Consumerization describes the transformation of an industry from a primarily business-to-business (B2B) enterprise to one that focuses on business-to-consumer (B2C) activities. In today’s B2B health marketplace, business is transacted among large employers, payors, providers, and pharmaceutical companies. The people being insured and treated have little involvement in or responsibility for their own care and cost choices. In the years ahead, healthcare will evolve into a B2C industry, in which consumers will take a much more active role in their healthcare decisions and expenditures. And, as a result, every healthcare company and organization will need to become more consumer-centric. The deck is being reshuffled, and there will be new winners and new losers, depending on how companies play their hand. **
Bundled care, is described as follows: a “bundle” is a procedure or service that includes every step of the process for a specific treatment, in one package, at a set price. Bundled knee replacements, for example, typically cost somewhere between US$20,000 and $30,000. There’s even a guarantee regarding results: If something goes wrong, the doctors fix it and don’t charge anything extra (unlike the current system, where a follow-up operation costs just as much as the first one). Conceptually, bundles are akin to switching from an à la carte menu to a prix fixe menu. They involve hospitals, doctors, employers, and insurers all working together to improve outcomes, reduce fragmentation, streamline care, and reduce costs, while making the entire experience more consumer-friendly. They typically work best for acute conditions that have fairly standard treatments—such as joint replacements or coronary surgery—because as those procedures are repeated over time, the providers can learn what works best and wring inefficiencies out of the process. ***
The challenge is not easy. According to the experts, “despite the promise of bundles, efforts to capitalize on these ideas so far have been limited to a few large employers and a handful of national name-brand hospitals—far short of what is required to truly transform healthcare. Over the next few years, the major challenge will be expanding the concept so that it covers a wider range of conditions and a broader demographic base: the “big middle” of patients and employers. Until most patients in most markets can receive bundled care for most of their needs, the strategy’s potential will remain untapped.”
I will add one more immediate priority that the consultants overlooked: physician engagement and alignment.
As we pointed out in a previous post, physician engagement is a major challenge for the healthcare industry. Furthermore, a lack of alignment between work and purpose is often a result of a cartesian split between analytic and social skills. A lack of shared values is behind some of the biggest challenges in organizations. It was the late W. Edwards Deming who stressed that “if you destroy the people of a company, you do not have much left.” Starting from the top, if leaders are not good at understanding others, they are likely to develop a strategy and expect everyone to get on board, without stopping to imagine how others may feel about that plan. In fact, just 30% of change initiatives succeed, according to 15 years of data from McKinsey. Social neuroscience tells us that “our organizational environments have systems and processes that nudge people to think rationally rather than socially. In the workplace, if you are in a mindset that discounts social cues, you are going to miss a lot of important information around you and a lot of opportunities for creative problem-solving. We end up thinking that a lot of problems have analytic solutions; you just have to crunch the right numbers. Yet many of the toughest business challenges require social solutions. What does the person, team, or whole organization need to feel good? People who feel good are generally more productive.”
A recent survey found that healthcare workers are the most stressed workers amongst all industries surveyed. Sixty-nine percent of healthcare workers feel stressed in their job, and 17 percent are “highly stressed,” according to The nationwide survey which was conducted from Nov. 6 to Dec. 2, 2013, and includes responses from 3,211 workers, including 450 full-time, private-sector healthcare employees. The numbers tell us that there is a crisis in the healthcare workplace which if left un-adressed will seriously impact productivity and lead to a cycle-of-failure.
Without being dramatic, it is safe to say that the Rx for “all of the above” is Physician Leadership.
* 2014 Priorities for the Healthcare Industry, strategy + business, February 24, 2014
** Putting an I in Healthcare, strategy + business, May 28, 2013
*** Healthcare Shifts from à la Carte to Prix Fixe, strategy + business, November 12, 2013