This week I had a double whammy of healthcare value from the comfort of my desk when MATTER Chicago live-streamed their event “What Keeps Healthcare CEOs Up At Night.” In addition to participating online with 40 others and engaging on Twitter on the topic, I’m pretty sure that Accenture charges big bucks to healthcare organizations to present these findings from interviews with over 50 healthcare CEOs. I got great info, some online networking, and no traffic!
So what does keep healthcare CEOs up at night? It seems that there are differing levels of awareness regarding the health of one’s own organization, changes in population health, as well as changes in healthcare in general. Perhaps the only thing keeping them all up at night is the delicate balance in shifting to outcome and value based payments without disrupting today’s revenue streams. It’s a classic innovator’s dilemma, but nonetheless, interviews and research with over 50 healthcare CEOs have shown that only some are effectively straddling these two worlds. Michael Main, managing director at Accenture Strategy, walked the full-house crowd at Matter and 40 of us on the live stream through the research, looking at winners and losers as well as making a few predictions for how the change would happen.
According to presenter Michael Main and the Accenture team’s analysis, only 5 out of these 50 CEOs were actually successfully making the shift to value based care, and of the rest, only 15 were capable of making that shift.
To make the shift, Main identified some key criteria:
- The CEO must have a strong passion for what healthcare can be, not what it is today. He or she must have vision and be motivated to make his or her system the #1 or #2 in their area.
- The shift from volume to value needs to also include a shift back to volume but with the volume being serving a larger population base, not doing more to each patient. The only way to do this is to really understand a health system’s catchment area and the population. Main used the example of the 1,500 data points that Experian, the credit check company, has on each person and compared that to how few data points health systems have.
- Care must move from being physician-centered to patient centered, but there must be strong physician leaders on board.
Main also identified barriers to change today:
- Perverse incentives that reward for doing more to a patient rather than what’s actually best for the patient. Here, Main provided a couple of personal examples, including his father who was admitted to the hospital for 48 hours because of protocol when he would have been better at home waiting for test results.
- People being worried about their own jobs. Main mentioned working with a nurse’s union on a patient-centered medical home project. Everything was positive until they realized the model would require fewer nurses than first expected. Demonstrating the basic adage that you can’t get someone to believe in something if their own livelihood depends on them not believing it.
- Too much gray hair in the C-suite. Main believes that many hospital CEOs are too close to retirement to want to tackle the risk. They are looking to ride out the current fee for service world, and hand over the reins when the real change needs to be implemented. Most CEOs estimated the change will take another 7-10 years so they had time to wrap up their retirement packages. (Shades of physicians retiring around the deadlines for implementing electronic medical records.)
As you can imagine, there will be winners and losers in this new world of capitated and value-based payments. Basically, aside from the 20 CEOs that Main identified as either already changing or capable of it, the rest he felt were in the loser category. As care is pushed to the lowest cost delivery, hospitals could lose out if they don’t build integrated networks with primary care and urgent care in addition to emergency and inpatient. Smart CEOs are looking at consolidation by buying the best systems or smaller organizations instead of looking for bargains. They know that those bargain competitors will end up out of business. Winners will figure out how to incubate models that will cannibalize their own business rather that fending off upstarts who are looking to do it to them.
Winners will have the right leaders who can take a patient-centered approach: both in aggregate and for individuals. In aggregate, they will better understand the patient base they serve in their geography and they will look at treatments that are outcome-driven and patient centered as well as looking at treatments that will impact each individual rather than the standard protocols like what Main described with his father’s treatment.
The Accenture research definitely pointed to answers in the transformation. Unfortunately, it seems like a number of CEOs today aren’t even asking the right questions. And of course, as with every healthcare event for the next while, with the looming threat to repeal the ACA, there are even more questions we need to be asking.