Health Care Inefficiency: Is There a Cure?

Curing Health Care: Six Prescriptions for What Ails the Industry

HBS Alumni Directory Bulletin,  December 2013

Given the complexity and resistance to change of the U.S. health system, is there a cure for its complexity?   And, if there is, will the cure by politically, consumer, patient, physician, or managerially driven?

I do not know. But Regina Herzlinger,  a professor at Harvard Business School,  has an idea who does. 

In her 1997 book, Who Killed HealthCare: America’s $2 Trillion Medical Problem and the Consumer-Driven Cure, she asserts only consumers can cure the system.  We cannot, she says, depend on health-insurers, general hospitals, employers, the U.S. Congress, or academics,  to remake health care.

I thought of professor Herzlinger when I read an eight-page section of the December issue of the HBS Alumni Bulletin entitled “Curing Health Care: Six Prescriptions of What Ails the Industry.”

Who will prescribe the cure?  Will it take consumers or outside experts in managing complex social systems? 

Maybe it will require imaginative people asking, not how to change what is, but what could be.   Maybe the present forces at work are like the proverbial ostrich.   They can run, but they can’t soar – innovate sufficiently with large enough ideas  to reach a practical solution.

In any event, here’s a quick rundown on Harvard Business School alumni and faculty members prescriptions for cure.

·         The first prescription, “Free the Data!” features the work of Jonathon Bush (MBA 1997).    Bush is CEO of athenahealth, a $42 million firm in Watertown, Massachusetts with a 30% annual growth rate.  His company sells cloud-based software.  The software helps physicians communicate and share information.  It tracks and manages test results; aids patients in making appointments, and seeing test results; and assists physicians in improving collections.    His firm rises above the common IT herd, by, among other things, allowing physician EHRs to talk to other EHRs and to do so without installing  in-office EHR systems.

·         The second prescription, “Build a Killer App, “ describes the work of Halle Tecco (MBA 2011) at Rock Health, a San Francisco-based company that organizes an annual  Health Innovation Summit Conference and offers aspiring entrepreneurs free-access in “The digital start-up space.”  The root idea is to deliver health care at the lowest possible cost in innovative ways.   How this can be achieved, given the burdensome handicaps imposed by government regulation, s challenges would-be health entrepreneurs.   Rock Health’s approach is the classic Silicon  Valley  solution  - bring like-minded entrepreneurs together;  let them socialize, compare notes, and collaborate, and in the process, evolve innovative answers to tangled thorny problems.

·         The third prescription,  “Measuring Health Care’s Real Costs, “ rests on the work of HBS professor Bob Kaplan.   It concerns his work at MD Anderson in Houston, where he has applied his concept of “Time-driving activity-based costing (TBABC) to real time cancer care.  TBABC identifies the time of people and equipment needed to perform a service and to reduce time and cost, for example,  to perform a test, schedule a procedure, and see the results. Here the idea is that there always room for improvement when an outsider with a critical eye looks a complex situations, improves  and  lowers cost, and measures results to provee the point..

·         The fourth prescription,  “Making Medicine Personal,” involves the work of Gregory Stock (MBA 1987).  Stock speaks of preventing disease and improving outcomes through the proactive use of simple  genetic markers, e.g., DNA in saliva and buccal mucosa scrapping, to identify environment factors such as mercury in dental fillings or in certain fish.   By using available techniques to identify toxins and their effects, Stock feels we may be just at the beginning of a biomedical revolution through use of personal genetic markets.  “Things are about to catch fire,” says Stock, “It’s a virtuous cycle where more access brings more knowledge and value.”

·         The fifth prescription, “Leveraging Human Nature,” concerns the work of Nava Ashral, HBS associate professor.    In Zambia, this behavioral economist has investigated how people’s behavior in buying condoms  has slowed the HIV epidemic in that country.   She found hair dressers sold twice at many condoms are anybody else.     She feels studying behavior patterns at the community level   may be more productive in bringing about  and improving outcomes than costs of care and medically-induced changes.  She and her colleagues strive to get people to use what they need and to buy what they need in the normal course of their day-to-day lives. 

·         The sixth prescription, “Integrate Preventive Care and Payment,”  relates the activities and highlights the idea of Seth Blackley (MBA 2007),  Frank Williams (MBA 1977), Harvard alumnus Tom Peterson, all backed by the UPMC Health Plan and by David Bradley (MBA 1977),  Bradley is founder and  chairman of the Advisory Board in Washington, D.C.  Together they participated in and helped found and further the mission of Evolent Health – to bring together people, processes, and technologies to create a provider-lead, clinician-driven  system focusing on preventive care.   Evolent  seeks to change the fundamental  nature of health care payment- by intervening in a more holistic way before patients reach the emergency room or the physicians office or are hospitalized.   The believe they can achieve this goal through “full-care teams” and health care coaches instructing patients what to do short of seeing health care professionals.   Evolent is now working in 15 markets, soon to expand to 30 or 40 markets.   TPG Growth, a venture capital firm, recently invested $110 million in Evolent.  Says Blackley, “Working in health care right now is like joining Google in 1999,  We’re on the cusp of a reinvention of a huge sector of the economy.”