry any real meaning to consumers and which are rarely disclosed until long after the service is rendered.  Even if a provider's fees were made perfectly transparent, consumers still would be at a loss to understand them.  
  • Comparability: Let's pick on health plans, although I could do the same for providers' services.  It's not so hard to compare cost-sharing provisions like deductibles, copays, coinsurance, out-of-pocket limits, and premiums, and if you are relatively healthy that may be enough.  But if you have a chronic illness or suffer some major acute episode, things like how health plans define "medically necessary" or "experimental treatment," what's on their formulary, even which providers are in their provider network may be even more important.  It is hard to find and compare health plans on any of these prior to enrollment -- and health plans can change them with no warning during the plan year.  
  • Episodes of care: It's pretty rare that an encounter with the health system results in seeing only one provider, or only once.  A doctor's visit may led to the pharmacy or lab, an ER visit may include out-of-network physicians, and hospital stays end up with bills from a surprising number of providers, both during and after the stay.  Patients rarely know exactly what they are "buying" or from whom they are buying it, much less what it will all cost.     
We have armies of billing experts on the providers' side trying to maximize their revenues, countered by armies of claim examiners on the health plan side trying to combat those efforts, while experts on both sides fight over contractual language like Talmudic scholars.  None of this helps the consumer -- the patient/member -- and very little of it is understandable to them.

Yes, I know smart people on both sides are working on approaches like bundled payments and value-based purchasing, but I fear that even these may end up so technical that only those experts can understand them.

Health care is very complex; I get that.  But so are lots of things, such as computers or cars, and buying them is much easier than buying health care.  We shouldn't accept that this has to be the case. I think the winners in the health care wars will not necessarily be the ones with the coolest technology or the friendliest customer experience, but those who have the easiest-to-understand products and pricing.

If we want to borrow from other industries, technology is nice but simplicity would be better.

1 comment:


    The infographic in this referenced article looks at some goals for the U.S. health care system and how they might be achieved by adopting practices used by other industries. It makes me think of my early days at IBM, where I compared tech innovation in the Computer industry with that of the Airlines industry.

    “If the airline industry evolved with the same speed as the computer industry, we could fly half way around the world in an hour for fifty cents worth of gasoline in an airplane too small to sit in and when we arrived at our destination it would be cheaper to throw the plane away than to have it serviced and parked overnight.”

    Maybe the healthcare system needs sarcasm to make the point. In which case, watch this 7min video on YouTube ( It shows that “If Air Travel Worked Like Health Care,” we’d be in for a bumpy ride.