A recent post over at the Harvard Business Review (HBR) blog really piqued my interest. It illustrated the similarities between the today’s health care model and examples of “disruptive business models.”
Due to the policy drivers of new government reforms, healthcare CEOs and boards across the country are being forced to reinvent their organizations. How has this been done in the past in other industries? Are there examples we can point to as “disruptive?”
The author submits that many of the challenges that healthcare leaders will soon face — falling prices (e.g. Blu-Ray players originally selling for hundreds of dollars now selling for $49); disruptive technologies (e.g. digital photography replacing film); competition (e.g. iPhones excelling in the market made by Blackberry); and totally new business models (e.g. Netflix mail order and streaming movie rentals versus the Blockbuster storefront) — have already been seen in other industries. So why should we not see this same type of transformation in the health care industry?
The current healthcare model is being turned on its head — from decades of focusing on emergency and acute care episodes, payment reimbursements based on fee-for-service (pay for volume versus quality) and an emphasis on high volume or utilization of services — in favor of a future model where the most successful organizations are able to reduce utilization, manage population health and engage patients to take ownership in their own health care, or the so-called Triple Aim.
HBR’s research has found three core elements that are essential to successful organizational transformation: (1) importing new knowledge, (2) strategically deploying existing skills, and (3) disseminating leadership across the ranks.
The health care landscape is changing. Clearly, the organizations that will prosper in this environment of disruptive and tremendous change are those that build a resilient and adaptive culture in which: change is welcomed and sought out (rather than resisted), experimentation and innovation are driving forces (rather than maintaining the status quo), and staff are empowered to make key decisions without relying on approval from senior leaders. In essence, once the course is charted, anyone can take the helm of the ship as long as they maintain the ship on its course.
Reconsider the examples presented earlier: business models which clearly disrupted the status quo leading to incredible success. Why should we not expect this same type of transformation to occur in the health care industry? Well, here’s the news: it’s beginning to happen now, and with many health care organizations across the country experimenting with different and innovative ways to design, deliver, measure, and pay for health care.
The post concludes that health care leaders would be unwise to repeat the mistakes of the past, continuing to operate in the status quo, and also foolish to overlook disruptive strategies and solutions that have already been developed, piloted and shown to effective elsewhere. I agree. The course is set. Change is a’ coming…