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Skating to Where the Puck Is Headed: Why UPMC's Advantages Go Beyond Resources and Market Share

January 16, 2013
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A few thoughts on my visit last week to Pittsburgh, and what separates the industry-leading patient care organizations from the rest


It was great to get back to Pittsburgh last week, and to spend time with senior executives and leaders of the UPMC health system, the vast, 20-plus-hospital integrated health system with a dominant provider market share in western Pennsylvania.

I had been invited to speak at the inauguration of a special series of data analytics courses custom-created for senior non-IT executives at UPMC by Carnegie Mellon University, and was gratified that UPMC executives were interested to hear what I might say about where healthcare is going in this country on a broad level, and how analytics ties into it.

Well, as I said to the assembled audience, where we’re headed is a healthcare system that will be intensely data-driven and analytics-facilitated on all levels going forward. And what the UPMC leaders are doing, on all levels, including through their five-year, $100 million investment in big data, their intensive work to leverage EHR and other clinical information systems to continuously improve clinical performance and to enhance chronic care for patients, and yes, their making sure that senior executives in finance, clinical departments, and other areas, are tutored in the basics of big-data analytics—all these are going to be important components of the new healthcare, and as Wayne Gretzky would say, the UPMC folks are skating to where the puck is headed.

Now, granted, the UPMC organization has several tremendous advantages compared to many, perhaps even most, patient care organizations nationwide. First, it has extensive financial and human resources to engage in industry-leading IT innovation of all kinds, including leveraging IT for population health, developing sophisticated analytics tools, whether for population health, clinical performance improvement, operational analysis, or any of a number of organizational objectives; and really, the resources for just about anything its leaders really want to pursue. I’ll get back to the question of financial advantages shortly, but let me move on to two other key elements.

Two areas of decided advantage that the UPMC leaders do share with the leaders of nearly all of the truly industry-leading patient care organizations nationwide are these: having a strong cadre of employed physicians (in the case of UPMC, over 3,200 of them!); and owning a provider-sponsored health plan. Is it any surprise that virtually all of the most innovative patient care organizations in the United States (one could easily name names, but those names will also be well-known to most of us already, anyway) have one or both of those elements in place? In both instances, what makes the difference is the presence of aligned incentives, which both creates a culture of collaboration and innovation, and in turn benefits from that culture.

But, back to the financial advantage question. All healthcare organizations, including the relatively prosperous UPMC, face significant hurdles going forward in a reimbursement and operational environment that is becoming more challenging by the day. What I don’t accept is the excuse that a lack of resources is a good excuse for not innovating towards the future, because at the end of the day, the purchasers and payers of healthcare have spoken and are continuing to speak, and their message is clear: healthcare providers must become more efficient, cost-effective, quality-reliable, and so on. In other words, none of us really have any choice about this any longer, as healthcare costs in this country are becoming unsustainable over time, and payers and purchasers are demanding change.

So, what it really comes down to are two words: vision and mission. Remember George H.W. Bush, the first President Bush? He once famously conceded that he lacked what he called “the vision thing.” The reality for U.S. healthcare providers is that “the vision thing” is no longer optional going forward. Decades ago, healthcare management was still largely what I sometimes call a “custodial” type of management, meaning that, at a time in the pre-prospective payment world, all a good hospital administrator had to do was to make sure the doors stayed open and the floors were regularly cleaned, because she or he was virtually guaranteed success in a purely volume-based payment system.

But no more. And what makes vision palatable for all those in patient care organizations who need to follow their leaders on vision, will be a sense of mission—usually linked to caring for the health of one’s community, improving patient safety and quality, connecting clinicians for greater effectiveness, and so on.

And that’s where we come back to where we began, because what the UPMC folks, including CIO Dan Drawbaugh, CMO Steven Shapiro, M.D., CMIO G. Daniel (Dan) Martich, M.D., UPMC Insurance Division chief analytics officer Pamela Peele, Ph.D., and Lisa Khorey, vice president, enterprise systems and data management, and many, many others in their organization, have, is a shared sense of vision and mission. They know where healthcare is headed—towards a new system in which healthcare providers are required to provide greater reliability, patient safety, care quality, efficiency, cost-effectiveness, accountability, and transparency—to the purchasers, payers, and consumers of healthcare. In other words, this is what I’ve been referring to as the new healthcare.