The double doors to the ambulance bay slide open, and one more patient on a gurney is hauled across the threshold of your Emergency Department. This one’s in diabetic shock.

Stop the picture right there and ask yourself: Is this a medical success, because you can do something for this person? Or a medical failure, because diabetic shock is entirely preventable and no one helped anyone to prevent it?

That’s the medical question. But you have to take one step further back to ask the question that will determine whether your organization thrives or dies over the next few years. The question is: Is this case a business asset? Or a business failure?

Under the classic fee-for-service arrangement, the case is a business asset. You can make money off that case. As long as they have insurance, or can be qualified for Medicaid, that person represents more volume. Under fee for service, the success equation is reimbursement per chargeable item times volume.

Under any kind of shared-risk arrangement that person represents a business failure. The moment they show up you have already lost money on the case. You were in essence paid to prevent it, and now all the costs of recovery are just plain costs.

“Volume to value,” the shift from doing fee-for-service medicine to taking a financial risk in one way or another on the health of the populations you serve, means a major shift in revenue streams, costs, and most importantly partners.

How do you handle that? How do you survive in a world in which you are sharing risk? How do you survive by preventing the large acute cases that used to be your biggest sources of income? It’s not easy, and it’s probably impossible for you to do by yourself. You need partners, including partnerships that are beyond the experience, training, and even comfort zone of many people who currently run healthcare organizations.

The technical parts are hard enough, such as what kind of corporate structures, joint ventures, revenue- and cost-sharing arrangements you should build, with what kind of risk structures and reinsurance schemes, as well as how you coordinate information structures across institutional lines. That’s hard enough. But however correctly you execute on the technical parts, none of it will work without a secret sauce: Trust.

The Secret Sauce: Trust

Maybe this sounds a little “Kumbayah” to you, a little soft and fuzzy. But in fact it is a hard functional reality that we need to get clear on for the life and risk of death of your organization.

I’ll give you an example. Take a look at your computer. Look at its conceptual world: a virtual desktop with files in folders, a virtual trash can, a pointer. Most of that was invented by Xerox’s Palo Alto Research Center (Xerox PARC), with the mouse licensed by PARC from SRI (Stanford Research International) just down the road. So why aren’t we all working on Xerox computers? What happened? How did all that end up being the now-familiar world of Apple and Microsoft?

It’s a complicated story of not hitting the market right, wrong pricing, hardware and software really not ready for prime time, the usual. But when a later head of Xerox PARC asked the question, he pinpointed the key problem: Trust. The company marketing and strategy departments based in Rochester, New York, did not really understand the new desktop computer world. The sales force’s incentives were much better for their traditional copier products. The company’s own offices never used the new Xerox Star 8010 system or its successors like the 6085.

The real lines of trust ran socially between the engineers at Xerox PARC and those at SRI, and friends and acquaintances in the burgeoning personal computer industry, including famously Steve Jobs at Apple and Bill Gates at Microsoft. These people knew each other, understood the world the same way, talked the same language, and saw the enormous potential of using these ideas for much better, faster, cheaper personal computers. (See John Seely Brown and Paul Duguid, The Social Life of Information).

Lines of trust in an organization or across organizational lines are powerful efficiency engines, speeding information and plans and experience from one node to others who can actually put them into action, while impeding their transfer across gaps in your trust structure.

If you have ever tried to run a healthcare organization using the skills and creative effort of multiple different types of professionals, not just doctors and nurses, but interventional radiologists and physical therapists and pathologists and pediatric rheumatologists, you know it can be like herding bees — and just blaming them is no help. Cajoling, badgering, and trust exercises at weekend retreats won’t do it. Trust has to built into the structure of the enterprise.

Risk Is The Reciprocal Of Trust

In the new “volume to value” world, the problem is magnified. If you take on a per-person per-month contract for managing the diabetes of a Medicaid population or, say, back pain for a population of warehouse workers, or whole lives under a fully-capitated arrangement, you are no longer in the business of treating disease. Treating disease is only one of the tools for managing the patients’ health, and it is by far the most expensive way. What were revenue sources — procedures and surgeries and such — are now costs. So it is worth the life of your business to figure out whether they are avoidable costs. You are now in the business of managing the health of strangers, and you can’t do that by remote control. Can’t be done. Every method known requires not just the cooperation but the real bedrock trust of your patient population. And seamless coordinated care requires seamless lines of trust among all the clinicians involved.

Some 20 years ago Memorial Hospital in South Bend, Indiana, under the guidance of the great healthcare consultant Lee Kaiser, decided they needed to prepare for a future in which they would be at risk for the health of many people who were then uninsured. They decided to do this by simply giving them comprehensive health care. They would create special fully-paid accounts for them under their captive insurance program, and go to poor side of town and just give away 400 family insurance cards.

They called Lee after trying this for a weekend.

“How many did you sign up?” he asked.

“None. Not one family. They didn’t believe us. There had to be a catch.”

“Wait a minute. Who did this? Who went door to door?”

“We did.”

“Really. Bunch of white guys in suits from the big institution downtown came knocking on their door offering them expensive stuff for free? Why wouldn’t they believe you? Let’s figure out who they would actually trust.”

Lee flew to South Bend. The hospital asked local pastors to come to a meeting and explained their problem to them. The pastors were happy to help. They went door to door and held events at their churches, and the 400 trial families were signed up in one weekend. The lines of trust were an engine of efficiency in getting people to work with them.

Who’s On My Side?

The best studies, clinical experience, and the record of such programs as Nurse Family Partnerships and the Iowa Chronic Care Consortium show that people trust someone:

  • Who they believe is on their side
  • Who knows them and has a relationship with them, 
or at least lives in their community
  • With the credentials (such as an RN, an NP, or an 
MD after their name) to know what they are talking about

The Iowa Chronic Care Consortium, for instance, managed to lower diabetes events in the rural counties it covers by six percent, not huge but way better than the steady rise they had experienced before. Part of their successful formula was to reduce the number of patients managed by each care coordinator to only 250, half as many as in other programs, and to use diabetes education programs that already existed in the patients’ own communities.

Similarly, when the Alaska Tribal Health Consortium and the native-owned Southcentral Foundation took their healthcare system over from the Indian Health Service, they redesigned every aspect of the system along the lines of tribal values, including working entirely in persistent teams, working with persistent panels of patients so that they built trusted relationships with them; rewarding the teams significantly for improving the health of their panels of patients; and shifting staffing so that most of the people the patients dealt with looked like them, talked like them, and came from their community. The results were very significant improvements in health markers, including large drops in hospital admits, ED admits, pediatric asthma, diabetes, addictions, and many other major health problems of that population.

Nurse Family Partnerships have existed in a number of places across the country for decades, usually funded by state and local governments. Nurses in NFPs aggressively seek out young pregnant women in the community for special help and fundamental education.

How fundamental? One article about a similar program was headlined, “Don’t put Mountain Dew in a baby bottle.” Seriously, that was a prime instruction that many of these young mothers had never heard. A recent long-term study showed that, over time, such programs reduce abuse, neglect, poisonings, and accidents by half — problems that 
would end up in the hospital emergency department as expensive cases. Counting those results as well as drops in arrests and other problems with both the children (up to age 18) and the mothers, the programs actually save governments considerable money. In fact, the return on investment (ROI) is 570 percent — every dollar a state or local government invests returns nearly $6 in savings.

Despite this high ROI, Nurse Family Partnerships have continually struggled to find funding, because the expense is in today’s budget, while the return is in the future and a benefit to someone else’s budget. In the Next Healthcare, in which health systems are often at risk for the health of populations, a smart health system would make a business out of it, finding a way to recoup some of that ROI through their risk-based contracts, especially in Medicaid services.

There are numerous papers and articles out there alleging that disease management doesn’t work, population health management doesn’t work, prevention programs don’t work either to improve people’s health or to lower costs. Look closely at the nature of the programs cited in those articles. What you will find is that they are programs that insert some third party into the equation, often someone in a call center reading from a script, or even a qualified nurse in person — but one who does not really know the community. These programs are searching for the less expensive, more “efficient” way to guide patients — but in the process they are short-circuiting trust.

Over time, the effort to short-circuit such trusted relationships has proven both expensive and fruitless. Real change in patient behavior happens only in the context of trusted relationships. The trusted pathway of the Next Healthcare is not a simulation, it’s the real thing. It’s what you would want if someone were helping you.

Divide and concur

Effective population health management and prevention requires establishing trusted relationships with all of the population. Since people are in many different situations, this means you have to divide the market, and target strategies to specific parts of it.

The major divide is between strategies aimed at the whole community, and those aimed at “super users.”

Over any given period of time, over any given population, roughly half of all medical expenditures are generated by 5 percent of the people; 20 percent are generated by 1 percent. Who are these high spenders? Some are in a major health crisis. They have metastatic cancer, or they just got hit by a bus. Next year they will not be high spenders. They will be healed, or they will have lost the battle. Many of the high spenders, though, are in that category month after month, even year after year. They are typically people with multiple chronic conditions, poorly treated or untreated, that lead to multiple acute episodes.

Anyone who shows up in an Emergency Department 10 times in one year is a “super user.” The reason to identify them is that multiple pilot programs have shown that if you give them some serious medical help and hand-holding, you can drive down their acute episodes, help them manage their chronic conditions, make them healthier and happier — and save money at the same time. Boeing is the prime example, saving some 20 to 25 percent of the money usually spent on its top 5 percent “super users” by hooking them up with dedicated teams of clinicians. If you are saving 25 percent on the 5 percent that generates 50 percent of the expenses, do the math: That means you are saving 12.5 percent on the entire population.

There are actually many programs across the country that work like this that, either by design or as a consequence of the way the program sorts patients, ends up bringing significantly more help to the least-connected, most-beset 5 percent, and through that saving money on the whole population.

Population management and “healthy communities” programs work with the whole population, but at far lower cost. But here again, robo-calling, call centers, and other disconnected attempts at connection don’t work: “Hi, I’m from the big institution or the health plan that you fear. I don’t know you, I don’t sound like you and I don’t live in your community — but let me tell you how you should change your life.” The secret sauce in programs that work is using trusted pathways to reach the least-connected populations, as we saw the Alaska Natives working with the tribal structure, and Methodist LeBonheur Health System in Memphis allying with churches in a very church-oriented town. Other programs work through fraternal organizations, through neighborhood leaders, through employers, through unions, or through neighborhood federally qualified community health clinics — any situation in which people know each other and can join with their neighbors.

Trust is fractal, it is self-similar at all scales, and so are its effects.

Take it granular. Promote “health posses.” Studies show a strong correlation between people’s health status and the number and strength of their connections with others. Navigating the health system and what you need to do for your own health is hard, and the more disconnected, disadvantaged, and discombobulated by disease or addiction you are, the harder it is. Everyone should have one, two, or a few people (spouse, friends, family) whom they trust intimately to help them through the process — look after each other, go to the doctor and pharmacist with them to ask questions and take notes, and to look for alternatives. This might be the biggest single change that you can help people with.

Trust is not a PR problem. It’s not a marketing problem. You cannot market trust into existence. If people’s experience of your organization is at odds with your marketing, your marketing will lose that fight, because people do talk about their experience vividly and with passion. You have to really be on their side, you have to mean it, and you have to show it in their every experience of you.

Is trust expensive? In full time equivalencies in this year’s budget, yes. But if you are at risk for the health of any population, it will more than pay for itself over time.

Within and across organizations

Of course, the Trust Algorithm does not operate solely in dealing with patients and patient populations. It also strongly enhances or impedes everything you are trying to do within the organization. Executives of healthcare organizations, if they have been paying attention, have learned this powerfully in all the consolidations and re-organizations of recent years. Many have not been paying attention, though. Buying up physician practices, then moving them around like Legos to different parts of town, severing their existing patient relationships and forcing them to build new ones, is not the golden road to lowering costs and improving outcomes. Doesn’t work. Nor is forming accountable care organizations or other alliances united by shared risk contracts, without finding ways to bring the doctors together to create their own satisfactory work pathways, with IT that gives them the patient information they need from their colleagues, and with compensation that reflects their contribution to the whole process. The majority of all medical adverse events and malpractice cases arise out of poor communication among clinicians. I have a number of times in different markets seen groups of physicians go “on strike” against other specialist groups with whom they have been lumped in ACOs, refusing to refer patients to them unless they learn to communicate fully, accurately, and promptly.

This is the true secret sauce of organizations like Kaiser, Mayo, Geisinger, Scott an White, and Intermountain: Most of the doctors work together regularly over time, often in the same building. They have a trust relationship.

You cannot cannot simply assume trust between different groups of doctors. Distrust is the default. They have to actively build trust.

Trying to build a broad seamless organization without building trust, trying to cost-cut your way forward at the expense of trust, is simply bad management. In healthcare much more than other businesses, trust is the glue and fuel of the organization.

Trust Audit

Every organization needs to do a deep, careful Trust Audit. Study your organization and ask honestly what the experience of the process is for patients, different kinds of patients, patient families, employers, payers, and the community at large, as well as for your physicians and nurses, and between your clinicians and those in organizations you are partnering with. Gather information by actually asking people what their experience is through focus groups, surveys, and interviews. Find the gaps. Never tell yourself a story about why they should trust you. That’s a null story, and not helpful. Find out where they don’t, and then explore in all seriousness how you can change that.

Trust is the hidden, undiscussed, most neglected engine of efficiency, lower cost, and better outcomes in the new landscape of healthcare. Building real trust between real people is not the cheap way, but it is the effective way, and in the end the lower-cost way, to build the healthcare of the future.


First published in the Spring 2016 edition of Optum’s Risk Matters, available here.