THE BLOG
11/08/2009 05:12 am ET Updated May 25, 2011

An Obama Health Care Reform Scorecard

I am going to be watching as President Obama addresses Congress tomorrow evening on his health care reform initiative. If his speech moves us closer to more care at lower cost, I'm on board. But how will I know? Perhaps I need a scorecard.

The inspiration for a health care reform scorecard came to me on Labor Day. No single person or political group masterminded the U.S. labor movement. It formed gradually, based on input from local and national leadership, worker activists, unions, and enlightened managers, about the need for fair pay, workplace safety, diversity and productivity.

As I thought about the history of Labor Day, I understood the importance of judging the government's ability to lead and facilitate for health care the kind of multifaceted, continually improvable reform that transformed the workplace from what it was in the early 20th century to what it is today. The history of transformational innovation and my experience in creating highly adaptive health care organizations provides guidelines for a scorecard.

For example, Harvard Business School Professor Clayton Christensen's concept of disruptive innovation shows the success factors in "much more for much less" are always off the radar screen of current industry leaders.

Here are some disruptive examples. This column is being written on a computer with much more power than the giant 1980's mainframes and it was built at a tiny fraction of the cost. Personal computers are a disruptive innovation that delivered much more for much less. Likewise, the U.S. auto industry was disrupted by a new, more flexible and responsive management system led by Toyota that provided more car for less cost. And in the same way, steamships replaced sailing ships, telephones replaced telegraphs, mutual funds replaced the traditional stockbrokers. It's a recurrent theme -- more for less.

The same "more for less" framework applies to health care and is the subject of my new book, Designed to Adapt: Leading Healthcare in Challenging Times (Second River Healthcare Press, September 2009). This framework creates a scorecard for achieving similar "more for less" results in health care, with pluses and minuses leading to a final score.

A score of 100 denotes a system perfectly designed to get patients exactly what they need at continually lower cost. Anything less means we have opportunity for improvement.

So where do we stand now? And how will you score President Obama's initiatives on Wednesday night?

Let's start the scoring with the current players. We all agree current systems don't work effectively. But in my 40-year experience in health care, I have found that everyone assumes somebody else is going to change, not "me." But, unless all the players change, we won't have a transformational improvement.

In politics, being a "player" often means money and influence. With that definition I lump the players into five groups: Insurance, Pharmaceuticals, Hospitals/Health Systems, Technology (IT and otherwise), and Caregivers (everybody thinks "doctors" but they are just an important minority of caregivers).

Since change is essential, start with 100 and subtract 20 points for every "player" who finds the reform plan acceptable. On my scorecard, a reform plan that is "acceptable" to all the players will have a zero percent chance of transforming health care.

So, that's the negative. Fortunately, there are lots of positives, but they may not be on the radar screens of the current players.

Add 20 points to the scorecard for each initiative that is direct, clear, simple and meaningful. Great, successful policy initiatives are direct, clear, simple, and meaningful. John Kennedy didn't say, "Let's build a great space program." He said, "Let's put a man on the moon in a decade." The objective of health care reform should be just as direct, clear, simple and meaningful -- to get patients exactly what they need at continually lower cost.

Add 5 points for each initiative that accelerates adaptive capacity at the frontline. Governmental initiatives with direct, clear, simple, meaningful goals are always delivered by grassroots efforts. Again, think back to the labor movement. Leadership and management were essential, but the answers always came from the frontline, close to where value was generated. Therefore, successful health care reform must facilitate effective frontline leadership and develop the knowledge, creativity and problem solving ability at the point of care. My previous columns and book show how health care is already being transformed and how organizations can be designed to adapt from the patient up.

Add 5 points for each initiative that takes down barriers to getting patients exactly what they need at continually lower cost. As soon as adaptive capacity starts to develop, it will run into roadblocks from the players in the current system. The success of the labor movement is just one example of how governmental initiatives focused on removing specific organizational barriers and political land mines to improvement accelerate transformation.

Let's look at an example of the scorecard in action by rating health care information technology initiatives. Based on my scorecard, you must deduct 20 points for every initiative that subsidizes the big, expensive, data-collecting health care IT systems we are currently spending billions on. The National Academy of Sciences' National Research Council Report proves this kind of IT investment will not deliver, see Health Care IT.

However, you can add 5 points for every initiative that facilitates IT systems that are less costly, modular, fast, flexible, friendly, and responsive. Think smart phones, portability, distributed networks, intraoperability, personal substitutability of programs and locally improvable. That's the kind of IT that will empower the frontline and enable the transformation of health care. The history of innovation shows it is the ability to rapidly score these 5-point wins that really makes the difference.

That's my Health care Reform Scorecard. The more acceptable the initiative to current, established players, the more you subtract. Positive scores are generated by a clear direction toward "more care for less cost" delivered by many flexible initiatives that empower the health care frontline. Government makes its greatest contribution by taking down the barriers to improvement, not designing solutions. IT transforms from the negative, current, expensive, "big fix solution," to positive low cost tools to accelerate the transformation. The closer we get to a score of 100 the better we are. More care for less cost; that's the way to transform health care.

Dr. John Kenagy is a physician, patient and former Visiting Scholar at Harvard Business School. Find more information on his new book, Designed to Adapt: Leading Healthcare in Challenging Times, at www.johnkenagy.com.