business model

“New & Improved” Isn’t Innovative

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(AP) Redmond Washington.  After a much heralded launch, the buzz around Microsoft’s launch of Windows 8.0 is centered on the fact that when the computer crashes that users will no longer see the blue screen of death.  Instead, users will now see a friendly screen requesting that they restart their systems.

“Which is why we have decided to close the company at the start of 2012,” said CMO Droid Nelson.  “I mean when you spend two hundred million dollars just to market 8.0 and the only chatter is about the crash screen, the time has come.  We have not offered anything of interest to early adopters since 1997.  After all, what are we supposed to do?  If we continue on at this rate sooner or later we will hold a news conference for Windows 17.0 and Office 2024 and nobody will care.”

“How many times can we put a new ribbon around the same old software?  It is not like we can make it run any faster or any easier to navigate.  And Office is still Office.  When was the last time we added anything to that suite?  Most of our customers already cannot use half of the features we built, why should we keep building until we get that figure up to eighty percent?”

“The innovation train left the station around the time Starbucks came out with their half-caf-decaf with a double shot.  We made ourselves irrelevant.  Hell, I use an iPad and Google Docs.”

Can you name what Microsoft launched the last time you were willing to tailgate to be the first one to own it?  Nobody can.

Can you name the last time your customers were willing to tailgate to be the first one to purchase your firm’s newest offering?  Didn’t think so.

The thing to remember about new and improved is that it isn’t either.  If it was so brand spanking new, you wouldn’t have to tell anyone.

New is not a feature.

Improved is not a feature.

When Apple launched the first iPod their pitch was something along the lines of every song you every wanted to listen to in this little box.

Customers stand in line for innovation.  Is there a line outside your door?

EHR: I may have found a shortcut

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How able are you to conjure up your most brainless moment—don’t worry, we aren’t on the EHR part yet.

As I was running in San Diego I was passed by a harem of seals—Navy Seals.  Some of them were in better shape than me, I couldn’t judge the fitness of the others as they ran by me too fast.  That got me thinking.  For those who having been regular readers, you’ll know this is where I have a tendency to drive myself over a cliff.

Seeing the Seals took me back to my wistful days as a cadet at the US Air Force Academy.  Coincidentally, my hair looked then a lot like it looks now.  One of the many pastimes they tossed our way for their amusement and our survival was orienteering; sort of map reading on steroids.  One night they took us to the foothills of the Colorado Rockies, paired off the doolies, gave us a set of map coordinates, a compass, map, and flashlight.  The way training worked, those who proved to be the fastest at mastering skills fared better than those who weren’t.  Hence, there was plenty of incentive to outperform everyone; including getting yourself to believe you could do things better than you could, sort of a confidence building program.

We were deposited in a large copse—I’ve always liked that word—of trees—I don’t know, but it seems adding trees to the phrase is somewhat redundant.  We had to orient ourselves and then figure out how to get to five consecutive locations.  The sun had long since set as we made our way through the treed canyon and back up a steep ravine.  After some moments of searching we found the marker indicating we were at point Able.  The group started to examine the information that would direct our journey to point Bravo.

While they honed their skills, I was examining the map, taking some bearings with the compass, and trying to judge the terrain via the moonlight.  My roommate, a tall lanky kid from Dothan, Alabama asked why I didn’t appear to be helping.

“Look at this,” I replied.  “Do you see that light over there, just to the right of that bluff?  I think I’ve found us a shortcut.”

“What about it?”  Asked Dothan.

“If my calculations are correct, that light is about here,” I said and showed them on my map.  “It can’t be more than a hundred yards from point Delta.”

“So?”

“So why go from Alpha to Bravo to Charlie to Delta, if we can go right to Delta from here?  That will knock off at least an hour.”  I had to show my calculations a few times to turn them into believers, but one by one they came aboard.  The moon disappeared behind an entire bank of thunderheads.  We were uniformly upbeat as we made our way in the growing blackness through the national forest.  Unlike the way most rains begin, that night the sky seemed to open upon us like a burst paper bag.

“Get our bearing,” I instructed Dothan.  As it was my idea, I was now the de facto leader.  As we were in a gully, getting our bearings required Dothan to climb a large evergreen.

“I don’t see it,” he hollered over the wind-swept rain squalls.  I scurried up, certain that he was either an idiot or blind.

“Do you see the light?”  They asked me.  I looked again.  Checked my map.  Checked my compass.  “It has to be there,” I yelled.

A voice floated up to me.  To me I thought it probably sounded a lot like the voice Moses heard from God as he was building the Ark.  (Just checking to see if you’re paying attention.)  “What if they turned off the light?”

I almost fell out of the tree like an apple testing the laws of gravity.  What if someone had turned off the light?  There was no ‘what if’ to consider.  That is exactly what happened.  Some inconsiderate homeowner had turned off their porch light and left us stranded.

Fast forward.  We were lost, real lost.  We didn’t finish last, but we did earn extra exercise the next day, penalized for being creative.  Who’da thunk it?

Short cuts.  When they work, you’re a headliner.  When they fail, chances are you’re also a headliner—writing the wrong kind of headlines.  I hate being redundant, but with EHR we may be dealing with the single largest expenditure in your organization.  It will cost twice as much to do it over as it will to do it right.  If you haven’t done this before—I won’t embarrass anyone by asking for a show of hands—every extra day you add to the planning process will come back to you several fold.  There may be short cuts you can take, but planning should not be one of them.  How much should we plan?  How long should it take?  Who should participate?  We will look at each of those questions in some detail.  For now, let’s answer those three questions with; more than you think, longer than you’ve planned for it to take, and different skills than you’re currently using.saint

Social Media: The Elephant in the Bored Room

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Pardon the idiom, and yes, the misspelling was deliberate.  You may want to grab a sandwich, this is a long read.

For the longest time it has occurred to me that most companies find themselves in a state of what I like to label Permanent Whitewater. As they careen through the rapids, it is anybody’s guess as to whether they will capsize.  And the philistines they have appointed as commissioners would be more appropriately described as Ommissioners, as they have omitted themselves from understanding the world and leading their charges.

Now, what does that have to do with anything?  Thanks for asking.

For those of you who can find Vietnam on the map, you will recall the great turnip boycott of the nineteen seventies—I know they boycotted grapes, but I like grapes and do not like turnip, so I choose to have my own protest.  Anyway, this boycott worked, and as a result, the working conditions for migrant workers improved albeit only modestly.

And here is the kicker.  An entire industry was brought to its knees.  That is not the surprising part.  The surprising part is that all of this change was brought about at a time when there were three television channels and when people actually subscribed to newspapers.

From where I sit, social media can be divided into two camps, those who have not slept since the launch of Google+, and the far larger camp of those who have not lost a minute of sleep.  Businesses, for the most part are well entrenched in the latter group.

Part of the reason why businesses are slow to adopt social media can be attributed to their lack of belief that social media matters or can impact their business one way or the other.  And frankly, I think that has a lot to do with why our economy continues to rejoice in its malaise.

So, how to those of us in the first camp get those in the second camp to see the world our way, how do we get them to jump head-first into social media.  The answer is simple.  We need to create our own turnip debacle.

They say it cannot be done, so let us show them.  The one thing that would get companies to embrace quickly and unashamedly social media would be if there was one less company.

Companies, big ones, fat ones, firms that climb on rocks—feel free to finish the tune without my help have the following issues, they think they:

–       control their market

–       own their customers

–       are managing their customers

Companies are wrong about those three assumptions and the use of social media can and will prove this.  I would ask for a volunteer, but that would take too long.

If ABC, CBS, and NBC were able through their coverage of the grape boycott, bring about change to an entire industry, imagine with me what impact a committed bunch of savvy social media users could do to a single firm.

Here is what I propose.  Let us pick one firm.  The characteristics of this firm should be that it is well known and not well liked—this way we can argue that we acted on behalf of a greater good.  It should also be a firm associated with technology, a firm that ought to at least be able to spell social media.  If I were asked which firm I would choose I would pick a firm in some aspect of telecommunications, say a firm like Comcast or Verizon.

Now, the idea of our little social project will be to provide a heads-up to all of the other companies about the start date of our little social media experiment.  Let’s tentatively agree on the first of November unless there is a game on television I want to watch.

The goal of the project is to demonstrate that the bourgeois, the working class, with its harmless set of social media tools, can create affect enough of a disruption to an organization to make it sit up and take notice, or to disappear.

I am sure you remember the YouTube video of the Comcast technician that fell asleep on a customer’s couch.  It went viral, but Comcast did not, and that was simply a single posting by a single customer.  What would happen if the social media mavens decided to use the tools at their disposal and concentrate their efforts at or against a single firm?

Crowdsourcing 101.

I think the end result of such an effort would have a significant impact.  The impact could easily bring about more fundamental change as to how firms view and use social media than was brought about by the grape boycott.

Sometimes something has to be sacrificed on behalf of the greater good.  Although a rising tide lifts all boats, but it can ruin your day if your firm is the one chained to the pier.

What are your ideas?

“Improved” never sold anything.

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(AP) Redmond Washington.  After a much heralded launch, the buzz around Microsoft’s launch of Windows 8.0 is centered on the fact that when the computer crashes that users will no longer see the blue screen of death.  Instead, users will now see a friendly screen requesting that they restart their systems.

“Which is why we have decided to close the company at the start of 2012,” said CMO Droid Nelson.  “I mean when you spend two hundred million dollars just to market 8.0 and the only chatter is about the crash screen, the time has come.  We have not offered anything of interest to early adopters since 1997.  After all, what are we supposed to do?  If we continue on at this rate sooner or later we will hold a news conference for Windows 17.0 and Office 2024 and nobody will care.

How many times can we put a new ribbon around the same old software?  It is not like we can make it run any faster or any easier to navigate.  And Office is still Office.  When was the last time we added anything to that suite?  Most of our customers already cannot use half of the features we built, why should we keep building until we get that figure up to eighty percent?

The innovation train left the station around the time Starbucks came out with their half-caf-decaf with a double shot.  We made ourselves irrelevant.  Hell, I use an iPad and Google Docs.”

Can you name what Microsoft launched the last time you were willing to tailgate to be the first one to own it?  Nobody can.

Can you name the last time your customers were willing to tailgate to be the first one to purchase your firm’s newest offering?  Didn’t think so.

The thing to remember about new and improved is that it isn’t either.  If it was so brand spanking new, you wouldn’t have to tell anyone.

New is not a feature.

Improved is not a feature.

When Apple launched the first iPod their pitch was something along the lines of every song you every wanted to listen to in this little box.

Customers stand in line for innovation.  Is there a line outside your door?

Business Innovation: Hamsters Only Bounce Once

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Hamsters only bounce once—next time I will read the fine print.  This was the lesson I learned today from my thirteen-year-old son as he tried to hold my nine-year-old son’s hamster—I keep wanting to insert a ‘p’ after the ‘m’, but my inability to spell will not affect the hapmster’s condition.

So, from hamsters to the Soviets—those too young to remember the Soviets, Google it.  I am reading a book about the latter years of Stalin’s reign.  In the book Nikita Khrushchev, while dedicating a school, reportedly stated the USSR needed highly productive, healthy scientists, engineers, and gold-medal athletes.

The implication of Nikita’s pronouncement was the country did not need any poets, philosophers, and priests.  It needed productivity that could be measured and quantified; success that could be timed with a stopwatch.

Perhaps it is the cynic in me, but those few paragraphs reminded me immediately of how individual American corporations are run.  After all, is not that what our firms do?  We measure and quantify and time.  Whether it is earnings per share or inventory or supply change.  We tend to think and act that business success is all about the numbers, that if we study them hard enough, we will divine how to move forward.

How well is that working?  The hamster wheel is no longer spinning.  How many new ideas have resulted from the approach of quantification?  Every company can measure.  It just so happens what they have been measuring is declining revenues.

Things that do not measure well include strategy and innovation.  Firms cannot increase innovation by twenty percent or execute strategy fifteen seconds faster.  Perhaps there is merit in placing less emphasis on quantitative efforts.  Is it possible that a more qualitative focus would improve the quantitative results?

Who Killed CRM?

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I once said to my client in Madrid “Well, she’s no rocket scientist,” commenting on the performance of one of his team members.  Turns out I was wrong—she had a PhD in astrophysics.

Anyway.  Have you noticed that too many people view fixing business problems as rocket surgery?  These are the same people who confuse motion with movement.  These are the same people who come to work each day and work on what was happening yesterday.  Do you ever wonder who is working on what needs to be happening tomorrow?

If your own employees view going to work and company functions with less enthusiasm than they would have going to an all day Celine Dion concert in the dead of winter, is it any wonder that your customers are running away in droves?

Businesses begin to die the day they open their front door—ask GM.  What then is the secret sauce to remaining viable?

As different as businesses are from one another, the common factor among all businesses is one thing—customers.  Hospitals, banks, manufacturers, software companies all have the same mission statement, one they do not publish—We do stuff for money.  Guess who has the money—customers.  Businesses only remain in business by being able to one thing; getting those with the money to give their money to them.

Without OPM—Other People’s Money—there is no business.  We do stuff for money.  If that is true, should not every activity, every plan, every process, and every investment somehow contribute, somehow add value to the transaction of transferring OPM from them to you?  Are activities that do not add value to that transaction wasteful, redundant, or unnecessary?

Every business decision, every strategy, every acquisition, every hire should be evaluated in terms of whether or not they increase the firm’s ability to increase the amount OPM captured.

If this idea sounds too simple, that is because it is.  There is nothing complex about focusing on the customer.  But you would never know that from scanning the internet job boards.  Companies are looking to hire for a cornucopia of customer related positions; CRM, CEM, customer for life, customer first.

What do these companies need?  Business intelligence, a data warehouse, a chief marketing officer?  Hardly.  Marketing keeps trying to figure out ‘how do we get customers to pay attention to us?’  What they should be asking is “what do we have to do to pay attention to them?’

Most company executives would not know a customer if they sat next to one on the bus.  They may know about the customer; income, age, social stratification, number of children, but they do not know why they are a customer or why they were a customer.

Customers leave all of the time.  They leave to find a company that either treats them better, or one with which they do not have to interact.  Welcome to the land of customer initiated virtual RFPs.  Instead of companies deciding to whom they sell the stuff or their services, customers decide from whom they are going to buy.

CRM is dead and companies killed it.  Customers know when someone is trying to manage them and they do not like it.  Now customers are managing the sellers and they do not need multimillion dollar systems to do it.

If you are interested, this link goes to a presentation I have given on CRM:Dead or Dying?  Feel free to use it or to leave a copy on the desk of your CEO.

http://www.slideshare.net/paulroemer/crm-dead-or-dying

Is your company ADHD positive?

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It ain’t easy always being the one dumb enough to write the words on which others dread to tread.  “Get Paul to write it.”

A lot of companies need to go to the doctor.  Whether the firm suffers from malaise, ADHD, or depression is not really important.  Companies do not get ill, companies do not suffer.  Their employees do, get ill that is; companies merely serve as incubators of the malaise and facilitate it.

We have all seen it.  Remember Sally?  Her office was the down the hall, third door on the left.  Crayon drawings from her granddaughter hung from her credenza.  An imitation Tiffany desk lamp with a cracked shade was to the left of her monitor, and a half-dead philodendron in a clay pot grew through the slats of the Venetian blind.

Sally was always the first one in the office.  She was the person who cleaned the coffee pot and made the first pot of the day.  She filled her ceramic mug, the same one she had used for twelve years and using her pinkie finger like a swizzle stick stirred in two packets of artificial sweetener.

Each year Sally organized the Christmas party and she was the person who let everyone know when it was somebody’s birthday and she was the person who sent the flowers from the company if someone was ill or had a baby.  To many employees, Sally was the human face of the company.

Sally was let go, was downsized, was laid off, was fired.  Some guy named Bob now sits in Sally’s office.  It will never be Bob’s office.  Today it is as though Sally never even existed.  Her perfume no longer drifts down the hall.  Bob let the philodendron die.  The drawings are long gone along with the imitation Tiffany lamp with the cracked shade.

If you are the first one in the office you stand in the snack room trying to figure out who is going to clean the coffee pot.  Rather than cleaning it yourself, you have learned to make do with a cup of some sort of chamomile tea that smells of lavender.  You no longer know whose birthday it is or who just had a baby.

The company has changed and everybody went along with it.  First Sally, then Mr. Withers who worked in tax.  Two people in purchasing left on the same day.  It feels like there should have been a wake for them or like you should be wearing a black arm band.  You cannot remember the last time anyone went to lunch together.  You have seen the malaise and the malaise is you and him and her.

Companies spend millions of dollars trying to figure out how to boost earnings per share, how to improve productivity, or customer satisfaction.  They hire firms like BCG and Bain thinking maybe the answers are buried in the two hundred thousand dollar white paper they never read or in the multi-million dollar supply chain project or the hundred million dollar electronic health records system.  The end result—mistakes are made faster because they have been automated.  During the process of automation, more people along with their half-dead philodendrons were voted off the island.

It is as though those people never existed.  The only difference between those who never existed and those they left behind is that those left behind have not yet figured out that they never did exist.  To many companies the people are not any more real than the laptops, and perhaps less valued.  Inventory: 35 accountants, 72 programmers, twelve hundred laptops, and six half-dead philodendrons.

One need not hire BCG or Bain to recognize the problem.  Look at the condition of the coffee pot sitting on the warm burner.  Look at the months of undelivered reports that are stacked outside of Sally’s office.  Look at the faces of those in the meeting with you or those who reluctantly came to the holiday party because they thought their boss was making a mental note of who did not attend.

Companies do not need a data warehouse or a business intelligence initiative to improve their performance.  People perform; data is nothing more than a collection of numbers.  People are what make data relevant. People are what make customers like a company or leave it.

Too many companies treat their employees as disposable and replaceable assets.  Customers will never see nor will they interact with the data warehouse.  They will assess the company based on their interactions with the employees; the receptionist, the person on the phone—the one paid the least, the one coached to smile while they talk, the one coached to get the customer off the phone as quickly as possible so they can get the next person in the queue off the phone as fast as possible.

These people did not break the company; the company broke the people.  The company created and sustained an environment of malaise and only the company can fix it.  The malaise will not improve by implementing casual Tuesdays, or by placing an employee suggestion box in the cafeteria.

Employees are a lot like customers—they are smart and they want to feel valued.  Wanna bet that there is a high correlation between customer satisfaction and employee retention?  If companies want their employees to instill an attitude in their employees such that the employees would be willing to die for the company, the first thing the company needs to do is to stop killing them.

July is “take your EHR strategy to lunch month”

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Several have written suggesting I toss my hat into the ring to serve as the EHR Strategy wonk or czar.  I was in the process of thinking it through when I was awakened from my fuegue state by a loud noise–my ego crashing to the floor.

Some have suggested that a camel is a horse designed by a committee.  Their point in saying that has something to do with how committees function less well than individuals–the problem with “group thinking.”  Personally, I think the camel design seems rather functional.

Some have asked, what is it about the EHR universe that has you dehorting the EHR process as though you are some sort of savant–nobody really asked that, but I wanted a segue and that’s all I came up with.

It’s the committees.  I feel a little like Quasimodo repining about the bells.  Raise your hand if you are on an EHR committee.  See?  Now, if you think that not only has the committee not accomplished much, but believe that it may never accomplish much, lower your hand.  Now look around.  Not many hands still up.

Take a few minutes and work Meaningful Use into your EHR task time-line for processes, work flows, change management, training.  Need more time?  I’d need more time than I have, and when I finished I guarantee I couldn’t explain it to anyone.  This is what happens when people get into a room, have a charter, and try to do something helpful.  I am sure they are all nice people.  But be honest, does this make your day, or does it make you want to punish your neighbor’s cat–you may have to buy them a cat if they don’t already have one.

What to do?  Here’s my take on it.  Plan.  Evaluate the plan.  Test the plan.  Know before you start that the plan can handle anything any committee tosses your way.  Let people who know how to run large projects into the room.  Seek their counsel, depend on them for their leadership.  If the plan is solid, the result has a better chance of surviving the next committee meeting

Suicide: The Hospital Business Model

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I prefer to talk about events before they take place, not after. I don’t know if that makes me a futurist or merely someone not bright enough to understand them as they now are.  I like to have a think about things that don’t seem right.  This helps me understand what I may be missing, or if I may be on to something.

I got one of my “ah-ha” moments while driving to the airport yesterday; something I have done a few hundred times.  I could drive the route in my sleep.  I know of two ways to get there, so I really never thought about needing a third.  My bad.  One of the roads I take was flooded—the rain was so hard it appeared to be raining up.  After being stuck in traffic for twenty minutes I opted for route number two.  Five minutes later, the drenched man by the side of the road told me the bridge was out.

I found myself out of choices, poor planning on my part.  I came to a fork in the road and took it.  I still had a reasonable amount of time to make my flight.  I then found myself driving behind a nun who was driving a Rambler.  Really.  We never hit thirty on the speedometer.  I would have missed the flight had it not been delayed.

It occurred to me as I was stopped that I had failed to heed my own advice.  I was guilty of having no plan for what to do if things changed, guilty of having no options because, “I have always done things this way.”

I am speaking this afternoon about innovation and transformation for the large healthcare provider model (hospitals)—could take five minutes, could take an hour—we will have to see how many people brought tomatoes to throw.

The large provider business model is dying.  Play along with me for a minute.  How many different services and procedures are offered by the “average” hospital?   A couple thousand.  Some are performed hundreds of times each day, some on a somewhat regular basis, and some rarely.  Let’s focus on those done rarely.

The funny thing about having the ability to do something is you have to pay for the resources and technology whether you do it once or hundreds of times.  The less you do it, the larger the negative ROI.  Most large providers offer many services with negative ROIs.  How does one alter the business model to compensate for that?  Charge for parking; charge $7 for each Tylenol, outsource less profitable services.

It might be important to recognize that the reason many services—the ones most patients need—are marginally profitable is because those services are helping to fund the unprofitable services.

Sooner or later, hospitals cut loose the low-end services.  Others gobble them up, and make tremendous profits from offering them under a new business model.

I started thinking about other industries that operate under a similar business model.  The two I came up with are movie theaters and the large airlines—both which offer a service albeit not often a friendly service.  One of my early clients was the CFO of one of the country’s largest movie theater chains.  They knew their costs down to the penny.  They lose money on every movie they show.  That is why they charge eight dollars for popcorn.  Their model is broken.  Are they changing it?  No.  Others changed it.  Blockbuster did.  Then their model broke.  Now we have NetFlix.  Netflix are making lots of money and they do not even offer popcorn or JuJuBes.

Continental and United merged.  Did that make things better?  Did they stop charging for bags?  Did they offer free meals?  More seat room?  Of course not.  Combined, they are losing even more money.  Their model is broken.  Are they changing it?  No.  What are they doing—buying even bigger planes.

You know who owns fifty-five percent of the flying market?  The pesky, disruptive regional carriers.  They make lots of money.  They have a different model, and they know their costs.

Disrupting the business model and changing the way you do something are not the same.  At some point there will be nothing left to change except for what you do.  Building a need for every sub-specialty offered by EPIC is not disruptive, it is dysfunctional.  Offering the same services as every other hospital within your coverage area is not disruptive, it is duplicative.  It simply divides the revenue pie for any given procedure into smaller slices.

Hospitals know their charges, not their costs.  They can’t pull a P&L per patient, or per procedure.  How can one price an Accountable Care model without knowing the costs?  An executive at a large children’s hospital told me they have to markup the costs of little things, like pills, two-hundred and fifty percent.  Unless hospitals are prepared to disrupt their business model, they had better buy a lot more pills or start offering JuJuBes.

 

Healthcare’s pre-mortem

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I call this my premortem of the large provider business model.  The new reform law is Washington’s Anschluss of the healthcare business model—the annexation of the old way of doing business.  With change, as with writing a novel, the most difficult part is to invent the end.  It is only difficult if someone actually gets to that part, the end.  Many large providers remain mired in the first chapter.

The term Ultima Thule refers to any distant place located beyond the “borders of the known world.”  That is where we are when it comes to trying to understand the implications in the realm of the known and unknown external influences on the business model of the large healthcare provider.  I tend to have a stygian mindset about how I think these influences will play out—when Washington sneezes, it is the providers who catch the cold.

Sometimes it is a matter of asking the right questions.  Unfortunately, when one asks questions, somebody always has answers.  The bad thing about answers is they often bring closure to the process of thinking.  In the short-term there may be a modus Vivendi between us—an agreement to agree to disagree, but in the long-term limiting one’s vision to the borders of the known world will prove fatal.

Gone are healthcare’s Elysian moments when leaders thought they could keep doing what they were doing as long as they did it a little better.  At some point, there are no more costs to cut.  Providers will not be able to get any Leaner.  The time has come to square the circle—something proven impossible in 1882 by Ferdinand Lindemann.  Squaring the circle is an attempt to construct a square with the same area of a given circle using Euclidian geometry.

Trying to retrofit today’s healthcare model to meet tomorrow’s business requirements seems to me to be a similar argument.  It can’t be done; you can’t get there from here.  That it cannot be done won’t stop people from trying.  The impossibility cannot be proven.  The proof will be apparent only when hospitals start to fail.  Only then will it be possible to “walk back the cat” to diagnostically deconstruct what failed hospitals should have done.

A purpose of intelligence is the ability to assess and predict.  The application of thinking and intelligence is the ability to assign relative importance to predictions.  Here’s my assessment and prediction.

To successfully change the large provider model one must disrupt it, not simply adjust it.  It has nothing to do with asking, “How can we do this better?” disruption requires that we ask, “Do we need to do this?”

For example, last week I met with the former CFO of a group of east-coast hospitals.  Each hospital had an orthopedic department.  The group also owned an orthopedic clinic.  The clinic was ranked among the top twenty orthopedic centers in the US.  None of the hospitals’ orthopedic departments was ranked in the top one hundred.  The CFO recommended the hospitals close their orthopedic departments and service those patients at the clinic.  This would improve quality and eliminate duplicative costs.  Great idea.  Unfortunately the board liked their hospitals to be able to offer all things to all people—quality and cost be damned.

Why?