Transcription
Michael, thank you very much for taking your time.
My pleasure. Me too. Stuffy, what was that? Triggered your interest in health care? This has not been your field historically.
No, it hasn't. You know, it's, it's a very personal story, I think, which almost everybody has one of those stories. In my case, Elizabeth Iceberg, who was the co-author that I've written much of my work with, you used to be a strategy professor here at Harvard Business School, and Elizabeth had not one but two children that had some serious medical issues. And as, as her supervisor, I, we talked for many, many hours about what she was going through and, and, and, and the dysfunctions of the healthcare delivery system. And it was out of those discussions and her personal journey that we, we got fascinated with what was really going on here. And, you know, of course, I'm a competition professor, you know, at the core, and, and I'm a true believer in competition. I think competition is good. I think it's one of those forces that, that allows human endeavor to be better. But in health care, it seemed to not be working. And so for me, it was a great puzzle.
Well, what fascinates me is it's an industry with an extraordinary amount of, you know, highly qualified individuals, very smart people, right? Who, you know, have been trained, educated, and have lived their lives in the system, and who are known to be innovative. We have an innovation of biomedicine. Is, yeah, you know, it's fantastic. How come we haven't, you know, gotten further in spite of all these qualified individual assets?
Well, I would add a few things you said. First of all, I agree with everything you said. And I would also add that, that these people work hard. It's not lack of effort. It's, it's not lack of commitment, even. And, and so all the normal reasons why something fails or something isn't what you hope it is, I don't, those don't apply here. I think it comes from ultimately putting our medical professionals in a system which doesn't allow them ultimately to be successful. And the other thing I've come to see is that people in medicine really are test. They are trained as scientists, and they're trained in a sense, very narrowly. They're trained to look very specifically at, at particular procedures and particular interventions and particular drugs. The whole notion of the clinical trial, you do a very tightly controlled study, you have one endpoint, you, you, you really carefully design your experiment to make it a really great experiment. That mindset, I think, has simply reinforced the system the way it is today. What, what people like me are used to doing is, we're, we're used to stepping back and looking at the system as a whole. We're used to understanding that, that there's this complexity of how you integrate all of these interventions that ultimately determine success. But that kind of training, that kind of expertise, that kind of background has really not been present in this field.
One of the observations I've made when I looked at this in Sweden is that with the cost pressure that we have, many physicians are asked to focus a lot more on cost than they feel, you know, very comfortable with. You, and my sense is that people become, you know, cynical, disengaged rather than engaging in change. They've, they've moved away from it and feel it's a force that they simply, you know, it's others who are forcing this on them, not being engaged together. Do you see that value-based healthcare would, will address that?
And, yeah, I think it does. I mean, I think that one of the probably the starting principle of value-based healthcare is that the right goal is value, not cost. That it doesn't make any sense to save money by removing, reducing outcomes, because we know that the most powerful driver of costs in the long term actually is good outcomes. That is, if we get patients healthy, if we get them healthy faster, if we provide them with better functionality, that's the way to save money, not to have an office visit in 13 minutes instead of 15 minutes so we can do more patients per day. That's the wrong way of looking at the problem. I think most physicians that I talk to are, you know, perfectly aware that we have to be efficient. You know, and we don't have infinite resources, and we can't, you know, we can't, we have support, you know, we can't have 50% of the national budget healthcare. So it's not fair against efficiency. But what they are against is sort of efficiency for its own sake. And I saw, I think the value framework has been, has been getting a lot of traction, I think, among the provider community because it really puts the focus where it really should be. So I think we've had sort of a zero-sum competition in healthcare. People have been trying to get more money from, from the other guy, get higher reimbursement, push down reimbursement, pass costs to the patients, you know, pass cost to the government. That's not been anywhere near the way forward. Now, I think we're trying to create a positive-sum competition where if we can prove value, everybody benefits.
No, I, we did a case study in one of the Swedish hospitals that were ranked very poorly on, on myocardial infarction. So we interviewed the physicians, the nurses, went and, and, and asked them what happened when you were ranked as poorly as you were. And in fact, the response was, you know, this brought us together. Mm-hmm. You know, we were challenged with the delivery to patients, and we got together and we improved it. Within a year, this hospital reduced mortality by 50%. Yeah, that's a very dramatic change. But it was no, not a negative change. It was a positive. It was a positive. They felt it was positive. Yeah, they're teaming together with something that cared about, right?
Well, you know, it's very, very parallel, right? And, and the, and the literally, the, the central driver of value improvement is outcome measurement. And I would say, not only is this apparent in this wonderful work that you've done, which I think is really breaking new ground, but all the other work that we have available is, it shows the same thing. For example, in the United States, we have stumbled into outcome measurement in only two areas that are really comprehensive. One is transplant, organ transplants, where we have universal measurement because in order to get an organ to transplant, you have to guarantee that you will report your outcome. The second area is more of an odd case, it's in vitro fertilization. Once again, there's a federal law, every clinic has to report every case to the Centers for Disease Control. And if you look at what's happened, I mean, the minute they started reporting the outcomes, and those outcomes started getting transparent, the improvement process took off. And it just happens every time. It's a law of nature. It's the force of gravity.
When Sweden is a small and quite homogeneous market, but do you think the, how relevant are some of these analyses for, you know, for the US and other larger countries too?
I think these analyses are universal. I've now had the opportunity to work at some level of depth on healthcare delivery in, yeah, I'm not going to remember all the countries, but certainly in the US, certainly the UK, certainly Sweden, Denmark, Finland, Japan, Taiwan, and, dot, dot, dot. And, and what I find is, although insurance is very different in different parts of the world, the problems of delivery are virtually identical. I mean, you, if you literally had a blindfold and that you, you know, you didn't know where you were, they took you into a hospital, and it could be Germany, could be Japan, it would look the same. Because of the organization of care, and many of these issues are a function of the same fundamental level of training, the same way that medical science has developed, the same way that physicians are, are trained in medical school and residency programs. So these issues are universal.
When you look at US healthcare reform, to which extent do the efforts made now, laying the foundation for value-based healthcare? The bill itself doesn't specify very much. It has some concepts. I myself, with our team here at the Institute, was able to get a section of the bill on outcome measurement. And so there's a placeholder in there, which is essentially directs the Secretary of HHS to do something. There is some interesting stuff there on these accountable healthcare organizations that could actually be a vehicle for getting integrated practice. So I think, I think, I think we've started down the path. We have a new head of Medicare, Don Berwick, who has been one of the pioneers and in quality improvement in healthcare. So the mindset is there. So I'm optimistic that as we get into the details, and we now get below the political radar, and that we can make headway.
What would you say are the three most important barriers for this?
The first barrier is, is, is really to kind of change the mindset and, and really understand how to look at the problem from this different perspective. And, and, you know, for example, I still see a lot of people making the mistake of thinking that the problem is cost reduction and not value improvement. We have a critical lack of both outcome data still, and also a critical lack of really cost understanding. One of the fascinating things that in the work I've been doing recently is that, you know, in a field that's been preoccupied with cost for 30 years, we actually know very little about cost in a way that's relevant to actually delivering better care. Because of the way we measure cost, because like so much in healthcare, it all fits together. We organize around interventions, we measure around interventions, we accumulate costs around interventions. But that's not relevant for understanding value for the patients. So I think a lack of some of the, you know, fundamental data and knowledge about the value equation is a barrier. And then I think that we still have a lot of misalignment of the stakeholders because the incentive structure is still tending to pit one party against another.
So on the US healthcare system now, if the value, the value component isn't brought into the reform the way you, you're hoping it will be, nothing all we do. How would the US healthcare, what would it look like 10 years from now?
Uh, we will simply have exploding costs of dealing with all of the people that are going to have to be addressed, both the older people that are going to have more needs and the new people that are going to have access. And if we don't have, how are you thinking we are going to deal with that excessive cost? In a brutally ineffective way, it will, we will do just read them reimbursement cuts, and we'll start having to ration care, and all the awful things will start to happen. What we now desperately need is more evidence, more data on the outcome side, and, and more evidence and data on on the cost side, and more evidence about the impact of outcome measurement on progress. And we've got to kind of accelerate the development of that. And as, as, as you and I have actually talked before, there's a lot of reinvention of the wheel going on, particularly as we look across the world. So I think the ability to pull together what's known about outcomes in 10 or 12 or 15 or 20 of the most important medical conditions will be an enormous accelerator for progress. But you, because people, I think, once they've seen that, oh, these are the 10 measures that most people use, that all of a sudden they don't have to go through some agonizing process, and they can just get on with it.
Yeah. Sorry. Exciting. Michael, thank you very much for taking, taking time. I've enjoyed this. Inspiring. Special. Yeah.
My pleasure. And it's just been a pleasure to work with you and congratulations on the enormous progress you're making both in Sweden and elsewhere. Thank you.