American Health Care Leadership Institute

Navigating into Blue Water

In 2005 W. Chan Kim and Renee Mauborgne coined the term “Blue Ocean Stategy.”  This term brought focus to a concept that we in medicine have known for a long time, “in the current framework you cannot tweak the practice of medicine much to obtain better outcomes or more efficiencies.”  Kim and Mauborgne define “red oceans” as being highly explored and crowded with competitors, like sharks around a fresh kill.  The only way to improve business in a red ocean is to cut costs and take market share away from your competitors.  Blue oceans represent untapped markets or a new approach to business that leverages existing infrastructure and people but integrates new technology or utilizes some new business tool or idea.

The classic example is the iPod.  The market that existed in the late 90’s was one where there were numerous media devices like the Reo vying for the same customers.  The only way to get people to buy your product was to increase the amount of memory your product had or to cut your price.  Steve Jobs recognized the disconnect in the music world with the big record companies suing 12 year olds over file sharing  and companies like SonicBlue trying to develop the next media device.  He introduced the Apple iTunes website and the iPod and transformed the industry.  He did not create a new industry.  He just created a new way of looking at the same old problem.

An Antiquated System

We are at the same place in medicine that the music world found itself a decade ago.  In the current economic climate the there is no longer a tolerance for the healthcare industry to continue to grow at its current rate, a rate that will soon consume more than twenty percent of the gross domestic product.  One obvious flaw in the system is that there is no financial mechanism to pay the medical community for patients getting healthier.  Our system reimburses more care, not better care.  Given the age old adage, “you get what you pay for” this obviously needs to change – the question is how.

A New Approach

There are periodically instances of “blue ocean” thinking that arise within healthcare.  The concept of Pay for Performance emerged but then got bogged down in “Pay Go” where new Medicare initiatives had to be budget neutral.  Another problem with this program was the 2% bonus did not motivate a whole lot of practitioners and it was only the much larger organizations that saw a 2% margin increase as significant.

But several private health insurance companies have taken a novel approach to the future of healthcare and begun to experiment with the newly mandated “Medical Home” and the concept of preventive healthcare.  With a full implementation of the “Medical Home” and an aggressive approach to preventative medicine, it is felt that certain disease processes can be avoided or caught early and costs to the system can be dramatically decreased.   Some health insurance companies have even been willing to benchmark organizations and indicated the willingness to split future decreases in healthcare costs 50/50 with the company and the healthcare provider.

This is HUGE. For maybe the first in a meaningful way, physicians will be paid to keep people healthy.  This does not represent capitation, where physicians were rewarded for spending less on patients.  This is reimbursement for lowering hemoglobin A1C’s, systolic and diastolic blood pressure, cholesterol and other measurable figures into the normal range.  This is payment for routinely ordering cancer screening tests and catching cancer early or preventing it.  This is not a novel concept per say but technology, data tracking and physician utilization of this technology has progressed to the point where it is now feasible for meaningful change to occur.

A New Way Of Operating

But this “blue ocean” in medicine will require us to “captain the ship” differently.  In preventative medicine the physician will need to transition from the ingrained reactive practitioner to a proactive involved physician willing to employ best practices and lead a team that directly reaches out to patients and helps them aggressively manage their health.

“I already have those skills,” you say.  “I’ve been in practice for 20 years.  I know how to run an office.”  This is true, and proactively managing someone’s health is not something we were taught in medical school or have developed in practice.    The expectations of the market place have changed.  The Baby Boomers want more from their lives, especially in retirement.  Armed with the internet they are doing their own research and playing a larger role in choosing their own heatlhcare.

In addition, the ability to lead, coach, and encourage patients to become their healthiest self is not a class we ever took.  If you are overweight, have elevated cholesterol, or smoke, can you effectively get your patients to lower their weight and cholesterol or stop smoking?  You can suggest your patient eat less and exercise more, but  having a system of care that investigates the patients “competing commitments” that are ultimately driving  the behaviors that have your patient  remain overweight and then supports them through the change management they must implement, no significant progress will be made.  Additional skills and systems to “meet patients where they are,”  to communicate with the dock workers and/or the executives you have in your practice  understanding they may hear and respond differently to your recommendations will require a new way of doing business.  While this may feel like a lot of change from the way we practice today, the good news is that, at the end of the day, we will get paid for overseeing and insuring the changes occur, not doing everything ourselves.  The opportunities for leveraging our expertise, for becoming the “captain of the ship” and for generating revenue from the outcome in an efficient practice will break us free of the chains of time that currently constrain the number of patients we can see today.

A “Whole Office” Change

As you think about the skill sets you will need to hone, you may begin to think about how your practice personnel will begin to evolve.  No longer will your non-clinical staff just be calling patients making sure they know about their next appointment or following up on labs.  Your staff may be calling to follow up on the daily weights your CHF patient is now inputting into your on-line EMR and helping her re-sync her Bluetooth bathroom scale to her computer.  Your staff may be offering advice on the latest stress reducing yoga class that your practice is offering free of charge on Monday and Thursday nights or doing an on the phone guided meditation to help your patient re-center herself.    As a part of this the skills of your employees will change allowing your staff to lead by example as they live and teach a healthier, happier, and less stressed out lifestyle

A New Way of Thinking

The Command and Control method of management and the Socratic method of teaching are prevalent tools in the toolkit of physicians who also help manage their practices and spend time teaching their patients.  Over the last 50 years, in business and other industries, these limited tools have been augmented by more effective and efficient tools.  Learning how to simulcast, actively listen, define competing commitments, and effectively advocate for change are vital tools that need to be added to the toolkit of the average physician and that’s just the beginning.

A Way Out Of The Feeding Frenzy

The gauntlet has been set.  The question is what will our response be?  Dig our heals in and swim in the “red water” with anger and frustration trying to argue for a system that has failed to deliver on the promise of cost effective, proactive healthcare? Or head into the “blue water” of doing things with a new and yet to be fully charted way of fulfilling on the promise of being medical leaders to help people live long and fulfilling lives with amazing and wondrous tools at our disposal?    The marketplace is now ready to pay for this transformation.  To thrive we will need to grow and change.  Knowing how smart physicians are yet how reluctant physicians are to make change, I am fairly confident that early adopters of the expanded toolbox of skill-sets will have a huge lead on their counterparts and be much more successful in the long term.  This is an 18 month process and the roadmap is being charted as we speak.  Done over time we can take small steps to allow our way of thinking, and our offices to change gradually and in a less traumatic fashion.  Like the obese hypertensive patient on the verge of a massive MI, the important thing is to identify the key indicators, begin to take effective medication, gradually change our lifestyle and, at the end of the day, we will have a better, more enjoyable, safer and functional life.  We all know how to encourage our patients to do this.  It would appear that it is time for us to use the same principles and to take a little of our own medicine.