healthcare 2.0

Have I erred on the side of stupidity?

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Twice in the span of twelve hours, I received unsolicited and honest feedback from two individuals whose opinion I value, about my attempt to share with you my thoughts about a range of issues concerning the business of healthcare.  One came from my father; since he holds that role he is allowed to offer unsolicited advice any time he wants, and I am entitled to listen to his advice.  The other bit of advice came in response to an email I wrote.  He is one of you, and he wrote the following:

I agree with many of your points and disagree with a few of them, and regardless, it’s a compelling, buzz-worthy angle that gets a lot of re-tweets and what have you, but I think it’s worth considering how these positions are affecting your ability to land consulting gigs in HIT. People want to hire consultants that they think will help them succeed, that think positively and pragmatically, and that are problem solvers (as opposed to problem recognizers): “we can do this together…I’ve had success before and if you let me, I will help you succeed…” that kind of thing. Just my 2 cents. It’s a trade-off, I know. You want to be honest and forthcoming, so I see the dilemma.

This was like being hit by lightening twice in the same day, so I thought I should take time to consider their input.  The feedback led me to ask if there are others who share the same opinion.  Is it possible my ramblings are about as well received, as I would be if I were to walk the streets of Tehran wearing a Star-of-David t-shirt?  What portion of readers drag my postings to their email folder entitled, “Kill him Later”?

Some believe a more effective use of consultants would be to compost them and use the energy generated to power a weed-eater.

Please permit me a few lines to try to explain my thought process for writing in my particular style and tone.  Before I began expressing my opinions on healthcare, I began reading what I considered the best healthcare blogs and editorials.  The first thing I learned is that I had nothing to offer of value on the clinical side of healthcare, so I focused my efforts on discovering what business issues providers dealt with, and which ones might benefit from receiving professional help—a consultant’s twelve-step program for problem solving.

I did a lot of homework; in addition to reading, I interviewed more than a hundred healthcare executives.  What was my takeaway?  One CEO told me the most needed skill on the business side of healthcare was “adult supervision”.  I did not charge in with uncorroborated opinions.  I used LinkedIn discussion groups to pose hundreds of questions about possible problems, studied the responses, and used them as a basis to formulate ideas about what was broken and what needed to be done to fix it.

I should note many of the blogs I read shared two traits; they often stated the same facts available on other blogs, and they rarely seemed to question the efficacy of the impact many of the Healthcare IT initiatives would have on operating healthcare’s business model—ours is not to wonder why, ours is but to do or die.

Not wanting to be superfluous, when I came to the fork in the road, I chose not to take a me-too position.  Instead, I threw metaphorical tomatoes and tried to get people interested in looking at the business model in a more disruptive manner.  Often, I did this by taking extreme positions on issues in the hope I might hit a hot button, and someone would think, “Perhaps we ought to talk to the tomato thrower and see if he can help us”.

My approach may prove to be less than brilliant.  What’s your take?

EHR-Shift Happens

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When my youngest daughter, who is also my oldest daughter was two, we had her straight-jacketed in her car seat as we headed off to run a few errands.  Cute as a button and immobile—just like the book says.  My wife had nicely fixed what was left of her hair—to our surprise, her four-year-old brother had given her a haircut the day before—with a pink beret.  As she had nothing else to do in the back seat, she toyed with the beret, eventually removing it.

After a few miles, checking on her via the rear-view mirror I noticed the beret was nowhere to be seen.  Ninety-nine times out of a hundred, that would mean she had dropped it out of reach, or tossed it to one of her invisible friends in a one-way game of catch.  I asked her where the beret was—sorry for ending in a preposition, but I have a call with a client in a few minutes and do not have the time to ensure I am writing this with the proper King’s English.

Her reply was to simply point to her mouth and giggle.  I repeated the question and she repeated her response.  Being the Super Dad; my son’s term for me, I eased to the side of the road.  We checked the floor of the car, check her car seat, and under her blankets—no beret.  We replayed the question for the third time and received the same response.  We checked her mouth—no beret.  We were hesitant to believe the charade-like communications of a two-year-old.  Nobody in their right mind would swallow a beret.  Then we started to think about the situation.  Bright, shiny, colorful things probably all look like candy to a two-year-old.

We called my sister-in-law, a pediatric nurse practitioner, and an executive at Children’s Hospital of Philadelphia.  She made it clear that we needed to head to the hospital, do not pass Go; do not collect two hundred dollars.

We drove to the ER.  They did their magic, and we were soon looking at her image of her tummy—that’s the most clinical term I know to describe the situation.  There was the beret—we could not tell if it was pink, but we were hopeful that this had to be the same one about which I am writing.

As it turns out, the problem did not lay with her ability to communicate, it lay with our inability to believe that someone without an MBA—feel free to substitute MD or PhD—could define the situation accurately.

I do not have time for a segue, so let us jump into this.  It is easy to ignore what others are saying when a bunch of acronyms a printed on a business card after the presentation of your name.  Been there, done that, too well educated for whatever opinion you may care to offer on the topic.

My docs, and goodness knows I have several of them, I trust with my life—and I have.  These same docs, I would not trust to manage the P&L of a lemonade stand.  This has nothing to do with their IQ, it has to do with their training.  They would not trust me to insert a chest-tube, even though I have watched several episodes of Life in the ER.

At some point, we need to take a hard look at who is best to do what for whom.  Acronyms, in and of themselves, do not qualify one to make business decisions, especially in a virulent environment like healthcare.  Reform, EHR, ONC, Meaningful Use, Certification.  Shift happens, and is happening.

Sometimes there is value in listening to the two-year-old.

saintPaul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

Strategy Millstones, should that read Milestones?

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If you like adventure, here’s a site to check, http://www.jfk50mile.org/.  This is an annual event whose origin came about during the cold war.  Fortunately for both of us, the entry date has already passed.  The thought behind the JFK fifty-mile hike/run was that because of the possibility of a nuclear attack, each American should be in good enough shape to cover fifty miles in a day.

I participated in the event twice—I wrote participated because to state that I ran the entire way would be misleading— and I can state with certainty that almost no Americans are close to being able to complete this.  The event is run in the fall starting in Boonsboro, Maryland.  It takes place along the Appalachian Trail and the C&O Canal and various other cold, rain soaked, and ice and leaf covered treacherous terrains.

We ran it in our late teens or early twenties, the time in your life when you are indestructible and too dumb to know any better.  One of my most vivid memories of the event was that on the dozen or so miles along the mountain trail, leaves covered the ground.  By default that meant they also covered the rocks along the trail, thus hiding them.  That we were running at elevation—isn’t everyone since you can’t not run at at least some elevation, (that may be the worst sentence every written) but you know what I mean—meant the prior night’s rain resulted in the leaf covered rocks being sheathed in black ice.  That provided a nice diversion, making us look like cows on roller skates—roller blades had yet to catch on outside of California.

There were several places along the trail where the trail seemed to fork—I’m not going to say and I took it—and it wasn’t clearly marked.  Runners could easily take the wrong fork (or should that be Tine?).  I think it would have been helpful had the race organizers installed signs like, “If you are here, you are lost.”  Hold on to that thought, as we may need it later.

Some number of hours after we began we reached the C&O Canal, twenty-six miles of flat terrain along the foot path.  It’s difficult to know how well I was doing in the fifty-mile race, in part because I had never run this distance and because there we no obvious mile markers, at least so I thought.  Then we noticed that about every five and a half to six minutes we would pass a numbered white marbled marker that was embedded along the towpath.  Mile stones.  At the pace we were running, we anticipated we would finish high in the rankings.  As fast as we were running, we were constantly being passed, something that made no sense.  That meant that a number of people were running five minute miles, which we knew they couldn’t do after running through the mountains, or…Or what?

The only thing we knew with any certainty at the end of the day was that the markers with which we used to determine our pace and measure how far we’d run were not mile markers.  We never figured out why they were there or how far apart they were, but we greatly underestimated their distance and hence our progress.

It doesn’t really matter whether you call them mile stones or milestones.  What matters is whether they serve a valid purpose.  If they don’t, milestones become millstones.  Milestones are only useful if they are valid, and if they are met.  Otherwise, they are should’ a, could’ a, would’ as—failure markers, cairns of missed goals and deliverables.

How are your milestones?  Are they valid?  What makes them valid?  Are they yours, or the vendors?  All things to think about as you move forward.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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The wildebeest postulate

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The Kalahari; vast, silent, deadly. The end of the rainy season, the mid-day heat surpasses a hundred and twenty. One of the varieties of waterfowl, most notably the flame red flamingo that nested in the great salt pans in Botswana, has begun its annual migration. In the muck of one of the fresh-water pools that had almost completely evaporated, writhes a squirming black mass of underdeveloped tadpoles. A lone Baobab tree pokes skyward from the middle of the barren savanna. In its shade, standing shoulder to shoulder and facing out, a herd of wildebeest surveys the landscape for predators.  Sir David Attenborough and PBS can’t be far away.

Some things never change. I make my way across the freshly laid macadam to meet the school bus. Fifty feet in front of me is a young silver maple tree, the tips of its green leaves yielding only the slightest hint of the fall colors that are hidden deep within. The late afternoon sun casts a slender shadow across the sodded common area. One by one they come—soccer moms; big moms, little moms, moms who climb on rocks, fat moms, skinny moms, even moms with chicken pox—sorry, I couldn’t stop myself—as they will every day at this same time, seeking protection in its shade. My neighbors.  It’s only seventy-five today, yet they seek protection from the nonexistent heat, a habit born no doubt from bygone sweltering summer days. A ritual. An inability to change. In a few weeks the leaves will fall, yet they will remain in the shadow of what once was, standing shoulder to shoulder facing out, looking for the bus. A herd. Just like wildebeest.

The kids debus–I just made that word, hand me their backpacks, lunch boxes, and hundreds of forms for me to complete.  I look like a Sherpa making my way home from K-2.

I shared this perspective with the moms, and have halted most of my bleeding. I can state with some degree of certainty that they were not impressed with being compared to wildebeest. So here we go, buckle up. By now you’re thinking, “There must be a pony in here somewhere.”

Some things never change; it’s not for lack of interest, but for lack of a changer. For real change to occur someone needs to be the changer, otherwise it’s just a bunch of people standing shoulder to shoulder looking busy. How are you addressing the change that must occur for EHR to be of any value?  EHR is not about the EHR, it’s about moving from a 0.2 business model to 2.0.  Are you chasing ARRA incentive dollars simply because someone is writing a check?

Someone who sees the vision of what is is—sorry, too Clintonian—must lead.  Be change.

One of the great traits of wildebeest is that they are great followers.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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Is your hospital’s strategy like everybody’s?

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In high school when my mother thought I needed to come down a peg or two she would call me, “Never Wrong Roemer.”  Today I prefer to go by, “Dr. Knowledge” or “The Voice of Reason.”  You can just call me Paul.

During my senior year of track I competed in the pole vault and I anchored the mile relay.  In the interest of transparency, I think it more appropriate to say I ran the fourth leg of the mile relay—anchoring implies more speed than I actually possessed. On good days, we fielded a mediocre team.

I never enjoyed running the 440.  It is for sprinters, and I am a distance runner.  One day however I unwittingly became a sprinter.  We were in a dual meet against Wilde Lake High School.  As always, the mile relay is the last event.  If we won the relay we would win the meet.

The fourth runner from Wilde Lake received the baton several seconds before me and had me by twenty yards.  I made up the distance between us midway through the first turn.  One inconsequential factor I did not know at the time is that two years later he would be participating in the Olympic trials in the 440.

It turned out not to be so inconsequential.  What happened after I pulled alongside of him remains a bit of a blur; the same kind of blur the Wile E. Coyote saw each time he thought he had caught the Road Runner.  Turns out I had outsmarted myself.  I was caught up in the moment which is nothing like being caught up in the reality of the situation.  I was in a competition I couldn’t win and I did not know it until it was too late.

Business is a lot like that.  Leaders get caught up in the ferocity of what is going on around them.  You’ve seen them; you work with them.  These are the same people who don’t have an opening on their calendar for six weeks, the same people who are busy putting out last month’s fires, who are hurriedly building defenses for whatever may be around the next corner.

Some of those intelligent and well meaning leaders are so focused on catching the runner in front of them that they lose sight of the race, lose sight of their role as leaders.  Some leaders approach healthcare strategy as a series of directionless sprints while others view it as a marathon in a pack of lemmings.  If everyone is running in the same direction, how wrong can their strategy be if they stay with the pack?

I think we will discover in the next several years many of those marathoners will drop out or be disqualified.  They are approaching a poorly marked turn, and if they fail to take it they will be overcome by one or more of a multitude of factors that will eventually lead to their demise.

While it is impossible to disprove a negative, time will tell.  My advice—next time you see a fork in the road, take it.

Then there was the time I asked my mother to drop me off a half mile away from my girlfriend’s house so she would think I ran the full eight miles to come see her.  But, we will leave that story for another time.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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My pre-mortem examination of the hospital business model

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  • encyclopedias
  • newspapers
  • movie rentals
  • theaters
  • airlines
  • magazines
  • libraries
  • broadcast television
  • wireline phone companies
  • record companies
  • DEC
  • Xerox
  • department stores
  • SUN
  • H-P
  • GM
  • A&P
  • Circuit City
  • Most US hospitals

In his book, “How the Mighty Fall,” Jim Collins describes the path to a business failing.  His five phases are:

  1. Hubris born of success
  2. Undisciplined pursuit of more
  3. Denial of risk and peril
  4. Grasping for salvation
  5. Capitulation to irrelevance or death

To those, I add a sixth, right between 3 and 4, “Dumping Ballast.”

  1. Hubris born of success
  2. Undisciplined pursuit of more
  3. Denial of risk and peril
  4. Dumping ballast
  5. Grasping for salvation
  6. Capitulation to irrelevance or death

Dumping ballast is the elimination of key components to lighten the ship.  Perhaps you remember seeing the movie version of Jules Verne’s novel,  the Mysterious Island.  In it, prisoners of the Civil War escape in a hot air balloon.  The balloon is ravaged by storms and looks like it will go down in the sea.  To keep it aloft the crew tosses everything overboard, things they would need if they reached land.

I think most hospitals in the US are concurrently working on stages 3 and 4.  The first step is to quit denying that they have a problem.  The second step is to recognize that some of what they discarded will prove critical to their chances of survival.

What do you think?

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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Why hospitals are like airlines and movie theaters

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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,—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.  Then I 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.  One of my early clients was the CFO of one of the country’s largest theaters.  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 NetFlixs.  They are making money without the popcorn.

Continental and United are merging.  Will that make things better?  Will they stop charging for bags?  Will they offer free meals?  More seat room?  Of course not.  Combined, they will lose 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.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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Firing Winston

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I was reporting to the board—or bored—sometimes it is the same.  The mission: figure out what was wrong, and then fix it.

I spent weeks talking to everyone from the executives to the receptionist.  I interviewed patients and physicians.  The doctors were not happy, the patients less so.  Costs were up, charges were down, and quality was down.

Of all the gin joints in all the towns…

The problem was easy to decipher.  I presented my findings.

“What do you recommend?” asked the chair of the audit committee.

I tried to look lost in thought.  “I fired Winston,” I replied.

“Why Winston?”

“Winston was where it all led; quality, cost, satisfaction.  Winston was responsible for the failures.”

Several members of the board nodded, and spoke among themselves.

After several minutes I jumped back into the fray.  “The more I think about it, the more I think Winston may be salvageable—not in the same role but somewhere else in the organization.  The employees really like him.  Besides, it’s the holidays.  Do you really want to be the reason Winston is not able to buy presents for the kids?”

The board held an in camera discussion.  “Agreed.”

I knew they would.  I started with my actual presentation.  “There is no Winston.”  The Winstons scattered around the table looked perplexed.  They were looking for the easy answer to the problems in their organization, they were looking for themselves.

Who are your Winstons?

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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The Kevorkian of the large provider business model

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I call this my premortem of the large provider business model—I guess that makes me its Kevorkian.  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.

Pittsburgh has more MRI machines than Canada.  Why?

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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Hospital Business Strategy–One size fits none

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One size fits none, or is it one.  The patient rarely buys what the hospital is selling.  The hospital sells a hip replacement—the patient is buying the ability to play golf for ten more years.

Clayton Christensen conducted a study which showed that seventy percent of today’s patients would have been in the ICU thirty years ago, and seventy percent of the patients in today’s ICUs would have died thirty years ago.  The question the study seemed to leave unaddressed is who is now caring for those patients who were not in the ICU and who didn’t die.  Wanna’ bet most have been outsourced to non-hospital care givers?

There was a successful business model in that group of patients when they were treated at the hospital thirty years ago.  There is an even larger business model today for that same set of patients; only it is no longer owned by the hospital.

Hospitals have more high-end capability—and cost—than the average patient will utilize—sort of an 80/20 rule on steroids.  Each successive clinical breakthrough enables the hospital to solve a problem for a mere handful of patients that will have no application to the bulk of patients.

What if instead of continuing to expand the current model ad nauseum, the hospital flipped the model on its side and catered to the eighty percent?  What if the business model centered on serving mainstream customers?  But then who or what would handle the other twenty percent of the cases?  An autonomous business unit could be established to serve those cases, or they could be outsourced to a group which did.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942
paulroemer@healthcareitstrategy.com

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