The Creative Disruption of the Healthcare Business Model

Smart, connected consumer centric digital platforms offer the healthcare industry the opportunity to rethink strategic choices about value creation and realization.  For most of us, we have easily adapted to the disruption of the banking, airline, book, and music industries and have integrated smart, connected digital products into our daily lives.  Mitch Wasden, EdD, Chief Executive Officer of University of Missouri Health Care in a General Session of the Cerner Health Conference 2014 challenges healthcare to think differently about our use of technology.  Rather than “implementing” information technologies, he describes a technology enabled redesign of the healthcare business model.

In a recent interview with Maestro CEO Pam Arlotto, Mitch explained that he believes traditional healthcare performance improvement has been too incremental.  He said, “In healthcare, we take a process that requires 40 steps and improve it so it only takes 37 steps.”  According to Mitch, “We need more creative disruption.  While technology can impact innovation, we can’t just layer it in – that only adds complexity.  We need a more systemic approach to change – to conceive of more elegant ways to deliver value and then destroy our current system.  Transformation occurs through simplification, engaging patients and clinicians in new and different ways, getting down to the essence of the value.”  

Watch Mitch describe how his organization is working to create a culture of innovation and transformation:  http://www.youtube.com/watch?v=MttasLlDTWI.

ROI and Vendor Sales Strategies

Maestro Strategies has worked with numerous vendors over the years to measure and document return on investment (ROI) to support vendor and service company sales efforts. Our approach has focused on providing an objective, independent and analytical perspective on the value of the solution from the view of the healthcare customer – health system, clinician, financial executive, etc. Typically, we validate hypotheses developed in conjunction with the company, in a number of real-world customer settings and create a model that can be used to project quantitative and qualitative benefits for prospective customers. Much of our work has been focused on expanding the conversation to examine both financial return on investment as well as strategic and process value – tangible and intangible. As one would imagine, over the years we have seen products implemented that were not used by their customers, solutions implemented on top of broken processes, systems whose users resisted mandated components of the applications, and complex modules whose capabilities were only partially configured and deployed – along with products and services that drove significant value for their customers. However, in all cases, potential benefits of the solutions and ROI were not fully realized. The reasons were many – health systems implemented without redesigning processes, executive sponsors didn’t remove barriers, projects weren’t managed well, and oh yes, sometimes the products didn’t deliver promised results.

The transition from volume to value by the healthcare industry will change the rules for both solution companies and their customers. Features, functionality and demonstrations will no longer be enough to drive sales, industry consolidation will reduce the number of customers, and ultimately solutions companies that don’t produce value over the entire life cycle of their product or service (e.g. beyond sales to include implementation and support) will be replaced by those who drive value creation, realization and results. Many solutions companies are developing ROI and value realization measurement tools and methodologies. Maestro’s experience in working tells us that often solution companies and their healthcare provider clients have different goals for the relationship, different perspectives on the value question and different language in explaining benefits.

Presentation1 Different Definitions of Value

 A Joint Value Management Plan that maps out agreed upon initiatives, value targets, milestones and accountabilities is essential to drive successful adoption, use and value creation/realization. Sometimes separate initiatives are occurring in parallel with the implementation and attribution becomes challenging.  Maestro works with both the solutions provider and their client to define common definitions of value and ROI, validate actual realization, understand key levers and accountabilities that will ensure ongoing value.

White Paper — From the Playing Field to the Pressbox: The Strategic Role of the Chief Health Information Officer

Based on dozens of interviews with health systems across the US and additional research, this report looks at where CHIOs and their teams are headed amid tumultuous change in healthcare. Originally seen as the stewards of CPOE and Meaningful Use — and known as the Chief Medical Informatics Officer — the Chief Health Information Officer is now tasked with ambitious information technology initiatives spanning the health continuum, retail health and consumer engagement, and population health management. Historically, limited in its authority and with few resources for support, this emerging role is a key player who must collaborate with Chief Innovation Officers, Chief Transformation Officers, and CIOs to drive clinical integration, care coordination and value realization.

To download your copy of the white paper, click here:  From the Playing Field to the Press Box.

White Paper — From the Playing Field to the Pressbox: The Strategic Role of the Chief Health Information Officer (CHIO)

Based on dozens of interviews with health systems across the US and additional research, this report looks at where CHIOs and their teams are headed amid tumultuous change in healthcare. Originally seen as the stewards of CPOE and Meaningful Use — and known as the Chief Medical Informatics Officer — the Chief Health Information Officer is now tasked with ambitious information technology initiatives spanning the health continuum, retail health and consumer engagement, and population health management. Historically, limited in its authority and with few resources for support, this emerging role is a key player who must collaborate with Chief Innovation Officers, Chief Transformation Officers, and CIOs to drive clinical integration, care coordination and value realization.

To download your copy of the white paper, click here:  From the Playing Field to the Press Box.

Reduce Complexity and Deliver Value: Lean Business Intelligence & Analytics

Health executives have realized for a long time that future success is tied to the quality of their information.   Finance organizations have worked with costing, budgeting and financial decision support systems for years.  Supply chain executives have created reporting tools to manage inventory, distribution and cost.  Operations leaders have reported quality, productivity and performance improvement metrics.  Yet, as we move from fee-for-service to value based care, many are challenged with the terms Business Intelligence, Analytics and Population Health Management.  With hundreds of new vendors entering the marketplace and knocking on health system doors, we have moved to a new “wild, wild west” – one that can be very confusing. Most health systems already have an extensive array of capabilities around analytics including point systems (e.g., what their surgery system can report), multiple data repositories with duplicate but often conflicting information, and capabilities provided by existing core vendors. Additionally, there are oftentimes hundreds  of data analysts across the organization that are managing and massaging scorecards, gathering and interpreting data from multiple internal and external sources, and creating literally thousands of excel and other “one-off” analyses.  This creates a complex assortment of information for decision makers, and begs the question: “What is truth and where does it lie?”.  To further complicate the situation, the mergers, acquisitions and the rapid deployment of electronic health records and other advanced clinical systems in recent years have made the identification of real “knowledge” a continuing challenge. And the sad fact is that most organizations spend the majority of their time collecting data and very little time analyzing that data. As we move from volume to value, it will be critical that organizations have a way to quickly collect the data, dedicate a more thorough effort to understanding what the data means and then acting on the data to produce results.  In other words:  Organizations must become data-driven in the decision they make at both the strategic and operational level. What most health systems don’t have is a comprehensive plan for data. They lack organizational accountability for data management or a process for ensuring data integrity, standards for collecting, aggregating, normalizing and presenting the data, and governance approaches to reducing duplication, complexity or political arguments over control.   A Business Intelligence and Analytics Strategy can help address some of these challenges, and should begin with answers to four questions:

  • What are the important enterprise business drivers and priorities that information must support?
  • How are strategic and operational decision made today and what changes must occur to move to an information driven decision making process?
  • How will you launch an early stage data governance and stewardship process?
  • What leadership input is needed to oversee and coordinate Business Intelligence? What talent is currently available within the enterprise and what is needed? Is the function centralized, decentralized or a hybrid structure?

Then, and only then, can a strategy around architecture, tools, and technology be defined. Depending on the evolution of your enterprise strategy and the level of risk managed, the requirements and investment vary. Rather than adding further complexity through new layers of tools, technologies and systems, the development of an enterprise Business Intelligence Strategy can provide a short term (12-18 month) plan to ensure that overall gaps are identified, existing systems are leveraged, skills of existing analysts are utilized, decision making structures are fine-tuned, and additional tools are selected in a rational manner.

Evolution of Business Intelligence Requirements & Investment  Evolution of BI Requirements and Investment chart 2

Healthcare Governance: What Boards Need To Know (Part Two)

In the second of two presentations from the Center for Healthcare Governance on the topic of leadership decision making, Making Effective Decisions In Times of Uncertainty and Change: What Boards Need To Know (Part Two), Pam Arlotto and Susan Irby of Maestro Strategies apply the decision-making framework introduced in Part One to examples from the health care delivery system.

Focusing on two dimensions of the framework as applied in an emergency room setting – complex and chaotic decisions – readers will appreciate a new model that has important utility in today’s complex environment. Viewers will learn about the role of business intelligence, analytics and information in making decisions in a new way in a more hectic and complex environment laced with great uncertainty. Understand how information-driven decision making is different from the hierarchical, command-and-control models that we have used in the past – and is increasingly more appropriate for a transformed business model.

Access the presentation here.

Also be sure to view part one of this series — Making Effective Decisions In Times of Uncertainty and Change: What Boards Need To Know

Innovation that Sticks — Podcast Episode #24: Realizing the Value of Health IT

With all the focus on the implementation of health IT and meeting meaningful use, Pam Arlotto, Maestro’s President and CEO, suggests that organizations take a step back and realize ‘why’ they’re making the investment in health IT systems. She believes that innovation within healthcare needs to be holistic and systemic to manage new technologies so that value can be realized. (Episode #24 of an ongoing HIMSS podcast series.)

Click here and scroll to Episode #24 to listen to this complimentary podcast

 

Journey to High Value Healthcare: The Board’s Role in Clinical Transformation

As American health care delivery transitions to a value-based model, transformation leadership will be needed within each organization to create the health system of the future.

In Journey to High Value Healthcare: The Board’s Role in Clinical Transformation, author Pam Arlotto, President and CEO of Center affiliate member Maestro Strategies, provides a guide for boards and the health care C-Suite as they align strategies, decision-making tools, processes, information technology and people to build new organizational capacity for clinical transformation.

This publication defines the role of the board in overseeing this transition and explores the concept of an Information Technology (IT) Committee of the board. It also discusses meaningful use of electronic health records as part of the necessary foundation for accountability.

The author provides a snapshot of where the health care industry is today in implementing meaningful use of information technology. She also discusses eight strategies to help boards develop a clear plan and evaluate progress toward accountable meaningful use. Assessment questions are included to help boards critically examine their own institution’s progress.

This publication can be used as the basis of a board education session or strategic planning retreat that focuses on implementing IT and using health information to drive delivery of more accountable, value-based care. Boards can also use this publication to guide discussion of how they can best oversee information technology resource allocation and implementation.

published by The American Healthcare Association’s Center for Healthcare Governance

To download a copy of the white paper, click here.

Two Canoes … and Four ‘I’s

Change: No two healthcare provider organizations experience it the same way. Some actively pursue development of clinically integrated networks and accountable care organizations, others double down on traditional healthcare practices. Many are paralyzed, not knowing what to do or how. The transition from volume to value has been described as “stepping from one canoe to another midstream.” Although the analogy clearly depicts the challenge, it doesn’t instruct healthcare executives how to successfully execute the step without falling in. The American Hospital Association has tackled this task by publishing a series of white papers describing the journey as moving from “first curve” to “second curve” healthcare. The most recent, Your Hospital’s Path to the Second Curve: Integration and Transformation (January 2014), provides 10 strategies, necessary organizational capabilities and potential paths for hospitals. It depicts a number of case study organizations that are actively “living in the gap” between volume and value, and describes various integrated delivery programs to improve care coordination, physician alignment, performance measures and patient outcomes. While most volume to value publications rarely address healthcare information technology, except to say “implement EHRs” as part of clinically integrated care, this white paper takes it a step further. It encourages health systems to “conduct information exchange” and use information systems to:

  • Implement electronic health records
  • Enhance health information system interoperability across sites of care
  • Use existing data to facilitate analysis and reporting for process improvement and behavioral change
  • Use predictive modeling for population health management
  • Use data analytics for care management and operational management

Yet, many health systems and providers are challenged to successfully execute these recommendations. In fact, we find the operational, clinical, financial, technological and legal unintended consequences of HITECH often undermine the potential benefit. Many clinicians still ask “why” and have not incorporated needed workflow changes.   Healthcare executives question what value they have received for their multimillion-dollar investments. To a certain degree, the focus on Meaningful Use and its incentives has been the “technology tail wagging the dog.” Rather than leading with the business strategy we wanted these systems to enable, the healthcare industry focused on the technology. So while healthcare strategists are actively living in the gap and planning the next step on the journey to value, clinicians and other users of information technology are struggling with the day-to-day impact these systems have left on care delivery. Rather than rushing to select health information exchange applications, layer on business intelligence systems and purchase care management systems, we suggest an alternative approach focused on value creation and realization. It starts with one letter – “i.” My friend Praveen Chopra, Executive Vice President and Chief Information Officer at Thomas Jefferson University and the TJU Hospital System, started his career outside healthcare in retail and supply chain. “Rather than focusing on technology, the healthcare industry should focus on three “i’s” – information, integration and innovation,” Chopra says. At Maestro Strategies, we also want to focus on one more “i” – insight. We believe that a focus on these four words will help drive more value as we take the next steps on our joint transformation journey. Our “i-men” characters help us tell the “why,” and with this new website, we plan to bring our clients and friends specific strategies and tactics to help execute on the change and close the gap between the two canoes.

Rethinking Return on Investment

Rethinking Return on Investment: The Challenge of Accountable Meaningful Use

by Pam Arlotto

Contributors: Susan Irby, Lori Bishop, Marla Crockett, Bryant Hoyal, Kevin Martin, Vicki Miller

Rethinking Return on Investment offers a timely exploration of the value achieved through the Meaningful Use of electronic health records and other components of the HITECH legislation. The authors provide a look back at how ROI of health IT has typically been measured and explore how Meaningful Use regulations are driving healthcare organizations to adopt a value-based purchasing model — thus challenging readers to rethink how they define the ROI of health IT. The authors examine Meaningful Use within a three-stage Value Management Framework: value identification, value realization and value optimization. To assist organizations in evaluating how to drive value out of an investment in people, processes and technology, the book includes numerous value maps for measuring a project’s benefits, such as quality improvement, care management and cost reduction. The authors conclude by setting the stage for how the current impact of Accountable Meaningful Use will contine to transform the healthcare delivery system for years to come.

Available through HIMSS, order here.

Don’t miss the forerunner — Beyond Return on Investment: Expanding the Value of Healthcare Information Technology — which provides lessons learned from healthcare IT adoption on how to drive value realization, look at healthcare IT as a strategic asset, achieve value from clinical systems, manage healthcare IT as an investment, analyze ROI to make the case for investment, and governing transformation toward integrated decision making