New Year’s Resolution

Most of us cannot resist the temptation of new year's resolutions this time of year but, in health care, the needed change will be tricky. The opportunities we have been presented by the crisis in health care costs and the framework of reform do not need new commitments to work harder, longer or even better. The major challenge we face today and for the next few years is how to work differently.

Most of our colleagues in health care leadership roles are very conscientious; they are committed to their work and their institutions. Over the past few months there has been a lot of dedicated effort to the task of understanding how an Accountable Care Organization (ACO) will work in the new scheme of things, how an existing primary care practice might become a patient centered medical home, how clinics might use the new structures to serve their traditional clients in a better fashion or how access to new information systems can make the existing care system move more efficiently and safely. Besides the dedication to the work what each of these efforts share is a commitment to advancing the status quo of institutions, practices and relationships that have grown up in health care over the past half century.

And this is exactly what is wrong with these well intentioned efforts.

To truly address the current challenges that America’s health system faces and to take full advantage of the scope of the reform legislation will require the most heroic of all leadership skills: assuming nothing. Leaders rarely get to this state of a completely open mind but long term success, not just survival, will depend on such action. Here are some thoughts on how this process might work and some warnings to consider as the year begins.

Get me to an ACO – That vast sucking sound you hear is the rush to attend a conference addressing how your – practice, clinic, health plan, laboratory, hospital - will find its way into a new ACO once these models have been released. Most of the people teaching these sessions have a difficult time spelling ACO much less have the insight to describe what they will look like and how they will perform. That is to be expected as no one really knows. The legislation allows for many types of organizations and none of us has done it before. All of this means that there is not really a technical fix that consultants or commentators can or should be selling. The promise of an ACO is the integration of care services along prevention, diagnosis and treatment. It means understanding patient/customer needs exquisitely well and moving services to meet these needs along the service cascade in a way that provides the best, least expensive service to meet the need. It does not mean maintaining a hospital, practice or clinic just because it has always been there or always done a good job as determined by the incumbents employed by the institution or organization.

While this work needs to be informed by what will be possible in the new financial and legal structures afforded by ACOs it will be far more important for health care leaders to focus on following three key areas.

Knowing the customer -  First, what do our patients/clients/customers really need and want? We have projected many things on to these consumers in the past but every current health care organization that wants to participate with integrity in the transition to an integrated system must begin with an honest, informed and objective collection of these data. We do not have much in the way of market information in health care. The process has been one in which the consumer got what we were offering and should be happy to have access to that without many questions or demands. The emerging system will turn on better market information. These are difficult questions to get at, but those leaders that spend the time to develop ways to receive this information continuously will position their organizations for success. And it will be best to remember that all customers are not the same. The general lack of market information is hampered by almost no market segmentation in health care. As everyone pretty much got what was offered or it was customized to every individual during the visit, it was impossible to gain efficacies of scale, target needs, or satisfy particular preferences for service. Patient needs vary and they do so largely by identifiable groups. Having this information and this framework will be essential to creating an integrated system that meets needs and doesn’t just over build capacity.

Knowing your strengths – As our systems of care turn on the service axis from provider satisfying to customer satisfying it will be important to know what strengths or assets are held by each organization. The information about these has been for the most part remarkably uncritical, if not mythological. Now, and as we go forward, it will be essential to understand what the actual strengths are. A set of benchmarks should be the first step in this assessment. The benchmarks should be across the full range of functions for an organization from governance to operations and finance, not just clinical efficacy. These benchmarks should be used to target strategies of course, but they should also be a key part of the assessment of why and how the organization becomes a part of a large integrated system. Determining strengths will be more difficult as all of the dimensions of the emerging system cannot be known, but key core competencies should be in place. Is there a system of governance that provides the oversight, direction and support that are needed? Is there a planning process that clearly establishes mission and vision and articulates strategies and plans to achieve both? Do the human resources system and policies tie to the overall plan and are they consistent with the culture of the organization? Is there a financial system that monitors operations and ties to strategic goals? Does everyone in the organization understand the strengths? Asking hard questions about assets to ensure that they are truly strengths will provide the wisdom and insight to choose the right partners and the confidence to push ahead when the going inevitably gets tough.

Knowing your weaknesses – Every area of organizational performance will not be a strength, but it is essential to assess every area. Understanding these weaknesses are key to improving organizational performance and for guiding the creation or participation in a more integrated system of health. Some integrations will involve organizations of similar strengths and weaknesses as they combine their markets to grow the overall organization. More likely organizations will merge into more integrated systems because they bring different assets that might become complimentary if they could be aligned in a proper fashion. This will not mean organizations performing under a new system name but still carrying out “their” health care work in the same manner. To get new value out of health care the integration will mean that some things that have been done in the past will need to be taken over by others or even let go of because they produce little value for the patient or the outcomes that the larger system is attempting to achieve. A major part of organizational success in the new health care system will be the capacity to recognize these weaknesses and let this work go to others that can perform it more effectively and efficiently. These changes will pinch at professional prerogatives and preferences but developing the strategic wisdom to recognize the necessity of such changes will be essential if real value from integration is to be derived from the change process.

General Eisenhower, the master of logistics and integration, once said “plans are nothing, planning is everything.” We might take some liberties with that today in health care and conclude, ACOs are nothing, true integration is everything.