Thinking outside the Health Care Box, Leveraging Lessons from Other Service Providers
May 2, 2011 § Leave a comment
by Randy Atkin and Ken Morton
The US health care market is entering ”interesting times” – increased government participation, smarter and more involved consumers, and global influence and competition place health care in the United States at a major cross roads. The key question: Is the present business model sustainable? The topic is drawing attention of the media, government and public thought leaders like Professors Clayton Christensen and Michael Porter of the Harvard Business School, both having recently provided analyses and recommendations with regard to the need for change in America’s health care system.
In response to these challenges, American consumers will push for transparency, enhanced quality, and administrative efficiency in health care delivery in pursuit of their own well being. Governments will necessarily need to facilitate this access. Buyers of these services are making, and will continue to make comparisons to other industries and (internal and external) markets. These drivers will ultimately test the sustainability of marginal players in the US (i.e., health providers with less than top notch quality, efficient operations and reasonable prices, aka strong patient value propositions).
Unfortunately, American industry has seen declining market share and revenues. Looking inward for answers to growing global competition and consumer value sensitivity has not provided concrete solutions. The US health care industry is not entirely shielded from these same competitive factors, and health care is no longer a ‘local, price insensitive delivery system’ as some would argue. For example, it is possible to order prescriptions by mail from other countries at lower cost, it is possible to consult with a physician over internet delivered video services, and it is possible to fly to another country in order to have surgery at less expense than in the US.
What can our health care system learn from best practices in other industries that can prepare it for the business pressures arising from greater government involvement, a more enlightened and value sensitive consumer, and the potential for greater global competition? We believe there are three main areas where the US health delivery system could benefit from the experience of other service industries that have faced similar challenges:
- Process design and control: improving patient handling and management for better quality scores, higher satisfaction and lower costs relate closely to the payments transaction and investment management businesses where consumer relationship with local banks and advisors has rapidly evolved to a global market place of services.
- Information management and security: Having the right information in the right hands at the right time to improve efficiencies, makes better decisions and reduces unnecessary treatments. This focus on better information management, availability and analysis, has helped credit card processors reduce fraud by billions of dollars. At the same time, improved security has allowed greater access and availability across legal and banking networks.
- Asset management optimization: Approach care delivery management like an investment advisor, including monitoring your patients’ health metrics throughout their life stages, providing access to the right expert resources as/when required will assist them in understanding the ‘investments’ in health choices that they may face. Making the consumer an accountable member of the team, sharing information, and encouraging a proactive stance to one’s health as an asset to be managed should improve the health dividend yields.
Comparison to Financial Services
Recently a colleague saw his doctor about a boil on his finger. As it happens the doctor could not heal it but would recommend a specialist. The doctor picked up his mobile computer, keyed in a request and said the appointment was set-up. As it happened, instead of making a query into the specialist’s calendar, confirming the referral and securing the appointment the doctor’s electronic message went 50 feet down the hall to the nurse’s station where a printout awaited our colleague who took the piece of paper and made calls to the specialist’s office, the specialist’s medical group, and his own insurance group to secure and confirm the appointment; so much for efficiency.
Health Care likes to think that it is a totally unique industry and that you have to “make your bones” only in that space in order to have credibility and expertise but disconnected and incomplete processes like the one described here are the very kind of thing banks, brokerages, asset managers and insurance companies have successfully attacked for years. We would argue that the Health Care Industry can and should embrace and learn from Financial Services.
The areas where the industries can share knowledge, expertise, and capabilities include:
- Transaction Processing
- End-to-End (Straight Through Processing)
- Data Security
- Cost Containment
- Portfolio Analysis
- Fiduciary Duty
Transaction Processing – Financial Service organizations process a high volume of transactions (and transaction types) per day – requiring a high degree of accuracy while meeting tight daily deadlines. Financial Services had developed workflow management and optimization procedures to help insure processing efficiency. These procedures are essentially content-independent, while the large number of transactions (in both industries) requires constant attention to detail in both processing and training – a clear opportunity for knowledge transfer.
End to End Processing – Closely related is the idea of End to End Processing, essentially treating a transaction as a highly automated continuous (“straight through”) process focused on quality, accuracy and smooth customer service. A particular point of emphasis is one-stop/step problem resolution. This area long practiced by Financial Services is just started to be explored by some of the more innovative Health Care providers and would have saved our colleague, the specialist, and at least three administrative centers time and money.
Data Security – There are intense requirements for customer/patient confidentiality in both industries. HIPPA requirements are similar in concept and application to Financial Privacy Policies followed by most Financial Services companies. The mindset is the same; procedures and training to implement industry regulations and norms (often from overlapping regulatory interests) regarding the creation, access to, and the long-term maintenance of sensitive data are transferable.
Cost Containment – The Financial Services Industry has been living through severe revenue and expense pressures – as has Health Care. The measures taken by Financial Services to contain costs over the past three years has given them significant expertise in wringing out expenses, streamlining operations and maximizing efficiency at every step of a process. Lessons learned can be shared and we would argue that Financial Services has the advantage.
Portfolio Analysis – a recent article in the New Yorker (“The Hot Spotters” Atul Guwande, Jan 24, 2011) outlined a new approach to analyzing the patterns that drive health care costs, an approach, interestingly enough, which developed from New York City’s Compstat approach to crime prevention. This type of data analysis and mining are fundamental strengths of the Financial Services industry. The industry’s deep experience in not only statistical models and complex mathematics but also knowing how to use that information to drive day-to-day and actions should be easily transferable and of great utility within Health Care.
Fiduciary Duty – Both industries have a primary duty to do the best for the clients/patients. Taking a look at control processes, risk management systems, and accountability models within Financial Services should provide some interesting baseline approaches for Health Care.
Technology – Here, Financial Services shines. It is constantly at the leading edge of technology and applying that technology to key operational functions like process management and improvement, risk management, financial management and controls and portfolio analytics. A major area of leadership is customer service – beyond efficiently handling normal interactions, Financial Services knows how to handle customers throughout their life cycle and has developed interesting techniques to get the right information to the customer at critical points of his life. This is a model that Health care could easily follow.
These are not the only areas where the long term goals of service industries participants are congruent. Much could be learned and outcomes improved if “Not Invented Here” were replaced by more dialogue, at every level.
Ken Morton and Randy Atkin are principals at Plexius Group. You can reach them at email@example.com and firstname.lastname@example.org.