The status quo will fight for survival.

Picture it... "A healthcare leader has a vision that could radically improve the efficiency or operating success of an organization... the clinicians or community fight for the status quo... the leader either dramatically reduces the vision and abandons the plan or in some cases is asked to step down". When faced with radical change, the healthcare ecosystem, like all organisms, will fight for its survival.

If you consider the challenge facing our national healthcare system, namely an inability to sustain the cost of delivery, iterative improvement is not sufficient. Sustainability of our leadership position in healthcare will only be possible if we can achieve dramatically better levels of efficiency, very quickly. So the very levels of change needed are likely to be met with substantial opposition… the survival instinct of the status quo.



In my opinion the healthcare issues we face as a nation have little to do with clinical care and much more to do with operating efficiency… (Having said this though, I do agree with Jim Rosenblum's blog raising the issue of unwarranted clinical procedures and their effect on the unnecessarily large cost of healthcare). While there is little doubt regarding the overall nature of the problem, “we can’t afford what we want”, there is little consensus on a resolution.

We could take the route that Canada or the U.K. has taken where lower levels of re-imbursement are enforced in a system that has roughly the same operating efficiency as the US. In these circumstances, elective work and some of the “fringe needs” between being healthy and being in hospital are sacrificed. Long elective waiting times or refusal of particular clinical services is the result.

We could take the route, as a nation, of driving down prices and limiting the investment in innovations and commoditizing technology, pharmaceutical products and med/surg supplies. The US has paid more for healthcare products and clinical talent than the rest of the world as a result of the profit margins established in the healthcare economy and has developed a resultant leadership position for healthcare technologies. If we commoditize these technologies by removing the opportunity for profit, who would step in to provide what the reinvestment of these profits has accomplished on a world scale, namely clinical innovation?

At the end of the day, I think the way for us to preserve the healthcare culture of clinical innovation in the US and our leadership position in healthcare is to drive out operational costs, those costs that add nothing to the overall value of clinical care.

There have been a number of notable, recent efforts by hospitals focusing on the challenge of operational efficiency. Dr. Fred Ryckman, Director of Pediatric Surgery at Cincinnati Children’s Hospital, presented outcomes at the recent IHI conference in San Francisco (October 5th and 6th) indicating a capacity increase equivalent to $137 million annually of which $50 million has been realized (the net margin of this realized capacity was not presented). Georgia Tech’s Health Systems Institute, this past August, validated the net margin increase of Mercy St. Vincent’s Medical Center, Toledo’s operational improvement efforts (a hospital my company is working with) at $10.3 million annually. If these levels of operational savings are sustainable substantial capacity increases could be realized. The system could halt or dial back healthcare spending and greatly reduce the commoditization trend in healthcare.

If we were able to dramatically increase operating efficiencies and the capacity of our delivery system to provide care, people of the world would still yearn for the opportunity to be part of our innovative healthcare culture and to participate in the system when they need care. We would continue to be an attractive healthcare investment market for the growing wealth in the rest of the world.

However, the current system will fight for its survival so we should be on the lookout for courageous pioneers, willing to fight the system’s tendency to maintain the status quo.