It’s the $3.3 trillion question: how can we create a U.S. healthcare system that offers quality, patient care that is economically responsible? This is a question that people in the healthcare system have been asking for years.
Tweet: Dimensional Insight Book Club: Reverse Innovation in Healthcare
Researchers Vijay Govindarajan and Ravi Ramamurti think they have a solution, and it lies overseas. For the past six weeks, the Dimensional Insight Book Club has been reading Reverse Innovation in Healthcare: How to Make Value-Based Delivery Work, exploring Indian healthcare practices and how their principles could be adopted by the United States. Let’s hear what our panel has to say.
Meet our panel
Our book club panel consists of Nishtha Adroja, healthcare applications consultant; George Dealy, vice president of healthcare applications; Julie Lamoureux, senior healthcare consultant; and Kathy Sucich, senior content and communications manager.
Q: What was your biggest takeaway from Reverse Innovation in Healthcare?
Nishtha: I come from India, which is a developing country, unlike the U.S., which is a developed nation. As children, we have always seen this difference through a skewed lens, believing the myth that all innovation happens only in the technologically superior and more developed countries in the world. But this book shatters this myth for me in a very eye-opening way. The fact that even developed nations have a lot to learn from the innovation that is done in less developed countries is radical in nature. This book addresses it excellently with regards to the healthcare system. I think more than the steps or areas of reverse innovation mentioned in the book, the mentality and attitude towards reverse innovation is the key game-changer. Once the U.S. or other developed nations believe that there are lessons to be learned from developing nations, the adoption of the innovative practices is much easier.
George: Despite what we may think in the U.S., significant and simultaneous improvements in quality, cost, access and patient experience are all not only possible, but they are being realized in some of the least likely places in the world – such as India, including densely populated cities and remote rural areas.
Julie: I should start by saying I am still unconvinced the model is applicable in its entirety in America in the near future. My biggest takeaway is that at least some parts of the model can be applied to modify the focus of healthcare in America and that this model is not coming from the traditional source of ideas. Traditionally, America has relied on payor incentives to shape healthcare. This new model relies on patient-focused values, quality and having healthcare providers/staff work at the top of their competencies.
Kathy: A lot of people in U.S. healthcare feel as though we are “stuck” with the system as it is and the high costs associated with healthcare. However, other healthcare organizations across the globe are doing things differently, reducing costs but still yielding high quality results. My main takeaway is that change is possible if we are open and committed to it.
Q: Which idea in the book do you think could most realistically be applied to healthcare in the U.S.?
George: Any and all of them could be realistically applied. The challenge lies in the status quo and accompanying counterincentives of the current payment system. The book presents compelling evidence that differences in factors such as salaries and cost of supplies (between the U.S. and the Indian “exemplars”) don’t totally account for variations in spending, and that outcomes are every bit as good.
Kathy: One of the ideas the authors discuss is the concept of “task-shifting” or ensuring that tasks are being completed by those whose skills best match the task at hand. At Narayana Health in India, that means higher-skilled surgeons do the most critical parts of an operation, while junior surgeons perform less critical parts. Family members provide a large part of post-surgical care instead of round-the-clock nurses. And the hospital works hard to reduce turnaround time and have operating rooms continually running. While I don’t think healthcare in the U.S. could work in exactly the same fashion, there are some important takeaways, especially in an age where physician burnout is so common and there is a physician shortage. Have physicians focus on patient care, not data entry. Focus on areas of wasted time in the hospital, such as turnaround time to improve costs.
Julie: I think most of the ideas will eventually be applied to American healthcare except for the idea of “production line medicine.” I don’t know a lot of patients here who would accept having one provider start their surgery, one performs the most difficult part, and one final one finish the surgery. It would require a massive change in the culture of the consumers of healthcare. But a shift from therapeutic medicine to preventive medicine, a focus on quality outcomes, and a reduction in costs are all changes that the population would be ready to understand and willing to go through.
Nishtha: I think the Hub & Spoke model can be most realistically applied to healthcare in U.S. The American population is large, and is scattered across the huge area of the country. The Hub & Spoke model could improve access to healthcare to all people, and would also be able to lower costs by centralizing the costlier equipment while still maintaining a medical presence virtually everywhere. In my opinion, this model is the least disruptive of all the methods mentioned in the book, and hence can be most easily implemented. Every other method needs disruption either at a costing level, at insurance provider level, or needs a very charitable donor who is ready to re-invest profits into healthcare. But the hub and spoke model – that’s just common business sense and can be easily done.
Q: What needs to change in U.S. healthcare so providers can better integrate the principles discussed by the authors and improve patient outcomes?
Julie: On the consumer side, there needs to be a change in the focus of control. Patients need to understand the role they can play (need to play) in their own health and in the health of their families and community instead of relying on the decision role of the physicians and nurses. That is well described in the book. For centuries, patients have entirely relied on the expertise of healthcare workers to make decisions about their health, having the locus of control placed on “Others.” If the model is to be applied, the locus of control needs to shift to “Self.” On the provider side, the change has already started. At the risk of imploding if nothing was done, payors have started a restructure of the payment system. Bundling of payments and focus on quality by payors is forcing providers to shift their focus from the profitability of pay-per-act system to cost-conscious patient-centered care. This change is what reverse innovation is about. Finding ways in places where means are limited to make every act more effective and valuable.
Kathy: I think everyone needs to be more open to the concept of innovation. Providers need to be more open to taking risks on new ways of doing things. Payers need to be willing to reimburse in areas of innovation. Patients need to be supportive of providers who are doing things differently.
Nishtha: Like I mentioned earlier, I think more than the steps or areas of reverse innovation mentioned in the book, the mentality and attitude towards reverse innovation is the key game-changer. Once the U.S. or other developed nations believe there are lessons to be learned from developing nations, the adoption of the innovative practices is much easier. This is not only true for individuals or organizations, but even for countries. Only with acceptance can a country adopt a new principle or methodology that improves people’s lives.
George: Incentives. It’s pretty simple, but hard to do because changing them radically will “disrupt the establishment” and lead to much of the industry collapsing on itself. Like “big banks,” healthcare is “too big to fail.”
Q: What do you think the future holds for the U.S. healthcare industry?
Nishtha: I truly believe that eventually, the rising insurance and medical costs will bring the healthcare industry to a grinding halt. Today it is cheaper to fly to places like India, get surgeries done, get post-operative care done, and fly back, rather than getting it all done in United States (even with insurance). Small changes will be applied by pioneers in the medical and healthcare industry, and gradually and steadily, the healthcare industry will be brought to a tipping point. From this tipping point, it will radically transform into a system that places more focus on cost-effective, high-quality medical care that is available to all people easily.
Julie: The near future looks chaotic. Every transition period is relatively chaotic but the speed of adjustment of the providers to the new payment model, as well as the demands imposed on them to reach high levels of quality, will cause a lot of burn-out and stimulate early retirement. I believe this will generate an increased demand for mid-level providers and new job descriptions (like health coaches described in the book), as well as attract a new type of practitioner (not lured by the glitter of profitability) to answer to the demand for healthcare. One indicator of that is that many doctors I know discourage their children and family to get into the healthcare field unless they are answering “the call.” In the long run, all these changes might bring us closer to the model described in the book.
George: Most likely discontinuous change and counter-intuitive disruption. I rode my first “shared electric scooter in San Diego this past week. I couldn’t understand – for the life of me — how expensive scooters scattered willy-nilly across a city made any sense whatsoever. It only took one ride to understand not just why it made sense, but also to become totally “hooked” on it as an alternative to walking, cabs (including Uber/Lyft) or even bicycles for getting around an urban area. The joint venture formed by Amazon, Berkshire Hathaway and JP Morgan coupled with — and encouraging — technology and business innovations will likely pave the way for a similar type of disruption. The taxicab industry provides another instructive example: Overregulation led to a moribund business environment/status quo that included horrendous customer service, economic distortion (such as the inflated value of “taxi medallions”), and opportunities for monopolistic behavior leading in turn to well-intended but counterproductive regulation, and finally barriers to innovation. (In New York, the regulations still carry the name “hackney” from the era of horse drawn carriages. So much for innovation.) But what had been built up over the course of a hundred-plus years took only a few years to all but collapse once innovation was allowed to flourish.
Kathy: If we don’t do something soon, healthcare is going to reach a breaking point. It’s just too expensive, especially with baby boomers who are aging and will be using the system more in the next several decades. There are a lot of technologies and new ways of thinking that have the potential to make a big impact in healthcare. We just have to be open to change and making sure that we are supporting entrepreneurs and others who are bringing new ideas to the table.
Q: If you could recommend someone to read this book, who would it be and why?
Kathy: I think I’d most like people on the payer side of the equation to read this book. We can talk about new ideas all we want, but if insurance companies and Medicare/Medicaid are not willing to pay for them, these ideas will go dead in the water.
Nishtha: I recommend that everyone at the managerial level up to CXO level should read this book. The teachings of this book are important and could change the very nature of healthcare in America. Dimensional Insight isn’t about just creating a product that creates charts and graphs for hospitals. We do it so that hospitals can have all the critical information that they need, in the format that they need it, at the instant they need it. This saves them time and money. We are in the money-saving business for hospitals, and this book advocates methods by which hospitals can save more money. We should be at the forefront of this modernization initiative in any way possible.
George: Anyone involved in healthcare, including providers, payers/insurers, employers, consumers and caregivers would benefit from this perspective. It will take a consumer-led revolution to truly change things. Employers (the primary intermediary between providers/payers and consumers) have tried, but it will likely take the consumer to make a real difference. And a big part of that will come from consumers taking more responsibility for their own health — by being informed, focusing on wellness and treating care providers as partners rather than “grand wizards” or “high priests.”
Julie: I would recommend this book to all healthcare practitioners who are concerned that their work and their focus has shifted too far from helping patients in need to be profitable. I would also give it to any college student in the healthcare field. If there has to be innovation, it should take root in the new generation.
Thanks, everyone! For our next selection, we will be reading The Motivation Myth: How High Achievers Really Set Themselves Up to Win. How do high achievers accomplish their goals? Is there a secret to success? In this book, Jeff Haden challenges the definition of “motivation” and outlines the lifecycle of goal-setting. If you want to read with us, you have until November 29. Also, let us know if you would like to be on our book panel or if you have any suggestions for future reads!
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