Neupert On Health

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Health Care Needs New Rules to Enable Innovation and Reward Experimentation

Health Care Needs New Rules to Enable Innovation and Reward Experimentation

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(cross-posted on Microsoft on the Issues)


Technology is playing a major role in helping bring healthcare into the 21st century.  Many of us have seen it first hand in treatment from our doctors, from MRI scans to laser surgery.  


But these clinical advancements represent only a small piece of what technology can do to transform health care.  The power of technology lies in the potential to transform the rest of the health care system, enabling new ways of working and communicating, new economics and new business models.  As consumers, we’ve experienced how technology impacts nearly every other area of our lives -- how we manage our financials, travel, communicate, shop and so on -- with more self-service, more control, more convenience and ultimately better value for what we spend.


Similar business innovation and consumer engagement has been slow to reach health care, where many physicians still opt for a pen-and-paper over a computer to maintain patient histories and chronicle treatments.  Patients continue to navigate frustrating and hard-to-understand medical and insurance organizations, physicians don’t always talk to one another about care and medical errors, waste and duplication drain the system of resources.


Today, we are finally seeing the first signs of systemic change in health care.  This change was clearly highlighted with the President’s recent visit to the Cleveland Clinic, which has leveraged technology to improve efficiency and health outcomes and give patients an active role in their health decisions.  But the Cleveland Clinic is just one example.  There are other health care institutions -- the Marshfield Clinic, Kaiser Permanente, the Mayo Clinic -- whose leaders have embraced technology to improve efficiency and quality while reducing costs.  And newer players are showcasing the possibilities brought by innovation, including virtual care from American Well and new delivery channels like Minute Clinic. 


But we haven’t yet seen widespread change.  The rules governing health care simply haven't allowed this to happen.  Congress created rules that have in fact stifled innovation (e.g. Medicare) by reinforcing volume over value -- reimbursing on a per-procedure basis rather than on the number of patients who remain healthy year over year.  Now Congress needs to look to the organizations that have used technology to create a new health care reality -- such as the Cleveland Clinic -- and develop a new framework that drives value, rewards experimentation and enables innovation.  Only then will we realize the policy goals of increasing access to health care while maintaining fiscal responsibility.


Reform efforts should focus on enabling the kind of transformation that Clay Christenson describes in his book "The Innovator's Prescription".  He describes how almost every other industry has been transformed -- complex, expensive products and services once only affordable to the wealthy have become accessible to the "masses" and provided by those with far less training.

As I described in my post this week on the Washington Post’s  Health Care Rx blog, real change requires:

  • Figuring out what works (and what doesn't)
  • Enabling supply-side innovation
  • Letting consumers do some of the work that expensive health-care professionals shouldn't be doing anymore

With our ailing economy and worsening health, it’s imperative Congress act quickly and tear down the barriers that exist to enabling innovation.


  • Excellent article Peter. Everyone knows of course that it is not simply the technology but the culture (and payment systems) that are fundamentally different at Kaiser, Mayo and the Cleveland clinic. Where else can you find someone like Dr Duffy who is the Chief Experience Officer at CC?

    Organizations like Mayo, Cleveland Clinic, et all, were able to provide higher quality care at lower costs long before they implemented new technology because of their number of reasons. 1) They are almost all large integrated care systems 2) at Mayo, Kaiser, Cleveland Clinic all of their providers are employees vs independent providers who are paid on a fee for service model 3) they are all fundamentally focused on their end user - the patient/customer/client.

    In other fields high performing organizations always have the data they need to make changes but it is often sorely lacking in health care. Starbucks knows more about the beans in your coffee then the labs a patient has had in the past year in the community.

    The early adoption of technology and the use of data allowed Mayo and Cleveland Clinic are tangible examples of their commitment to high quality patient centered care and we are starting to see some dramatic improvements in outcomes, quality, and patient safey as a result of the data that this technology provides.

    One challenge however, as pointed our recently by the WSJ, is how to replicate the Cleveland Clinic and Mayo models to situations where the providers work in small practices and are independent private practitioners. How do we move the "platform" from the provider to the consumer?

    This is one area where technology could in fact be trans-formative but you also need to marry that with finance reform so that you can capture the savings at the point of care (vs it going to the insurance companies).

    Too much of the conversation has focuses on who pays w (govt, employer, direct, co-ops)vs what we pay for. How we incentivize provider, payer and client (patient) behavior is critically important otherwise we are just giving people an electric pencil so they can do what hasn't worked in the past even fast. Technology is an important tool that allows us to transform the  "work flows" but not the only goal.

    Some studies show that 40% of medical costs in a doctors office are administrative over-head and a and a great deal of a providers time is spent doing things that Nurse Practionioers, Medical Assistants and even consumers could do. Some people suggest that up to 75% of our care could be provided by retail clinics or NP's and PA's and free up providers to focus on more complex cases..

    If our highly educated and highly trained providers could use technology to coordinate care and focus on those value added services (like complex care) that only they can provide we may not even have a shortage of primary care providers.

    So if we combine technology to streamline administrative overhead and clinical care combined with a focus on the 15% of the people with chronic conditions who account for the bulk of health care spending along with finance reform, (outcomes not procedures) we really could transform not only the cost of care but obtain outcomes that matter to patients, payers and providers.

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