The US Healthcare System – One Big Tax on the Economy – Beyond Costs and Operational Efficiencies – Innovation is Critical – Technology Helps.

 

It’s well known that the US Healthcare costs are skyrocketing. Estimates range from 15%-20% of US GDP – greater than any other developed nation in the world. Left unchecked, this will be a big burden that today largely falls on US employers and businesses. And these businesses have to pass on these costs to their customers, making them cost uncompetitive in an increasingly globalized world. I found the following recent articles very illuminating in describing the challenges in US Healthcare and the implications of globalization:

  1. The Big Idea: How to Solve the Cost Crisis in Health Care, Robert S. Kaplan and Michael E. Porter, Harvard Business Review, September 2011.
  2. The Risks and Reward of Health-Care Reform, Peter Orzag, Foreign Affairs, July/August 2011.
  3. How America Can Compete – Globalization and Unemployment, Michael Spence, Foreign Affairs, July/August 2011.

But the big question is what each of us can do individually, collectively in an organization, and in our ecosystem across organizations – nationally and globally.

On a recent weekend, on October 1, I attended a talk by Dr. Atul Gawande sponsored by the New Yorker magazine and IBM. This was preceded by an exclusive breakfast meeting with Atul. I was fortunate to be invited and I thank IBM for a very gracious invitation to this event hosted by Dr. Paul Grundy of IBM who is also President of Patient-Centered Primary Care Collaborative. At breakfast, I also got to spend some quality time with the publisher of the New Yorker and other doctors (all medical – not like the Poor Hungry Doctor (Ph. D.) kind, like yours truly!) who are all facing these challenges of the US Healthcare system.

During the breakfast event and the subsequent talk, much of the emphasis was on reducing costs and improving operational efficiencies in the US Healthcare system. Dr. Gawande was very effective in conveying his path breaking ideas on how checklists and coaching can greatly improve a surgeon’s performance and result in far better patient outcomes.

Dr. Gawande started with the premise that we all reach a plateau at one point or the other in our lives and careers. And as we push ourselves to become better at what we do, the marginal benefits of our efforts seem to be all for naught. So what can we do? How can we increase our operational efficiency? His recipe marries continuous learning with coaching.

I encourage everyone interested in this subject to read his recent article in the New Yorker and also his book on checklists. His book also covers other professions beyond surgeons including architects, athletes, etc. It stresses that in-addition to continuous learning throughout one’s life, a coach is an essential partner for continuous self-improvement in any profession particularly those that are knowledge based. This clearly includes mine – an Information Technology (IT) analyst and entrepreneur.

As IT professionals, our lives have become complex and is today’s harsh reality. We all have to do more with less as we all have less time and leaner budgets.  And yet we also have to do more with more as we are drowned in data, interruptions, and regulations.  This more or less is driving us nuts. Everything is escalating at a frantic rate and pace while margins continue to dwindle.  We are constantly challenged to improve every day operationally in what we do.

Part of the problem is IT itself. IT in some ways has caused this problem and I think IT is also part of the solution. I constantly ask myself these reflective questions: Is speed a virtue? Is Big Data really that useful? Is constant improvement always better?  I think the answer to these questions is the proverbial “Yes and No” which drives me further nuts. Being an engineer, I like the determinism of a precise unambiguous answer. I like the precision of checklists but clearly also appreciate the value of coaching! So it is Yes and No for me now on these philosophical issues.  

While IT has made a very positive impact on improving the operational efficiencies of healthcare, also required are process innovations (some IT-enables and others require business incentives). In fact, in response to a question from the audience, Atul gave an example of how a surgeon in his hospital was able to take a standard but lower cost surgical gauze and then cut it so that it would be better fit for purpose or tuned to task rather than using the more expensive pre-cut gauze. This adjusted process was then adopted by several surgeons in the hospital resulting in substantial savings in operational costs while improving patient outcomes. This was clearly a business process innovation!

But IT must itself be tuned to task and fit for purpose. In short IT must become Smarter. It’s what IBM calls Smarter Computing. With Watson and other related Smart IBM efforts and with fostering collaboration the healthcare ecosystem (Dr. Grundy’s efforts), IBM is providing the incentive and impetus needed to help address the challenges with the US Healthcare system. With events such as the one on Oct/1, IBM and its partners are providing the mentoring and coaching for everyone touched by the healthcare system!

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