What the healthcare industry could learn from the airline industry


Greetings from Day 2 of Centricity Live.  It’s been a great show so far…lots of conversations with customers around how they are using Centricity solutions to connect productivity with care and a tremendous amount of positive feedback on GE Healthcare IT’s newly announced mission to be the market leader in Integrated Care Solutions.  It really seems like customers are looking for actionable insight that they can use to enable enhanced clinical and financial outcomes.

I keep thinking back to yesterday’s keynote by GE Healthcare IT President & CEO Jan De Witte.  You can read my first post on that speech here.  In that keynote, Jan told a great story that explained what the healthcare industry could learn from the airline industry.  Let me share a few of the story details.

It starts with complexity.  Airlines have the same complexity of geographical dispersions, elements of high technology, and asset investments as the healthcare industry faces.  Not only that, but both healthcare and airlines require specific domain experience and high labor intensity while operating in a business model where the customer is in the core of the process.

It may be tough to remember—and some of us may have willingly banned it from our memories—but think back in the early 1990s…how tough it was as a customer to:

  • Schedule a flight…remember having to go to a travel agency?
  • Change between two different airlines?  You would have go through a hub more often than not.   If you wanted to fly from New York to Seattle and connect in Chicago, you would have to call two different airlines, coordinate the schedule yourself, and then buy two different tickets—and redo it if you missed a connection.
  • Understand what you were paying for or compare offerings between airlines?  There was no such thing as the price transparency that we all enjoy today on Internet travel sites.
  • Get heard by the airline when you had a problem or concern?

From the airlines’ perspective, they had their own set of challenges.  They:

  • Struggled to operate their network as a network  and optimize the utilization of their capacity
  • Had little understanding of who their customers were—who were their frequent flyers and what did they think?
  • Had limited understanding of their cost, pricing, or load factors.  They only figured out at the end of the year if they were leaking loads of money.  Most of them were losing money, yet they still had no clue where to intervene!

The way airlines operate today is a world apart from where they were in the 1990s.  A lot of that is due to how the airline industry was able to leverage IT technology to change its business model and operate with better quality and productivity.   Information technology allowed the airlines to:

  • Un-silo their reservation systems to create one global scheduling system
  • Operate a network like a network, optimizing schedules through hub-and-spoke flows and optimizing load factors on planes
  • Enable their customer to schedule according to their needs
  • See, track, and reward their frequent flyers
  • Understand their cost  by implementing activity-based costing and activity-based pricing…which enabled them to understand profitability by customer

I’m sure you will agree that the parallels between the healthcare industry and the airline industry are pretty obvious.  In healthcare, we have digitized our systems over the past decade; but like the airlines, most systems struggle to communicate with each other…leading to a poor patient—or user—experience.

In the United States, we certainly know how much to charge for healthcare, but we struggle to collect from all the different payers in the system.  We are just starting to get a foothold in truly understanding what our operating costs are.

And just like the airlines implemented loyalty programs to understand who their frequent flyers were, the healthcare industry is now implementing our version of frequent flyer programs—we call it population health management. But in our industry, being a frequent flyer isn’t necessarily a good thing.

I’m curious to see what other parallels you see between the healthcare industry and the airline industry.  Shoot me an email with your thoughts.

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