To Fix Healthcare, Let's Not Just Rearrange the Deck Chairs on the Titanic
As physician, healthcare executive, academic scholar, author, advisor and, most importantly, a patient, I propose the answer to our current healthcare dilemma starts with a laser-like focus on getting patients exactly what they need at continually lower cost. But current healthcare proposals are offering more of the same.
Over the last 40 years, I have heard that we shall transform healthcare by the exact same solutions proffered to Congress by health care industry leaders this week: simplifying administrative costs, making hospitals more efficient, reducing hospitalizations, managing chronic illnesses more effectively and improving health-care information technology.
Yogi Berra said it best: "It's déjà vu all over again."
We are not going to transform healthcare by trying harder at 1978 ideas. Trying harder will instead deliver exactly what it has already delivered -- less care at higher cost
Trying harder is simply rearranging a few more deck chairs on the Titanic -- it might improve the appearance of the healthcare ship, but it will continue to leak and it will inevitably sink. The recent announcement of the eminent insolvency of Medicare Part B suggests our Titanic is taking on water a lot faster than we anticipated and we have a limited number of very antiquated lifeboats with which to save ourselves. We better start building a few more lifeboats fast.
Fortunately, there is a simple set of principles for building more lifeboats and eventually constructing a much better healthcare ship.
To begin, we must recognize that healthcare transformation is not dependent on what we have done in the past or are doing now, but rather on how we adapt what we are doing to a constantly changing environment.
We also must recognize that the structures and systems of current organizations and the habits, behaviors and values of the people embedded within them will usually slow, stall and stop adaptive change. This is an organizational fact of life developed by Harvard Business School Professor Clayton Christensen in his concept of disruptive innovation, and most of us have experienced it.
Therefore, healthcare transformation begins with those few organizations strategically and operationally "designed to adapt." These organizations have incredible competitive advantage in a rapidly changing world. They represent the opportunity. They are where we will make the new lifeboats for our sinking ship.
Christensen says it is almost impossible for an established organization to lead disruptive change. But, if it's "almost impossible," that means it's possible. It means that we can expand the adaptive potential of established organizations, and in doing so, expand the possible solutions for healthcare.
How do we build adaptive organizations? We follow the methods that create great innovations. In healthcare, these methods have been proven to work in many organizations. Here's what the process looks like:
1. Find a place to start close to the patient.
2. Focus exclusively on getting patients exactly what they need at continually lower cost.
3. When that fails to happen, understand why and then rapidly problem-solve the system.
4. Use discipline and structure to rigorously test and validate the solutions.
5. Develop the knowledge and creativity to replicate what works as rapidly as possible.
Working adaptively means developing, leading and challenging the knowledge, creativity and problem solving ability at the point of care, not by sending more data up and implementing more big solutions down, as we have been doing for 40 years.
This time, rather than rearranging the deck chairs on the Titanic, let's develop, coordinate and control problem solving and improvement where the information already is -- in the workplace, at the point of care.
This isn't to say government has no role in transforming health care. Becoming more adaptive requires organizations to work differently and that requires strong leadership. Government can help by creating the safe harbors that encourage adaptive work. It can build the places where management, caregivers, unions, insurance, industry, employers and patients can come together to learn to work differently. But government must be willing to adapt its role. If it does more of the same, we'll all drown.
Dr. John Kenagy MD, MPA is a former Visiting Scholar at Harvard Business School and the author of the forthcoming book Designed to Adapt: Leading Healthcare in Challenging Times (Second River Healthcare Press, 2009).
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Thank you all for your comments. I will respond to as many as I can!
"It's déjà vu all over again!"
The reason the US became the greatest country in the world was because the fathers of the country managed to take the best ideas from the different immigrants and consolidate these.
The reason the US is decades behind these same countries in regards to civil rights and medical care today is because; "we know best".
I have received medical care in Norway, Denmark and Canada where they solved these problem decades ago.
I have also been a member of several HMO's including Keiser, Scott&White, Nevada Health Plan and a few others.
While a majority of Doctors are the best people on the planet, desiring to help humanity, in the US Doctors in HMO's are handicapped by an organization which practice medicine for money.
The problem of excellent medical care has been solved in the rest of the world a long time ago; the solutions you are proposing Dr. Kenagy is just more double-talk, making me think you are paid by HMO's and not working in the interest of the US population!
The question you have to ask is HOW did the rest of Europe solve their medical care issues a long time ago? As of 1990, when the classic study that most people cite to claim that "France has the best health care in the world", they were doing it in several ways. The least of which is having a completely different lifestyle than Americans. They weren't *as* addicted to McD's and Starbucks, had better environmental protocols, and generally took better care of themself with "alternative treatments" that Americans consider "whacko new age stuff". These lifestyle changes has given them a successful go at the pay-as-you-go model of insurance, the more you need, the more you can get, instead of expecting everything up front .
Unfortunately. that won't work in America with our "I want it all, and I want it now" attitude. So long as we are addicted to McDs and Starbucks, and paying $30 for an oversized tuna (as one poster mentioned below) where that money could have been saved on health care, then we will never ever be able to acheive the successes that Europeans had with their health care.
Ironically as more people are being swept into an Americanization of Europe, and more people are insisting on quick and easy access to things like McD's and Starbucks, their health care issues are increasing dramatically since that study was done 20 YEARS AGO saying France had the best health care.
Of course it won't work in America; the only solutions that get backing are those that line the pockets of some greedy corporation headed by people to lazy to make an honest living.
The Americans you know are entirely different from the one's I have had the pleasure of becoming acquainted with: As a matter of fact the one's I know would have been extremely insulted the way you categorize them.
Nope, not paid by HMO's. I have funded the research by either working with healthcare organizations who are willing to test and validate something different in real life or by myself, personally.
And I appreciate also how this may seem like double-talk because it is different.
One of the big differences is I believe we cannot think our way to a new way of acting; we have to act our way to a new way of thinking.
So, frame the action on getting patients exactly what they need at continually lower cost and work up from there. It's a better way to fix health care. The book will tell the whole story.
Part 7 of 7
Hospitals have spent there monies wisely, have color-coded hand-held devices so they don’t bring the wrong one into the operating room. But most importantly, they’ve changed from, a who can pay and who can’t, to true cost accounting and I don’t mean in the IRS sense. But we as a society need to actually advance not to just pay as you go. So therefore, charging ten dollars for an aspirin from an IT perspective, I can’t help you. However, if the reason you’re charging ten dollars is to offset the fact that you have a separate DBA for each database or you need 24/7 support there I can reduce your costs significantly.
Finally, we’ve created a series of checks and balances in our healthcare engine that should help it stop leaking oil. We’ve given everyone a haircut to one degree or another but we’ve refocused on the fact that the goal of our healthcare engine should be on providing better healthcare for ALL Americans and that profits should be earned though innovation and hard work not just by exploiting leaks in the system or clever accounting.
Part 6 of maybe 7
The other thought is that when designing the XML processing procedures it should never be pigeon-holed into what we expect to collect for information. A notebook can have anything in it but a page or maybe even a chapter could be validated but it needs to be remembered this is a data collection system that must change frequently with the pathogens and treatments out in the field. Layered from the unknown but collected (notebook) to the known (page) outside in.
Now the medical office worker, physician and patient all check the accuracy of the EMR. From the physician’s point of view, forms can now be filled out on the hand-held device, new features or workbooks appear tailored to their specialty and particular treatments. Perhaps a table of relatives allows access or just querying the patients relative’s books for pertinent information, but of course this is up for discussion. The hand-devices could now have barcode readers, GPS units and biometric fingerprint readers for drug auditing, security and for access auditing. Deceased people’s books are constantly being sent to the National Archives or CDC for storage and research, a little like donating your body to science without the yuck factor.
What you are proposing WILL result in either our medical records being open for EVERYONE to read OR an HUGE expansion of HIPPA which is ALREADY impossible to ENFORCE. NO person who is not CURRENTLY covered by HIPPA should have ANY access to medical records of ANYONE other than themselves.
It's actually HIPAA. The first thing is that the information never contains a name or address, it can be encoded using the physician's electronic certification and the third is that it's voluntary. The goal is to be able to gather information on the effectiveness of treatments or the possiblity of epidemics. And lastly the information itself can be encoded allowing reading only by the person holding the correct certificate, like a hospital for example.
On second thought I agree with you on HIPAA records. But let's look what is going to happen moving to EMR. I wait a year and then steal every computer in Hollywood from all the physician's offices and then send them to Nigeria and then the blackmail begins. Because the physicians can't pay for the constant security needed to protect their records.
But the issue here is to design a system that separates information and keys. So I'm collecting specimens that I freeze and then sell to the Clinicals. The issue with HIPAA is that I pay the Hollywood Hospital (Joke) for a sample with anal cancer. Guess who.
So What's needed is a third-party that has only one key and set of information to the puzzle the location a sample was collected. This allows us to break everything down into a need to know.
Part 5 of maybe 7
This allows for the creation and refinement of many backend programs that can check on the validity of treatments in so far as medical errors and options are concerned
Next up are the healthcare insurance providers. Because the medical community has its own very precise terminology, what’s covered, partially, wholly or not at all by an insurer can be conducted in an XML contract in a matter of seconds. It should also allow the insurers to provide an alternative treatment to the patient. This provides the patient a cost with an effectively rating and maybe a couple of different optional treatments so the patient in consultation with their physician makes the judgment.
We left the medical records as electronic medical records earlier we need to get them into EMR but I’m of three minds here. The first is that we could have done the conversion when the records were scanned in and using software and our census workers create the EMR, this provides the greatest stimulus to the most people. Or we could scan them in and have the conversion done in places like Elkhart, Indiana or other areas hard hit by this recession. But we could also write software programs to parse, categorize, and convert the data to EMR which would produce valuable programs that could be used outside of our medical records, to XML and Artificial Intelligence programs in general.
Part 4 of maybe 7
At this point we’ve minimized the risk of movement to XML. The physician’s office has had time to adapt their workflow to electronic records, has probably replaced the paper folder racks with another examination room and may have had some cost savings. And they no longer have to worry about marrying an IT person to practice medicine. The telecoms are trying to sell all sorts of services like billing, automated reminder calls, electronic prescriptions the list is endless. The hospitals have identified its different workflows, decided where XML would benefit them and possibly received bids from different software vendors to wrap the individual systems either wholly or partially to take advantage of XML. Now it’s time to move to XML.
The largest cost savings and reduction of medical errors comes not from the EMR record but from the workbooks. This type of workbook is really a best medical practice workflow, in it’s infancy it’s just an electronic record of symptoms, treatment and justification, sent to a third-party like a telecom. The purpose is to prevent a remake of the “Verdict” with Paul Newman except on the History Channel. But to do that the workbooks need to be created and maintained not by an individual software vendors or physicians but by a consortium of interested parties like the medical manufacturers, pharmaceuticals, medical associations, physicians groups and finally the Federal Government for an effectively rating.
Part 3 of maybe 7
At the hospital level we could use the same type of system as at the physician’s office but here since money is available we want to make use of it for future efficiencies. So the first step is to think of each computer system, medical device and medical personnel’s duties as steps in a workbook. The goal is not to run out and replace every computer system you have but rather to identify workflows and steps so that you can layer with an enterprise software service on top of whatever systems and procedures you are currently using. This is the best way to keep integration and training costs to a minimum. This first step sets the basis for measuring metrics across the hospital and after careful analysis selected systems could be replaced. The idea is that the use of EMR records can be implemented outside or on top of your current systems. Disk space is cheap and redundancy of information is not always a sin.
Part 2 of maybe 7 - I should have done this in reverse order
Next we need to look at what is the correct paradigm to use for our medical records. This is simple it’s an electronic loose-leaf notebook that mimics a paper folder but has pages that can be forms or entire computer systems like an MRI system. A simple example would be using the Kindle II to access medical records. Because most physicians medical records are in paper form we need to get them scanned into electronic form and sent to the telecoms. This is labor intensive but requires little training; we could use the workers already being assembled for the 2010 census, providing a very quick stimulus effect across the country. This is not make-work because the unfiltered raw data is the most valuable form of information to researchers if searchable. The census worker leaves behind a scanner, a printer driver (to write to the telecoms) and an electronic certificate of use that allows secure and audited, reading and writing to the medical record. The electronic certificate of use controls the type of information the holder can view or update. For instance, DCF welfare worker may be able to add a report to the book but never read any information . This could have a direct impact on treatment choices. The census worker also performs an audit of what software systems that are currently in use at the office, for later when we convert to XML.
a DCF worker should NEVER have ANY type of access to ANYONE'S medical records and most assuredly should NOT EVER be able to ADD anything to the medical records of anyone.
A child is not anyone. So I disagree unless you can find me a physician that feels knowing about child-abuse incidents would not affect there diagnosis or treatment.
I may have an IT Solution - Part 1 of maybe 7
I want to keep this letter at the concept level and not get into a technology whitepaper, but rest assured everything I’m about to suggest is at the cell-phone level of cost for physicians, a little more at the hospital level because of different needs but most importantly the technology already exists.
There are currently three basic types of medical records,paper medical records, the folder we all know so well, the electronic medical record used mostly at hospitals and the Electronic Medical Records (EMR) which are XML-based records that have the ability to reduce costs and errors because they are programmable and can be validated (checked for accuracy and completene
The first discussion we need to have is who should hold these records. If the goal is to fight disease, find new cures, to identify epidemics and to use these records as a basis for an unparalleled growth of healthcare knowledge over the next ten to fifteen years, we need the records easily and securely accessible. There are two groups that I think have the ability to deal with the billions of pages of medical records. The first is the Federal Government but due to the boom and bust of the budgetary process I prefer the telecoms because they are big enough, have the redundancy, the geographical reach, the competition, the bandwidth and their business model is based on providing reliable services at a low cost.
I share your interest in information technology The problem is our current systems defy Rule #1 of IT – “don’t try to digitalize what you can’t understand and simplify.” Digitalizing chaotic systems yields turbo-chaos.
I believe there is a huge opportunity for IT, but first we have to start with the patient and simplify the work adaptively. You can read a white paper we wrote on this subject some years ago for Microsoft at http://www
AMEN! AT LAST! FINALLY someone around here is talking CARE as opposed to money.
You are exactly correct in your thought that what has been discussed so far is merely re-arranging the deck chairs on the Titanic... AFTER it hit the iceberg. Unfortunately, the vast majority of people screaming for "reform" aren't intelligent enough to grasp the difference between actual care and the almighty dollar. They would rather have more dollars in their pockets so that they can buy a bigger house, nicer car or more STUFF than they would improve medical CARE for people.
I guess it's no longer wrong to put a price on life, because that is exactly what people are doing when they try to settle on a price for something they have NO clue what they're going to get.
But then again, I guess there are people who would rather drink poison than to continue wandering the desert looking for the oasis that's just over the next sand dune
Our research, and many others, suggest that we currently spend way more than we need to for care. And, amazingly, nearly everyone agrees. But for 40 years I have heard this argument debated continually and it usually ends up that every faction has great data that shows their work is cost effective and somebody else needs to change.
I seek to reframe the argument by starting with developing the front line to be able to get patients what they need at continually lower cost and then build care systems back from there. From that frame work, our early results would suggest there is plenty of money in the system to provide everyone what they need.
Sir,
The only way we can have real reform, is to take the for profit insurance companies out of the equation. They have shown that they will sabotage/lobby against any legislation that will affect their bottom line negatively. They need not take part in the debate.
1-Allow employees to increase their contribution to medicare (not increasing employers portion)
2-add 1penny tax to all fast food and alchohol sales.
3-build small, fully equipped wellness clinics throughout urban, low income and rural areas. Staff them with Doctors and nurses who will then be able to deduct their student loan interest on their taxes for the whole time there, or until paid off. Keep 1 or 2 peds nurses/midwives on staff at all times, task them with going to the home of each new mother within a 25 mile radius to do wellness checks on mom/baby and ensure mom knows what she's doing, check for baby blues, etc
4-these clinics should have extended hours, say 7am to 10pm to accommodate the people who's job will be in jeapordy if they have to take off work for doctor visits for them or kids.
5-they will also have a 24hr on call fam practice doctor for minor emergencies to keep people out of the emergency room,: kids fevers, broken arms, scraped knees, etc.
These clinics will charge as a copay whatever folks can afford. Medicare will be allowed to negotiate lower drug prices or get from Canada.
While I agree with you that reducing the insurance iron grip on health care is one of the only ways we can have reform. It is not the only way. Until and unless people start taking better care of themself and stop requiring so much insurance to begin with, we won't have any real reform, because the corporations from Insurance to BigPharma has us by the balls and we are the ones allowing them to gouge our pocketbooks
Hence the reason for wellness clinics in areas where people don't normally have access to family doctors for preventive care. With these clinics, people who never go to a doctor because they can't afford it, or wait until they are so sick they have to go to the emergency room because they can't afford it, will now be able to have preventive care, wellness checks for them and their kids. Talk about healthy diet options, etc.
If this happened, I think we would have a healthier nation in 1 generation.
To my mind, the payer model is less of consequence in implementing great ideas then the actual product delivered. See my comments on payers below.
You have great ideas. We have no shortage of great ideas. What we lack is a structured, replicable way to test, validate, dessiminate and improve great ideas as rapidly as possible.
That takes a different approach. Many colleagues and I have been testing and validating the concept of starting with the patient and working back adaptively. With proven success, it has become time to write about it, hence the book referred to in the post that comes out in September.
The good doctor seems to start out reasonably then loses his way. The resistance to adaption is what we used to call the "Iron Rice Bowl" when it was the reason that Asia was not developing. It was based, as is the health insurance industry, on ripping off the available wealth instead of being creative and moving forward. Now it is the U.S. that has a crop of "Iron Rice Bowls, that need to be broken if the U.S. is to regain world leadership (which will not be the same as that since WWII - if we are intelligent to be leaders at all).
The key to this will be to Keep It Simple Stupid. We need a single payer system based on patient access to care and low administrative costs. There is no way a for-profit industry will work well, except to reap profits for itself. That might be fine if the profits came from foreign countries but our health insurance system is so costly and such a drag on the economy that is it a national security threat.
I like the “Iron Rice Bowl” metaphor. All the players and all the methods we have tried to implement in my 40 years of being in this business have been tied to the various players’ “Iron Rice Bowl.” That has led to less care at more cost.
But insurance costs are only one of a multitude of very expensive Iron Rice Bowls. Unless we solve the problem of getting patients exactly what they need at continually lower cost, ultimately the single payer runs out of money too. See my comment to Fogbelter below
That’s why I champion using Adaptive Design to create a new common “Rice Bowl” centered on getting patients exactly what they need at continually lower cost.
Doctor Kenagy, how about we do away with the for profit aspect of Health Care entirely? Eliminate the investors. the insurance companies, the HMOs and give the Federal Government the opportunity to aggressively negotiate the lowest drug prices possible with Big Pharma?
I mean, all we really need is a Doctor, a Patient, and a minimal amount of Administrative layers between the two. Currently what the offerings of the Health Care Industry, the HMOs, the Insurance Cartel, Big Pharma, and tragically the President and Congress resemble are the early days of Ford when you could have a car in any color you like as long as it's Black ... Black as in "For Profit" in the case of Health Care.
It's time for Universal Single Payer Health Care for the people of the United States paid for by a national consumption tax ... A pay as you go system that everyone owns. That's pretty simple I think, don't you?
Sure, that's simple, if The American people are willing and able to take personal responsibility and do what they need to do to need less insurance than we need now. European countries have a pay-as-you-go system that works...or did up until about 10 years ago....bec
I like your emphasis on simplicity. The problem is meeting healthcare needs of even one individual can be very complex, dynamic and unpredictable. Managing that in a top down fashion is increasingly impossible.
The insurance/payer problem is important. But even in less costly single payer systems, the costs of healthcare are rising rapidly. And the problem is, at that high level, the most common method to control costs is some form of rationing.
In my experience, we will most likely solve the payer problem faster and more effectively by starting with the patient and working back and letting that drive redesign of the payment system adaptively.
Mr Kenagy,
Thank you, thank you thank you! This is the FIRST article on HuffingtonPost that I have seen that actually suggests patient oriented ideas that do not depend on simply reforming insurance! While there are some vague ideas presented here, the general concepts are solid medicine based solutions, rather than simply glossing over the care aspects by concentrating only on cost. We must become a country that is willing to look at the levels of care we are receiving, when we do receive it, then prepare for how to better improve the quality of care as we add more people into the system by giving them better access.
The only criticism I would have is where you say "Government can help by creating the safe harbors that encourage adaptive work. It can build the places where management, caregivers, unions, insurance, industry, employers and patients can come together to learn to work differentl
I would change the order somewhat and say that patients come first, then care givers, then insurance, industry, unions and government.
But, this is an excellent start, and a real first stepping stone to putting the patient and our HEALTH and its care above the bureaucracy of financing such a system
The only way to "start close to the patient" and to give the patient "exactly what they need" is to get rid of the system that marries health insurance with employment. Change the system so that health care is purchased like car insurance; competitive pricing will keep costs down, people can opt for the type of care that best meets their needs, and those that are already employed and insured can keep what they have, or not. Those that cannot afford it can be subsidized by the government, like food stamps. Capitalism at it's best! The worst possible set up is the one we have now, where insurance is tied to employment. It's the unemployed that end up in the emergency room and drive costs sky high, it's the unemployed or uninsured that lose their homes or apartments because of medical bills. For employers who use health care as a benefit, give the employee a stipend to cover the costs of the health care/company of their choice. This way, we all really could have President Obama's insurance! To tie health care to employment
and this is why I say we need to extend UNIVERSAL Coverage to CHILDREN first, then the soldiers (all the TBI and PTSD) and their families..
They still have insurers in Europe who process the claims and are EFFECTIVELY regulated and who also provide supplemental insurance.
And we can do this by instituting a 3% public health financing act. on all income.. and maybe another 3% on incomes over 1 milllion for public health infrastructure,,, the water systems are becoming an issue....
I disagree. We need to take the fear out of PEOPLE'S heads and hearts and tell them to stop worrying about how to pay for something that they don't even know what will be involved until AFTER they get treated. Give people the freedom to say, "I'm sick. I don't care how much it costs. Heal me", then, when the person is healed or on the mend toward being healed, THEN you bring in the insurers, the corporations and the bureaucracy. The only reason we are allowing anyone to stand in our way of getting care is because we let them. We must demand better care before we even discuss how much or who is to pay for it all
Thanks. You exactly right. I should have started the sequence with PATIENTS first. “Patients, care givers, then insurers (single or multi-payer), industry, unions and government” is the appropriate order.
Historically, the evidence suggests transformative innovations provide the end customer with higher quality at lower cost.
So another way to look at healthcare transformation is to ask the question, “Why are we in business?” – If the answer is, “To meet the needs of patients,” starting with getting patients exactly what they need at continually lower cost, and then working back to create the systems that deliver, will have the most likelihood of success.
And these ideas are not theoretical. Using the concept of Adaptive Design we have created highly adaptive units that are increasingly capable of getting patients exactly what they need at continually lower cost in multiple organizations around the country. Hence my book to be published in September that details the “how to do it.”
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