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Leadership

Health Care Can Learn from Other Business Models

 

The U.S. health care market, $3.2 trillion in 2015 (17.8% of GDP), is so complex and encumbered by multitudes of regulations, standards, payers, providers, and programs that it begs the question, can it learn something from other markets and businesses? Conventional wisdom on the part of health care leaders is that it likely would not.  People may be exhausted with the failure of the health care debate to move forward.  The frustration may be accompanied with the hope that health care’s 100-year-old business model will soon be positively disrupted by some emerging technology.  This denotes the failure of consensus building by our elected officials and leaders of our health care institutions.  Is it worth re-trying the dialogue, perhaps under different conditions?  Following are some thoughts built on the reopening the health care policy discussion.

  1. Domain development – The Twin Cities is renowned for the development of domains, i.e. organizational initiatives, which assist its citizens, corporations, and government to facilitate decision making across a spectrum of interests not readily addressed by traditional groups. The Citizens League, the Keystone Club, and the Downtown Council are examples of domains that influence decision-making that affects our local community by providing insight and perspective.  Is it possible to have a health care council that focuses on our local and regional needs, and common good?  Would such a council bring perspective to the needs of patients of all types and resources relative to the range of services available?  This council would not be a policy making body.  Rather it would provide a non-partisan, non-political format to provide thought leadership on health care issues.
  2. Participation – We have a number of programs that require participation such as drivers licensing, social security, property taxes, etc. Why is participation in the funding of health care (the mandate) considered such an intrusion by the government? How can a market function if its customers can elect not to participate until they need services and their expectation is that the cost will be as if they contributed all along? What is the role of government as a primary insurer of those most vulnerable to health care access problems? Minnesota’s health care insured market is in sharp decline, dropping from 293,000 enrolled in 2014 to 190,000 enrolled in 2017.  Are there any new models that address the participation issue?
  3. Market Focus – Is it possible to be successful in health care without serving an entire market? Conversely, is it possible to be successful if one provider can selectively choose its patients while another is required to care for all? Does it make sense to take a broader view of the range of patients across our community and the array of service providers, with a goal of aligning patient segments in the most cost-effective manner? Is there a community benefit to the intense competition for commercially-insured patients among our providers or does this result in needless and redundant investments at a high cost to patients? This is not a proposal to regulate the market, but rather one to level the playing field for providers and to create a true market.
  4. Create shared centers of excellence Can we find mechanisms to encourage the creation of specialty health care services that support all providers, improve access, and reduce or eliminate unneeded investment, without corrupting the marketplace? Can markets be created among health care service providers that optimize the sub-systems of health care, such as emergency care, coding, pharmacy, etc.
  5. Catalyze market strategy – Current health care strategy in our community appears to be singularly focused on the acquisition of patients, generating volume to offset the fixed costs of delivering health care; it is an evolving form of cannibalization that pits providers against each other without necessarily providing better access or more cost efficient operations. Are there strategic options appropriate to a competitive environment that make better use of resources and talent?

Health care management is continually seeking innovative solutions to care delivery processes.  The past few years have seen innovation focused on data technology.  We are proposing to insert the innovation process into the health care management system where systems’ constraints are addressed openly in light of possible trade-off and solutions.

 

Jack Militello and John McCall
St. Thomas Center for Innovation in the Business of Health Care

Leadership, Operations Improvement

What the Science of Motivation Can Teach You about High Performance

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Daniel Pink

By Cindy Lorah

The opening keynote address of the American Medical Group Association (AMGA) meeting in Orlando, March 15, featured Daniel Pink, author of A Whole New Mind and Drive, who shared his insight on the science of motivation and some of its implications for health care.

First, he looks at our “intrinsic” knowledge of motivation – what people generally believe and act on regularly. Namely, that rewarding a behavior gives you more of it and punishment for a behavior gives you less.  Social scientists have basically been testing this “hypothesis” for years, and the result is that “sometimes” this holds true, but not nearly as often as we generally think…and this can lead to big mistakes.

This type of “IF – THEN” motivation (IF this action happens, THEN you will get this reward/punishment) has been shown to be great for simple and short-term tasks. However, it is not great for complex, long-term situations. One key study showed that as long as a task involves only mechanical skills, bonuses work as expected. However, once the task calls for “even rudimentary cognitive skills,” a larger reward led to poorer performance. Although this may seem wrong on a profound level, it is not surprising to social scientists. People love rewards and tend to focus intently on achieving them. However, if people need to think creatively and multi-dimensionally, you do not want to motivate single-minded focus.

An example pertaining to health care are studies looking at pay-for-performance initiatives. One study showed there “is not evidence that financial incentives can improve patient outcomes,” and a second showed that there is no evidence that pay-for-performance in hospitals led to a decrease in 30 day mortality.

To be clear, it is a fact that money is a motivator. It matters a lot, but its effects are nuanced. People are exquisitely tuned to norms of fairness. People need to be paid enough to “take money off the table” and to be perceived as being paid fairly.

Assuming “fair” compensation exists, there are 3 motivators for enduring performance:  Autonomy, Mastery, and Purpose.  Continue Reading

Leadership

The Value Imperative: The Impact of Value-Based Care on Medical Products Marketing

By Cindy Lorah

Recently, the Health Care UST MBA at the University of St. Thomas convened a discussion on the changing landscape of purchasing decisions as care delivery systems evolve to value-based, population models such as ACO’s. This event was part of the MN Chapter of the American Marketing Association’s Health Care Special Interest Group series. The panel included:

  • LeAnn R. Born, vice president – supply chain, Fairview Health Services
  • Pat Courneya, M.D., health plan medical director, HealthPartners
  • Steve Swanson, M.D., president, John Nasseff Neuroscience Institute, Allina Health
  • Moderated by Mark Morse, principal, MORSEKODE agency.

The program provided a valuable perspective for medical products organizations struggling to understand the new reality and its implications for their market and development strategies.  The conversation broadly addressed three questions:

  1. What are the characteristics of the new reality?
  2. Who will be the key influencers in purchasing decisions?
  3. How can suppliers effectively demonstrate value and thrive in the new decision-making environment?

Continue Reading

Financing, Health Policy, Leadership, Operations Improvement

Improved Economic and Employee Health is Goal of Blue Zones Strategies

37740635By Stephanie Hegland, MBA

In this age of health care reform, corporations are looking to innovative care delivery models – such as accountable care organizations and patient-centered medical homes — to bend the proverbial cost curve by improving the health and well-being of their employees. Recently, Kare 11 News profiled a different approach to improving employee health by implementing Blue Zones principles.

Salo, Oberon and NumberWorks – three affiliated Minneapolis contract staffing companies – became the first organizations to seek a Blue Zones Certified designation. “Workplaces with greater well-being have fewer health care costs and are among the best places to work,” said Dan Buettner, founder of Blue Zones, when he introduced the six-month initiative last September. The Blue Zones Certified Workplace designation is his effort to systematically create an environment of health by focusing on four optimal behaviors: move naturally, have the right outlook, eat wisely, and connect with family and friends.

Collectively, Blue Zones principles represent what Buettner has discovered during his global research to identify communities where more people reach the age of 100 than anywhere else, communities which he termed Blue Zones. Continue Reading

Health Policy, Leadership

Checking the vitals of health reform

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“But in Washington, political polarization now stands in the way of what must be the next leg of the health care journey: making improved health and reduced health spending part of our nation’s fiscal strategy.

I am not talking about balancing federal budgets by shifting costs to consumers, providers or the private sector.

I am talking about real reform.”

What does “real reform” look like? Dave Durenberger explains in an opinion piece published at Politico.com.

Financing, Health Policy, Leadership, Operations Improvement

Optum’s strategy for ACO development

docsMinnesota is proud to be the home town of UnitedHealth Group (UHG), the largest health insurance and health services company in the United States. UHG provides services to over 97 million Americans.

On January 31, 2013, Chris Pricco, senior vice president of accountable care solutions at Optum, presented the UHG perspective on accountable care organization (ACO) development over the next 5 years. This event was co-sponsored by the Minnesota Chapter of the American College of Healthcare Executives.

If you were to attend one event that would encapsulate the future of the American health care system – this was the event. Here are some key points from Mr. Pricco’s presentation.

The most important trends in health care delivery today:

  • Providers are under market share, profitability and consolidations pressures
  • Cost shifting is rising to unsustainable levels
  • CMS is radically revising its payment methodologies
  • Commercial providers are implementing aggressive pay for performance systems
  • Providers are beginning to take and manage risk

As providers move into the ACO and quality payment environment, several key strategies must be effectively executed:

  • Redesign the organization’s care delivery model to be attractive to the market
  • Develop methods to manage risk
  • Optimize contracts with payers and providers in the system
  • Effectively integrate all providers into the system
  • Measure and improved consumer engagement
  • Increase effective branding and marketing at the retail level

The need to move from a fee-for-service environment to a value-based payment system is challenging for most delivery systems. However, Optum’s experience is that this shift is happening to all systems today.  Continue Reading

Health Policy, Leadership

Healthy Minnesota: Communities in Action

By Laura Templin-Howk

In March of this year, the Health Care UST MBA cohort 18 experienced an opportunity of a lifetime. We were in Washington, D.C., as the opening arguments for the legality of the Affordable Care Act (ACA) were presented to the United States Supreme Court. Whether we agreed or disagreed with the content, the ACA was the most significant health care legislation to leave a president’s desk since the passing of Medicare in 1965. Through the influences of Senator Dave Durenberger, we were introduced to more than 25 political players who were all candid about their ACA opinions and their predictions of the Supreme Court ruling.

Fellow student Tina Morey and I left Washington, D.C., with a revived sense of hope that a paradigm shift in health care is on the horizon. Title IV of the ACA, “Prevention of Chronic Disease and Improvement of Public Health,” was the first legislation to place financial support for proactive, preventative measures. Title IV Subsection D, “Creating Healthier Communities,” provides an outline to encourage the funding of local projects that are created with the intent of population-based prevention programs through Community Transformation Plans. The beauty of this section is to encourage bottom-up, localized creativity in addressing community health concerns. Healthier schools, healthier food options, physical activity opportunities, promotion of healthy lifestyles, emotional wellness, prevention curricula, activities to prevent chronic diseases, infrastructure creation, racial and ethnic disparities reduction are all possible components of Community Transformation Plans.

We did not have to look farther than our backyards to see active examples of healthy community initiatives; in my case, the golden nugget was in my hometown of New Ulm, MN. Continue Reading

Health Policy, Leadership

Tomorrow’s Health Care Workforce Needs

By Stephanie Hegland

There is a great deal of discussion regarding the issues that exist in health care, and even more speculation around how the upcoming election will impact the full implementation of health care reform. However, there does not appear to be clear direction or definition around the type of work force needed to lead the transformation.

A recent presentation [i] about Minnesota’s health care workforce presented the following facts:

  • health care sector accounts for 13% of all employment in the state
  • health care and social assistance sector represents nearly 1 in 5 job openings in Minnesota
  • health care jobs continued to grow during the recent recession, while total employment fell
  • health care sector is, and will continue to be, the leading area for job creation through 2020.

And last week’s press release [ii] by the Minnesota Department of Employment and Economic Development, stating job vacancies are up 15.1% in Q2 2012 compared to Q2 2011, confirmed that the health care and social assistance sector accounted for the largest number of job vacancies (16.5%) in the state.

There is familiarity with the drivers that are demanding more health care workers: Technology (IT, EHRs), Medicine and Care (telemedicine, virtual care, Triple Aim), People and Wellbeing (aging population, retirement, consumer empowerment), Economics and Finance (cost of care, reimbursement models), and Policy and Regulations (health care reform, quality measures, ACOs).

However, there seems to be less knowledge of the needed roles and required competencies. Continue Reading

Financing, Health Policy, Leadership, Operations Improvement

The Health Care Execution Challenge

This article was originally published in the spring 2012 issue of B. Magazine.

Health care organizations lag behind most successful businesses in executing high-quality business plans

In 2001, the Institute of Medicine published Crossing the Quality Chasm, a seminal work identifying the chasm between what is known about providing high-quality health care and what actually is being delivered. Ten years later, this chasm still exists and was a key factor leading to the publication of Make It Happen: Effective Execution in Healthcare Leadership, a book published by Health Administration Press, a division of the Foundation of the American College of Healthcare Executives.

As director of the Center for Health and Medical Affairs at the Opus College of Business, I long have been engaged in the health care delivery system throughout the Midwest and the nation. The focus of the center is to “support improvements in the leadership and management of health care systems through research, community outreach and the collaborative development of innovative professional and executive education programs.” Conducting research for and writing this book not only furthered the goals of the center but can, as a member of HAP’s editorial board notes, “advance health care leaders from developing a plan and letting it sit on the shelf to full and robust execution.”

The Challenge

The failure to execute is a common problem in many organizations but more so in health care. Barriers include an incredibly complex system, splintered leadership, strategies that vacillate between financial goals and patient care, and no external pressure strong enough to force change.

Effective execution, however, is the key to high performance for most of America’s successful corporations. Executing strategies effectively and quickly is well-known in the general business world, but it appears not to have crossed the chasm into the health care field. One way to bridge this gulf is to provide more effective education and training to health care leaders nationwide in the area of practical and efficient execution.

In 2009, during the Health Care UST MBA Washington, D.C., seminar, I had the opportunity to meet Dr. Carolyn Clancy, director of the Agency for Healthcare Research and Quality. A primary goal of AHRQ is to improve the processes needed to effectively move major clinical research findings from scientific literature to widespread use by the clinician.

AHRQ agreed to provide funding to the Opus College of Business to develop a new, effective execution curriculum for health care leaders and managers. For more than a year, I consulted with OCB faculty members on best business practices outside of health care and also visited some of the leading health care delivery organizations in the Midwest, including HealthPartners, Essential Health – Duluth, Marshfield Clinic in Marshfield, Wis., and Twin Cities Orthopedics to examine their systems for execution.  Continue Reading

Financing, Health Policy, Leadership, Operations Improvement

Initiatives for Responding to Health Care Reform

By Noi Oan, Full-time UST MBA class of 2013

On June 27, I was excited to leave work a little early to attend the “Initiatives for Responding to Health Care Reform” event at the University of St. Thomas. It was one day before hearing the decision from the Supreme Court regarding the future of the Affordable Care Act. Curiosity and anticipation of what going to happen next was the main driver for me to come to the event.

The panel included Jim Eppel, chief operating officer of Blue Cross Blue Shield of MN, Brian Rice, the vice president of Network and ACO Integration at Allina, and John Herman, the president of Fairview Northland Hospital and Maple Grove Medical Center. Dan McLaughlin, the director of the Center for Health and Medical Affairs, moderated the event.

Each panelist brought to the table a unique perspective about the current health care system and the necessary moves to a better future for their organization. However, one theme arose as the common ground for all panelists: the necessity of patient engagement to improve health quality and control total cost of care. Continue Reading