In a series of recent meetings, we were struck with what good ideas healthcare leaders had for other parties in a healthcare transaction. Physician leaders had some great ideas, for example, on how health plans could save money and how patients could have a better experience with health plans. It made us ask, “What would happen if everyone viewed a healthcare transaction from the perspectives of others?”
Regardless of where they sit, leaders recognize that our healthcare system, as a whole, continues to add costs faster than do health systems of other nations, and that the trend is damaging for us. U.S. healthcare leaders also are spending substantial time and effort reducing costs within their own organizations. However, we appear to be leaving a considerable amount of money on the table by not also looking deeply at how to help others cut their costs.
Identifying “Quadruple Wins”
A “quadruple win” can occur if the health plan, health system, physician, and patient all benefit from an improvement—for example, from a larger financial margin, less time required for a transaction, a better patient or physician experience, or some other type of improvement.
A quadruple win could occur, for instance, with the recognition that having just one party—a physician’s office, a health system, or health plan—identify and facilitate a patient’s need for ongoing chronic care management would be far more efficient that having all three attempt to do so separately. The information could be shared, the cost could be shared, and the patient could save time. Only a couple of very highly integrated systems currently have this type of coordination.
In one metropolitan area, we found four levels of data collection, protocols, requirements, and care managers for the same population: The efforts were occurring at the health plan level, the clinically integrated network level, the health system level, and the physician level. All four levels seemed shallow, insufficiently related to the patient’s problem, and not strong enough to influence behavior. It would be better to have one initiative done well.
There are countless other examples of potential quadruple wins that could be gained from redesigning how we work across the line of these four groups. Integrated data systems and telemedicine offer numerous opportunities for quadruple wins now, and more new apps and other initiatives are on the drawing board. And it is likely that more opportunities could be identified by organizations committed to continuously looking for them and offering clear rewards for achieving them.
Making Way for a Proliferation of Multidirectional Wins
If we look closely, many healthcare transactions—patient visits, hospital stays, phone calls, and internet communications, for example—present opportunities for reduced costs and improved effectiveness. Some have the potential for quadruple wins; others can lead to more three-way or two-way wins.
So why don’t we have more multidirectional wins? Consider some of the barriers.
A misdirected vision. Few organizations are looking for these types of shared opportunities. We think mostly about wins from our own organization’s perspective. Sometimes, we adopt a two-way perspective because we see an immediate win-win transaction. Often, viewing an initiative from multiple directions is more complicated, and implementing it can present further challenges. Yet this perspective is short-sighted. If all healthcare organizations were to achieve gains in multiple directions at once, the result would change the trajectory of national healthcare costs, with increased benefits for each party.
Thin rewards. Those who could benefit most from a multidirectional effort often don’t see a big enough reward for themselves to justify it. For example, a health plan sees big savings from well-managed care but shares only a small portion of the savings with a health system. Meanwhile, physicians and patients, whose changes in behavior are most needed to reduced rising cost of care, may see no clear benefit from making such changes.
The need to segment before acting. Too often, we think of other organizations as all the same. We know better: All physicians are not the same—and the same is true of health systems, health plans, and patients. Yet we often fail to design initiatives that acknowledge and build on these differences. We can’t identify the win-win-win opportunities unless we understand the segments in the other groups. For example, if we design physician incentives around the average physician practice, we fail to realize potential benefits to be gained from the most efficient or innovative practices.
A lack of trust. Too often, we don’t trust, or even understand, the other parties. Health plans tend not to trust physician offices, for example, and health systems are generally averse to collaborating with health plans. We should find ways to “trust but verify,” and by doing so, we will get to know the other players better and be able to decide when, where, and—in each instance (e.g., regarding specific physicians or patients)—how far we should extend our trust.
The need for a “positive feedback loop.” In a network where there is the pursuit of mutual benefit, every transaction does not have to benefit every party. Yet there should be a common expectation that each party is involved and committed to the good of the group. Thus, beyond simply establishing a network, the objective should be to obtain a series of wins and build trust among leaders that they can rely on each other to maintain a joint perspective. Once all parties share these expectations and commitments, that network can achieve far greater benefits far more quickly.
Key Considerations and Implications
Overcoming the obstacles is not easy. In fact, it can be frustrating. There also could be a need for more refined approaches to legal reasoning—such as more nuanced approaches to antitrust issues. Or there may be a need for greater clarity about differences between consolidation for market power and joint actions for market leadership, and between building trust and colluding.
Such efforts, as difficult as they may be at the start, are important. They will be required to bend cost curves further, which is everyone’s concern. The next round of cost savings will be achieved more easily by reaching out across the health plan, health system, physician, and patient divide than by stubbornly focusing reengineering efforts solely within one’s own area of control. Positive results also will not be achieved without more trust and more data and communications linkages. But the incentive is here: Having one or more networks based on trust and a positive feedback loop can provide a critical competitive advantage. Try it.
Keith D. Moore, MCP, is CEO, McManis Consulting, Denver, and a member of HFMA’s Colorado Chapter.
Dean C. Coddington is a senior consultant, McManis Consulting, Denver.