We’re all familiar with most of the fruits of the Affordable Care Act; insurance mandates, the “Cadillac” tax, state insurance exchanges, etc. A less-publicized emergence of the 2,000+ page bill is the creation of the Center for Medicare and Medicaid Innovation(CMI) within the Department of Health and Human Services. Their mission is to “help transform the Medicare, Medicaid, and CHIP programs to deliver better healthcare, better health, and reduced costs through improvement for CMS beneficiaries and, in so doing, transform the healthcare system for all Americans.”
Healthcare is often recognized as an industry that is slow to innovate. Most of the innovations that influence the delivery of healthcare come through pharmaceutical companies, medical device companies, research labs, etc. Definitely not hospitals themselves. Many hospitals and health systems are recognized for improvements in operations, patient care processes, facility design, etc., but that is not the majority of what can be considered healthcare delivery innovation.
Robert Betka, Managing Director for Catalyst Management Advisors, Inc. (a healthcare consulting firm) said that innovation is, “the industry’s latest buzzword for doing what it’s supposed to be doing: continually trying to improve it’s product.” Many like him feel that the word “innovate” is thrown around a little too much, and that most of what is considered “innovative” (checklists, Lean practices, etc.) is really just improvement. Betka continued to explain, “health care leaders should be focused on providing measurable value for service delivered, whether ‘innovative’ or not.” Others who concur ask, without a context of quality improvement that is outcome-based, what’s the point of innovating anything? It’s a waste of money and effort that doesn’t result in any safer, more efficient, valuable results for patients.
This brings us to question what exactly the innovation proposed by the CMI entails, and are we ready for it?
As for what the CMI plans to do, they have established a standard process for change. It is as follows:
1. Solicit ideas for new payment and service delivery models
2. Select the most promising models
3. Test and evaluate models
4. Spread successful models
You can read more details about their planned methods at the link provided. We’ll have to hope that there some good ideas out there to “solicit,” hopefully it is a good sign that venture capitalist investments in the healthcare industry seem to be on the rise. Also, we’ll have to hope that the testing and evaluation phase will be realistic, accounting for normal market fluctuations, etc.
Venture capitalist Lisa Suennen, on her blog, discusses the unique position we are in upon creation of the CMI. With $10 billion to figure out how to do things in a new and better way,
This will be interesting, because many of the potential areas of improvement may be in organizations that don’t yet exist, such as specialized new health plans, provider organizations and payment structures that have been much discussed but barely tried in practice. This effort will require a broad range of public and private views, including that of entrepreneurs who have those “not yet existing” ideas, to be considered.
We need to nurture companies that come out of left field with disruptive ideas that blow up conventional wisdom and replace it with completely new ways of doing things, particularly thing that impart convenience, personalization, health-optimization and cost-effectiveness into the healthcare equation. Will today’s healthcare giants be tomorrow’s healthcare leaders? Good question, but not likely unless they are willing to reinvent themselves completely—something very hard to do. It’s a little like shooting your dog because he’s ugly, even though he gave you years of companionship.
Something future healthcare organization administrators have to be prepared for is the “need to collaborate with people and organizations with whom, in the past, we did not even talk.” These words come from Dr. Rulon Stacey, President/CEO of the Poudre Valley Health System in Fort Collins, CO and the current chairman of the American College of Healthcare Executives. He was interviewed in the March/April 2011 issue of Healthcare Executive. Even though it may not be exactly what Dr. Stacey meant, these organizations who enter the picture might not even exist, let alone currently “talk” with hospitals and health systems.
This blog post raises some interesting questions about whether or not the government makes a good venture capitalist. Often political motives interfere with pursuing options that would yield significant innovation but carry risk. It also seems realistic to me that the government is often unable to apply the concept of sunk costs, dwelling too much on past investments/outcomes in trying to plan for the future.
An oft-cited problem in healthcare is near-sightedness, resistance to change, and too much satisfaction with the status-quo. I know that I would be much more optimistic about significant change happening if we had more systems in place that would foster the same innovation that can be found in other industries. There is an almost infinite number of ways to look at this issue and try to predict what will come of the CMI. I tried to open up a little bit of a discussion about what’s going to happen down the road. Time will have to tell. Our current healthcare system might have too many holes in it to make significant progress, or this may be the beginning of the progress we need. Hopefully the $10 billion is a good investment.