Friday, April 22, 2011

The Medical Innovation Weathervane

I like the weathervane as a metaphor for medical innovation. Innovation comes from everywhere – the North, the South, the East, the West – and everywhere in between.As a medical meteorologist, I see innovation coming from all directions.

I also like the idea of cows as accurate weather forecasters. If cows cluster together, you know something is up. The closer the cows together, the worse the weather is going to to be. Not that I believe in cows as great innovators. As one sage observed, ”Sacred cows make great steaks.”

Innovation Models

The federal government - The health reform law sets up the Medicare and Medicaid Innovation Center. It has noble goals – better care, better health, and lower costs. It has models for getting there - Accountable Care Organizations, Medical Homes, Community Health Centers, Population Health Centers, scores of regulations and agencies to improve “quality,” models to judge and pay for ” performance,” reward prevention and safety – and do it all from the top . For government and policy aficionados , these models are the “True North” for bringing order out of chaos and costs down to earth. To me, however, government through its regulations and control-freak mentalities impedes innovation. The nature of the beast limits its potential.

Innovation Grade: C- for present, C+ for future. Physicians and ordinary citizens are likely to resist its bureaucratic mindsets, and consumers may resent its limitations of choice.

Integrated Managed competition organizations from the West – Kaiser, Virginia Mason, Intermountain Healthcare, Group Health of Seattle, Midwest – Mayo, Marshfield, Cleveland Clinic, Health Partners, from pockets in the East – the Boston Academic complex, Geisinger, Dartmouth, large academic institions with tentacles out in the community. These integrated organizations have successful track records, capital and market skills, and dominant market share in their regions. They represent a tested and proven business models. They have sterling reputations in their own minds. But they may not have a broad primary care base. They may not lower costs, and they deliver less than 10% of U.S. health care. But all are innovation-minded, are high a new business and technological innovations, and have salaried physicians responsive to central management and business-minded physician leaders.

Innovation Grade: B for the present, B+ for the future. Its physician leadership and the public's continued trust in physicians gives it potential for growth.

The corporate world - The recent formation of Innovation Care, Inc, by Intel and GE is a sign of renewed interest in health care innovation by corporate giants. Other major players are Google and Microsoft, and a host of other large and medium sized players who see gold in the IT sector. All see Gold and sense opportunity in the health sector, which will soon represent 20% of U.S. economy. These various enterprises are focusing on “connectivity,” on connecting patients, consumers, and health care organizations by wirelessly empowering health-conscious consumers. These companies are focusing on more decentralized vision of the health care world - on home care, telemedicine, patient monitoring with mobile devices, and making patients more independent and self-reliant, on providing out-of-hospital, less invasive care, and stressing patient choice.

Innovation Grade: B- present, B future. It has know-how and capital, but operates at the fringes of medicine.

The independent practicing physician and hospital world- This is the most ill-defined and most promising. Truly big innovations require a business plan, venture capital, infrastructure, and entrepreneurial talent and experience. These are things most physicians and hospitals do not possess. Yet there are hundreds of thousands of physicians out there seeking an escape from coercive, regulatory, judgmental forces imposing outside regulations and demands on traditional physician business practices and threatening physician autonomy. Medicare and Medicaid underfund and over regulate hospital. Hospitals and doctors are reluctant business partners. Yet John Goodman, the conservative economist, says these desire to escape from outside pressures, coupled with desire of consumers for more choices and President Obama’s health care law “ will bring a major transformation of the nation’s health care over the next decade in the form of a large migration of patients, doctors, facilities, and services out of the third-party payer system.”

“It will cause a major increase in concierge doctors, concierge facilities, and concierge-type services. It will lead to the creation of new markets where providers are free to repackage and reprice their services without third-party payer approval; where transparency of price and quality becomes the norm for patients.and where suppliers of services compete for patients on price, quality and amenities.”

Innovation Grade: C- for the present, B+ for the future. Hanging together or hanging separately will be the problem. If hospitals and physicians mobilize in significant numbers, they could make all the difference.


True innovation to improve care, lower costs, widen access, and afford choice will require everyone to participate. In a capitalistic, center-right, diverse nation like the United States, no single innovation model will dominate. Innovation must come from all directions and all sectors. I agree with Henry Clay (1777-1852), the great Southern Senator, who proclaimed, “I know no South, no North, no East, no West, to which I owe an allegiance..The Union, Sir, is my country.”

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