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Can Healthcare IT Deliver Value? (Part I)

January 24, 2014
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This is the first of two posts examining a value-based approach to healthcare information technology.

Like the rest of healthcare, HIT is starting to recognize the importance of the Value Equation in reforming the U.S. healthcare system. In it's simplest form, the value equation is simply the quality of the service divided by the cost of delivering that service. Today we are paid "to do stuff" - do more procedures and office visits and you get paid more. This is a volume-based system and no question it has been successful in driving a high volume of healthcare. Most observers agree it has been less successful in driving quality, safety and satisfaction. The coming shift from volume to value will have an enormous effect over time. It holds out the potential to put outcomes front and center and to change economic incentives in ways that open up whole new models of healthcare delivery. It's a tremendous opportunity but will clearly face many challenges. We are in the process of disrupting services that are very personal, important and represent almost 20 percent of the US economy.

It's going to be messy folks but it's the right thing to do. My own CEO here at Cleveland Clinic, Dr. Delos "Toby" Cosgrove recently declared, “It’s almost a patriotic obligation to begin to figure out how we do this because healthcare costs are going to eat education and all the social programs in the country if we can’t control the costs going forward. We have to develop a new model for delivering care.” I couldn't agree more.

So how should we think about value-based healthcare IT?

A good place to begin is by remembering that HIT is a means and not an end in itself.  Sure many of us in the field love the technology, love to tinker and to dream about the next cool piece of hardware or software. And that's fine from a personal point of view. But our strategic lens should be on HIT as an enabler of the delivery of high value healthcare. This means we should be thinking in terms of services and solutions. It also means we have to be ever more committed to measuring the cost and the benefit of HIT initiatives.

I find there is a regular set of questions that can help me and my clinical and administrative colleagues stay on the value track. Here are few of them and why I think they are so powerful.

"What is the problem we trying to solve?"

This one is great for keeping the focus on solutions rather than "stuff". It forces everyone to clearly articulate the current state and to imagine what the future state might look like. Get a diverse group together and have them play off each other’s experiences and ideas. This is a good time to practice being a three year old kid again and ask a lot of "Why" questions.

This approach has a subtle but very powerful side-effect: it avoids moving prematurely to potentially emotionally charged discussions about things like specific technology (“Product AAA sucks, we gotta use product ZZZ!”), people (“Good luck getting the doctors to do that!”) or resources (“We will never get funded for that!”). You still get to these issues eventually but when you do it is in the context of a solution that is already being considered. Do it the other way and you short-circuit the creative and consensus building processes by jumping to conclusions based on constraints that may or may not be real.

By the way, some folks prefer to avoid framing issues as “problems”. For them, an alternative way to ask this question might be, “What is the capability we are trying to create?”

Does this initiative or request align with the strategy of the organization at enterprise, regional and local levels?

This is great way to surface personal agendas and/or ideas which might be great but not right for your organization at this moment. Can the individual or group show how this new effort would advance the organization? Does it fit in with existing efforts or is a duplication or distraction? It shouldn’t be that hard to show connections. If the case is convoluted or the timeline to get to the payback is long, then it’s unlikely this is something that should be a high priority.

Dr. Smith’s new idea for a “killer healthcare app” is probably very interesting. That’s different from being something we want to consume scarce resources.

This may seem like “no-brainer” governance and prioritization but it’s hard to do this consistently well and in a way that is acceptable to all parties. Formal ranking tools that take into account strategic alignment and financial impact can be quite helpful in working through this question. Having an established multi-disciplinary group that regularly reviews these requests builds experience, confidence and consistency.

In my next post on this topic, we will look at different ways to measure value and manage performance to achieve greater value in healthcare IT.