Health Reform - Vertical and Horizontal, Focused and Unfocused.

Let us honor if we can
The vertical man
Though we value none
But the horizontal one.

Wystan Hugh Auden (1907-1973), Epigraph for Poems, 1930

October 16, 2011- In the health care realm , I tend to be a horizontal thinker in a vertical world. Put another way, I’m a generalist in a world that caters to specialists. Federal policy makers think the same way. They feel broadening the primary care base will rationalize the system, make it more efficient, and lower costs.

Which reminds me of the writings of Edward de Bono, MD (1933- ), a London-based doctor who runs a think tank institute in Malta. De Bono came up the concept of “Lateral Thinking. ”

De Bono visualizes the medical landscape as a series of vertical holes. Each hole comes stacked with specialists with a world-class expert at the bottom of each hole. The trouble is, he says, that no lateral connections exist between the vertical shafts in a horizontal medical world.

Policy makers, and Obama’s government experts, call this lack of lateral connections as “fragmentation.” They claim the problem of equal access could be solved by herding primary care doctors, specialists, and hospitals together into accountable care organizations – a solution roundly and soundly denounced by even quasi-ACOs like Mayo, Kaiser, Giesinger and other integrated groups.

The solution, according to policy and Obama folks, is to reconnect the vertical holes with armies of newly trained primary care doctors. Put a primary care lid on the entrance to the vertical shafts. Make generalists better-paid than specialists. Have the cognitive doctors funnel and control referrals to procedural specialists.

The problem, of course, is: that is not the way the world works. Patients prefer to go directly to specialists, or to specialty-oriented organizations in which the primary care doctors are closely allied with the specialists.

What goes on in the real world is that hospitals developed specialty lines of service, most often related to heart, orthopedic, or cancer care. Specialists, in their turn, develop and own facilities in which they focus on one line of service – cataract surgery, joint replacements, minor cardiac procedures, hernias, rehabilitation techniques, back-pain services, diseases like diabetes, and so forth.

Regina Herzlinger, PhD, a tenured professor at Harvard Business School, where she teaches MBA-seeking physician entrepreneurs, calls those vertical organizations “focused factories.”

Here is how Hwezlinger explains these “factories.”

The American health care industry is filled with opportunities to establish focused factories, ranging from those that perform one procedure, like cataract surgery, to those that provide the full panoply of care for a disease like cancer. To fulfill the promise of focused factories, however, the industry will have to resize, that is, replace its unfocused multiple providers and redundant , underutilized technology with muscular focused factories loaded with cost-saving , quality-enhancing medical technology.

The simplicity and repetition inherent in “focused factories, “ which health care people prefer to call “centers of excellence,” is competence coupled with low costs and fewer complications.

Congress, under pressure from the general hospital industry, has outlawed physician-owned orthopedic and heart-owned hospitals. But don’t fret. Focused factories will be back in other forms – short-term ambulatory surgery facilities, non-invasive treatment centers, and centers detached from hospitals, and diagnostic and disease centers.

You can keep the vertical down or flatten the vertifal into the horizontal.


Tweet: Specialist-oriented centers of excellence, sometimes called focused factories, are proliferating across the medical landscape.