Healthcare is an industry unlike any other in the U.S. I, like many others, have struggled to explain why that is to the conventionally-minded business world.
Some say that factors such as the pressures of caring for people, the magnitude of consequences associated with poor performance, the cost of products and services, medical legal vulnerability, and a host of other factors, including the expectations of consumers, are the cause. After all, it has been said, that the American consumer of healthcare expects the very best care, right now, and someone else to pay for it.
I have spent a great deal of time trying to explain to new and highly successful businesses trying to enter the healthcare market that it is not business as usual– sometimes successfully, it's often not. Unfortunately, the roadside is littered with the carcasses of very business-savvy companies that tried to enter healthcare with the same conventional business strategies that brought them success in other industries. With 40 years as a practicing clinician, healthcare consultant, healthcare corporate executive, strategist and business development strategist under my belt, my own views are on the uniqueness of this industry that are beginning to gel.
A friend and sage fellow consultant, much loved by all who have ever known him, Harvey Price, once made a statement that has resonated in my consciousness for many years. “Healthcare,” Harvey declared, “is an industry that goes thorough phases without going through them.”
In and of itself, this comment says a lot. Adding a historical perspective adds to the incisive wisdom contained in these words.
For the first 60 years of the 20th century, healthcare experienced monumental advances - with Joseph Lister’s decades-long call for asepsis finally being put into practice, and with the discovery of penicillin and insulin. Science steadily expanded and improved upon such discoveries, clinicians moved into specialties, oversight was light, and practitioners kept paper notes - clearly not the most efficient of processes by today’s standards. Although it can be argued that we take better care of patients now, I think it can be equally argued that we have replaced one set of inefficiencies with another, high tech set of inefficiencies. Who among us, practicing in the1970s, could have conceived of the technologies available to us today? At least in those years we knew what we were dealing with, and felt that we could count on things to stay the same long enough for us to establish our own approaches to practice and make financial investments in the tools of our craft.
The introduction of Medicare by Lyndon Johnson brought the availability of affordable care to millions of our citizens, but it also began the process of pulling the rug out from under the independent decision-making of the industry. Suddenly reimbursements were uniform, determined by the government and based upon a continuously changing set of complex formulas and concepts which few practitioners even understood. Suddenly office managers were taking courses trying to keep up and understand as they absorbed the responsibility of keeping their physician employers in the black. Suddenly hospitals were hiring Chief Financial Officers to put their financial operations in place and to be attentive to such concepts as Return on Investment (ROI) and careful cost containment. If nothing else, the government can be counted on to continuously change the rules, and as a result healthcare was transformed from a rather static industry concentrating of taking advantage of advancing science, to a dodge-the-bullet, float-like a butterfly, keep one’s head above water, “What’s coming after what’s coming next?”, knock my competing hospital out of business industry.
Harvey had a corollary: “The challenge has been to distinguish trends from fads.”
In the late 1990s, handheld devices began to appear. Remember Palm Pilots? At first they provided a means of keeping contact information and schedules and required docking stations. Then they became wireless. Competing products offered more and more computing capabilities and began to interact with simultaneously evolving EHRs – first via docking stations and hard-wire – then wirelessly. Then came smartphones, and the cloud. At every stage, millions were invested, innovative startup companies appeared and disappeared, clever feature-functionality captured our interest, and then disappeared. We went through fads without going through them simply because they couldn’t stick around long enough for the industry to absorb and apply them.
And just as the products appear and disappear, so does the language of the industry – a phenomenon that is even more costly. The hot topic of the day becomes the buzzword of the “informed”. This initiates the fad of the day, stimulates billions of dollars of investment and costs as providers and hospitals dodge and weave to maintain viability and currency of “quality” - and then fades without a foothold or lasting impact to be replaced by yet another fad. Consider Regional Healthcare Information Organizations, Health Information Exchanges, and Accountable Care Organizations. All great ideas - all rarely financially sustainable - and all potential fads. Who will put their life savings into any of these entities?
To me, the trend is clear: the need for open interoperability of systems and availability of standardized data.