There ain’t no rules around here…

Rishi Saurabh

I was recently reminded of a conversation between Thomas Edison and a new employee. When M.A. Rosanoff joined Edison’s laboratory, he asked “Mr. Edison, please tell me what laboratory rules you want me to observe.” Edison responded by saying “There ain’t no rules around here. We’re trying to accomplish something!”

One can draw a parallel between Edison’s laboratory and the current state of healthcare institutions. We can only imagine the challenges facing the executives managing this laboratory! How does an executive decide which experiment to focus resources on? What trade-offs need to be made in order to ensure his/her laboratory functions properly? Does he/she have the liberty to afford big failures?

It is next to impossible to navigate the wave of change in healthcare, without having a simple framework that can help execute. The proposed framework categorizes the various changes into 3 big buckets: Social Pull, Technology Push, and Enabling Enterprise forces[1].

Social Pull

Social pull is probably one of the most powerful forces to keep in mind. Fundamentally, social pull defines the expectations of different roles in the healthcare industry-patients, doctors, administrative staff, vendors, suppliers, and any individual directly or indirectly associated with the provider institution. Consider this force as a complex calculus with multiple variables. One way to simplify the equation is to reduce the number of variables-best if we could reduce it to one. Successful leaders of healthcare institutions prefer to work with only one variable-Patient. It makes sense because everything/everyone else surrounds the needs of the patient. Some of the recent forces that have surfaced are: easy access to providers, safe and confidential access to medical diagnosis and data, reduced financial burden, and above all need for right treatment at the right time.  I have personally found patient-centered care improvement guide provide a good list of top needs. Moreover, Hospital and Health Networks (H&HN) provides a good way to segment these patients into behavioral buckets

Technology Push

It is my personal belief that evolving technology will push healthcare institutions to re-design their business models. One cannot ignore the daily advent of new technology that confronts us. In other words, there is a strong “push” from the high-tech environment that healthcare executives need to be cognizant of. On the other hand, it is also important to apply a filter and absorb technology that makes sense to the institution needs. One way to look at new technology trends is to weigh each trend against a value-add to the provider institution. There are three questions that an executive could ask to understand if the new trend fits his needs:

  1. Does the new technology help my organization become more efficient across the enterprise? Or does it add more complexity into the business processes?
  2. Does this technology help address the needs of the patients and/or regulatory bodies?
  3. Does this technology help grow my bottom-line?

Often it is hard to justify the need of a new technology unless a thorough analysis of “before” and “after” scenario is done.  On the other hand, it is kind of obvious that technology is one of the best levers healthcare institutions have to solve some of the top challenges of the healthcare industry.

Enabling enterprises forces

Fundamentally, the concept of value chain- as perceived in the traditional business models does not exist anymore. The concept has evolved into a “value network”. The rationale behind this shift can be attributed to the need for different players in the ecosystem to collaborate with each other to deliver high quality patient care at an affordable cost. The different players in this value network make up the enabling enterprises. Specifically in the healthcare industry, two players dominate this segment: Government and Payer. These players enable (or sometimes disable) the ecosystem to perform its best. Irrespective of the motivation, healthcare institutions need to comply with the forces imposed by these players.

As an executive of a healthcare institution, you need to keep a close watch and to a great extent partner with these enabling enterprises so as to create an environment that enables delivering higher quality care at an affordable cost. Some of the forces acting on the ecosystem are: Accountable Care Organizations, Payment Reform, Affordable Care Act, Payer-provider consolidation, growth of tiered networks by payers, and many more.

Each of the three forces has a handful of sub-forces acting within it. Healthcare institutions need to figure out the most powerful sub-force within these forces and then do a due diligence on which of the three forces entails stronger management focus. It is fascinating to observe a highly regulated industry left with little guidance on how to manage the new era of change. Similar to Edison’s laboratory-healthcare institutions are better positioned for innovation in the absence of rules. Each healthcare institution can now be more agile in reacting to three forces that circumvent them. End of the day: one who embraces uncertainty and can still act decisively will be the leader.

[1] Source: Social Pull, Technology Push and Enabling Enterprises is based on concepts taught in Managing Technology Intensive Enterprise course at Babson College by Prof. Anirudh Dhebar and Prof. Martry Anderson

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