seven-levers-of-change-archimedes-lever

I talk to people all the time in health care at big civic gatherings; board retreats; conventions of nurses, physicians, managers of medical groups and accountable care organizations and health plans and device manufacturers. I give a talk, sit on a panel, run a discussion — and the rest of the time I listen, over lunch, over drinks, on the bus to the hospital tour. An older small-town pediatrician in Illinois. A freshly minted resident at the Cleveland Clinics. Strategy teams at the nation’s largest insurers. CEOs of the most established health care systems, and of the upstarts shaving market share away from them.

Here’s what I hear: We are approaching a tipping point. Forces are gathering, the foundation is shifting, change that is incremental will soon become discontinuous, a cascade of new and old energies, skills, and assets into something that is barely recognizable from here. Where’s the map? Where’s the handbook? I’ve written one.

HOW TO GET WHAT WE PAY FOR: A Handbook for the Revolutionaries – Doctors, nurses, healthcare leaders, inventors, investors, employers, insurers, governments, consumers, YOU.

It will be out in a couple of months. Here’s the point:

Our health care system is often derided as having nothing of a “system” about it. But it is a system, a complex adaptive system, with all the attributes of systemness including a penchant for what evolution science calls “punctuated equilibrium” — long periods of seeming stasis and incremental change punctuated by rapid tumultuous shifts into the next period of stasis, a new normal with different expectations, energy exchanges and species.

People sense this. Some health care executives I talk to feel sure of their future, buoyed and confident. Most don’t. Most sense that we are not through the scariest white water stretch yet. Most can hear the thunder.

No Handbook

People sense that the crux of the change lies somewhere behind the vague phrase “volume to value.” People sense as well that the instability is a natural precipitate of what can seem to be the radical tension between the three sides of the Institute for Health Improvement’s robust Triple Aim: better patient care, better population health and lower per capita costs. But few in health care have any sharp sense of what the new shape of health care will be. The old handbook for how to make this work seems to be losing its coherence, shedding pages, falling out of date. It’s lost behind the couch cushions, it’s showing up at garage sales.

It’s when we ask a different question that we can begin to see the shape of the coming new normal and begin to strategize what our place in it might be, how we survive the transition, and how we will make a living on the other side of that border that marks the Next Health Care.

That different question is: If we imagine that health care is being pushed to a tipping point, what’s doing the pushing? It obviously isn’t the ACA alone. What are the levers that are getting health care moving as it never has before?

I can see seven. Since we are talking about a system, these levers of change are not independent or merely parallel. They build on one another. Any one of them would change health care significantly. To the extent that they all come together, and are used and pushed and exploited by providers, payers, purchasers, consumers and health care entrepreneurs alike, we will see change that is massive, rapid and even somewhat coherent, pushing health care into a new status quo of much better patient care, much better population health and seriously lower cost.

What are they?

The Seven Levers of Change

Shopping. Employers, other large purchasers of health care, and consumers alike are finding and inventing multiple ways to actually shop on price and quality, from retail and direct pay primary care, to bundled offerings, to medical tourism. This trend is in direct opposition to the narrow networks of the emerging Default Model, which severely restrict patient and purchaser choice. This is why the Default Model appears fragile. It is hard to imagine much future for a business model that most of your ultimate customers view with fear and loathing.

Part of that drive is turning the end customers (the suffering “patients” and the patients’ caregivers) into shoppers who are paying at least some of the cost directly, with the knowledge, options and buying power to make sensible choices at various levels of the health care system, whether that is in shopping for health insurance, or in buying a whole new knee or the birthing of a well baby. To do this, the customer has to find the answers to the usual questions any customer asks, such as how good is this thing that is on offer? How does its quality compare with its rivals? How much will it actually cost me? What kind of warranties and guarantees will I be given? Is this really necessary or even useful? What are alternative ways of solving this problem?

Answer those questions, and you begin to have true “consumer directed health care.”

Transparency. You can’t be a shopper if there are no price tags. Until just recently the idea of price tags in health care sounded just weird, like camels in a hockey tournament. There was no way to know how much any given procedure or test would actually cost, or how well it would turn out, or whether you really need it. If transparency still seems weird to you, now would be a good time to get over it. There are multiple new sources of information arising, not only about price but about quality and alternatives. Some are crowd sourced through the Internet, some provided by employers or health plans based on actual payments. And increasingly, both employers and health plans are demanding “bundled” prices for a procedure or test with no add-ons or surprises, backed by quality information and even warranties.

The key thing that customers of any kind want to know — and pay for — is not process or statistical averages. They want results.

Results. At a restaurant, you don’t pay if the steak is burnt or never shows up. In health care we traditionally pay for services (“fee for service”) whether or not it turns out they helped or were even necessary. Though it is obviously more complex in health care than in a restaurant, employers and health plans are increasingly finding ways to pay more for higher quality, to steer patients and employees away from institutions that make more mistakes, and to actually directly pay providers to improve your health, giving them more money if their panels of patients achieve higher health quality markers and have less cause to use emergency services, surgery and other expensive acute procedures and tests.

In other words, how can we reward the medical best result we can hope for, which is to never need expensive acute services at all?

Prevention. The No. 1 way to lower costs in health care is to stop paying for things that don’t help, to end waste (one-third of all health care) by shifting away from a code-based fee-for-service system that rewards inappropriate and wasteful overtreatment.

The No. 2 way is to prevent chronic disease, and to manage it so that it does not become acute. For this your customers need real help to connect with a patient-centered medical home that has a direct financial incentive to help them stay well. They need real support and incentives for outreach efforts, workplace health and home health. And they need real support for healthier community efforts.

Targeting. Some people use way more health care than other people. Over any given time span, for any given population, about 5 percent of the people use half of all the health care resources. Some of those folks just got hit by a bus, some have pancreatic cancer. But many others have poorly treated chronic disease and stay in the same high spending category month after month, even year after year. Many programs have shown that if you give that 5 percent with multiple chronic problems extra attention and care you can reduce their costs by as much as 20 percent to 25 percent. So just by giving this small group special attention, you can drive down the costs of the whole population by 10 percent to 12.5 percent.

But to do this, to do any of this, you have to build trust with your customers. Not image management. Trust.

Trust. When your customers deal with the vast complex mess of health care, their No. 1 felt need is for a trusted partner. If they can’t trust you and feel you will be there for them now and next year and at their moment of greatest crisis, and that you will not bankrupt them, they don’t want to be your customer. Even worse, if they don’t trust you, none of the other strategies will work with them. Building person-to-person trusted relationships seems like an expensive proposition on the front end, but over time it is the single most productive efficiency engine in health care, simply because it works.

This is a tough strategic problem for health care, because it is structural. The emerging narrow-networks Default Model, with its complexity, its opacity, its random and arbitrary micro-management of coverage, and its adversarial “gotcha”-style risk mitigation, drives all trust out of the system. Your image just doesn’t matter when your customers cannot trust you, and you cannot be their trusted partner.

We will see more and more health care providers seeking other business models that allow them to build trusted relationships with their customers and live up to their promises over months and years and generations. As more of health care achieves this, trust will become a major catalyst for change across the system.

Tech. Tech is not the cause of rapid change in health care, but it is certainly a major facilitator of change. Or it will be, once we get past the current clunky-sucky generation of most health care information technology and rebuild it to be transparent, connected, mobile-empowered, capable of generating real-time “big data” to steer the enterprise and maximally easy for clinicians to use. Tech has the still mostly latent capability of driving rapid change:

  • Medically, through new processes that obviate the need for expensive and dangerous surgeries and procedures;
  • clinically, by enabling new efficiencies in documentation, processes and workflow, and by managing transparent dataflow across the continuum of care; and
  • analytically, allowing enterprise leaders to see into these new, vastly more complex economic and clinical systems in real time.

In what may in the end be its most important role, tech will shift the relationship of the customer to the system, through mobile devices, apps, dongles, wearables and the “Internet of Things,” creating a web of constant or on-demand connection for those trusted relationships that must form the substrate of any new system.

The Seven Levers — and You

Margin is oxygen. But how we drive toward that sustaining margin, what business lines we launch and support, where we generate revenue and capital and where we spend it, all drive back to your mission: What are you here for? Because like the song says, you’re going to have to serve somebody. It might be your own narrow interests. It might be those deep values that we all hold together, the sense that we are after all a society, that we are in this together, that we are who we are because of each other.

Is this easy? No, it is hard, very hard.

Is this possible? Definitely. For the first time we have the tools do this, the technology, the awareness, the business models and the alignment of forces.

Will you have allies? Yes. You will.

Wherever you are in health care, as a physician, as a health care leader, a payer, a funder, a tech genius, thinking about how to put your back into any one of these seven levers is a real stretch, a big hairy audacious goal. Thinking about how all of us together can put our backs, our talents, our resources, our energies into all seven levers constitutes a new kind of handbook for health care, a handbook for the revolutionaries.

 

A slightly altered version of an article originally published in the American Hospital Association’s Hospitals and Health Networks Daily, March 25, 2015.