The Daily Beat

What you should care about in healthcare today, from the editors of Becker's Hospital Review

Best practices don't matter. Here's what does.

High-reliability organizations don't implement best practices. They continually make new best practices.

Healthcare is an industry obsessed with best practices. And for good reason. Our costs our growing almost uncontrollably, and quality is highly variable from hospital to hospital, department to department and physician to physician. It makes sense, then, that organizations seeking to improve a measure would look to those who are top performers and emulate their processes.

However, instituting best practices isn't the approach taken by the highest-performing organizations.

What is?

To answer this, let's examine Toyota, the company whose efficient and adaptive practices have led to millions (if not billions) of consulting dollars spent by others who want to learn just how they do it.

Toyota doesn't worry about implementing best practices. Instead, it worries about adjusting and improving current practices in real-time — and doing so continually.

"The focus at Toyota is not to implement standard best practices across the organization," John Kenagy, MD, who studied Toyota in the 1990s while at Harvard Business School, recently told me. "Unpredictable changes in local environments between production facilities and even micro environments inside the same facility create opportunities to continually improve the current 'best practice.' Therefore, Toyota has standard ways to continually create new best practices."

He recounted how one of his Toyota teachers explained the approach to him:

"We know we cannot implement perfect processes because, first of all, we are human and humans aren't perfect. Secondly we know that, even if we design a perfect process, the environment will change around that process in unknown and unknowable ways. Therefore, although we work hard to design the best process possible, it is much more important for us to know when our processes fail and then improve them or the environment around them as quickly, simply and easily at the lowest-cost possible." (emphasis mine)

Ensuring high-reliability and, moving beyond that, innovation, is not implementing best practices. It's the ability to continually make new best practices.  

But, says Dr. Kenagy, 95 percent of established organizations are unable to 1) identify process failures or opportunities for improvement and 2) adjust and improve on the front-line, in real time.

What distinguishes those who can from those that can't?


CEOs love talking about culture. Here's why they shouldn't.

Attributing organizational success to culture doesn't help anyone, because no one knows what culture is.

Ask CEOs in any industry their secret to success, if their answer isn't "the people," $100 says it includes the word "culture." In one edition of Wall Street Journal's "The Experts" column on the five biggest priorities for CEOs, culture is mentioned 15 times!

But what the heck is "culture"?

Apparently, academics have some 164 definitions of culture. Don't worry though, you don't have to read them, let me summarize: Culture is the implicit and explicit patterns of behavior, structures, beliefs, values, symbols, customs, etc., that are shared by a group or society.

So I'm a CEO of an institution that's struggling. We aren't making our numbers, morale is low and there are service or product errors.

I seek out the help of other CEOs. They tell me I must improve the culture.

That doesn't really help me.

"Everybody says it's the culture, but what is the culture?" asks John Kenagy, MD, founder of Kenagy & Associates and a former practicing physician who has studied change management for more than two decades. "Culture is such a meaningless term; it really dodges the issue. Nobody's talking about what it is."

What is 'culture'?
According to Dr. Kenagy, culture, for all practical purposes, can be approached as the sum of four things: mindsets, methods, strategies and structures (which he's dubbed 'M2S2' for short).

That is to say, the M2S2 of your organization are tangible elements of the culture, that when taken together make up the culture — an idea that is a lot less tangible take by itself.

Let's return to my example of the struggling CEO. While he or she can't do a lot with "it's culture," he or she can certainly implement or adapt the M2S2 of like, successful organizations into his or her own.

So, what mindsets, methods, strategies and structures should successful in healthcare organizations develop?

According to Dr. Kenagy, the most successful organizations — those able to weather rapid change and market disruptors — are those that have adaptive cultures. Therefore, organizations should seek to implement M2S2 that support and create structures and processes to foster a culture that adapts quickly to change.

Cultures must support adaptive change
Why is adapting to change so important? To understand this, it's helpful to explore the theory of Disruptive Innovation, the popular change management theory advanced by Harvard Business School's Clay Christensen, who Dr. Kenagy studied with as a visiting scholar from 1998 to 2002. Under the theory, organizations that don't introduce innovation will be disrupted by it.

However, Dr. Kenagy has advanced his own theory, 'Adaptive Design' that argues against the 'disrupt or die' mentality. Instead, he believes organizations can adapt, successfully, to disruptive innovations from competitors or other market entrants.

"Disruption gives you this kind of view of 'boom!' and it's actually not," he says. "Innovation is going to happen, and it will either be disruptive or adaptive to your organization. It's your choice as a leader to be disruptive or adaptive. It's more about what the change is doing to you."

Organizations can succeed in the face of disruption if they adapt quickly — which requires leaders with savvy change-management skills.

Adaptive change doesn't sound revolutionary, but it sort of is
To become an adaptive organization, leaders must support instituting the structure and processes (that is, M2S2) that foster active adaptive change, which is characterized by the ability to change your organization's processes or procedures quickly and appropriately in the face external market forces.

The problem is, most organizations are ridiculously bad a responding quickly to business changes. Why this is involves a quick history lesson. During the Industrial Revolution, businesses that succeeded were the ones that were best able to organize workers and their responsibilities through a hierarchical structure. Managers directed work, and the front-lines carried it out. Management decides, measures, analyzes, improves and controls front-line work. Bigger problems move higher up in the organization.

But, what worked in the Industrial Revolution, doesn't work today. Organizations have so much data that management can't move quickly enough. "Moving data up is just too slow of a process and too inflexible," Dr. Kenagy says.

Instead, organizations must implement M2S2 that enable and empower front-line workers to make and implement decisions on how to improve their work, and to do so in a way that creates a new "value" for the organization.

Essentially, the organization moves away from traditional management (where decision making is sent up the chain) to one where decisions are made and data is analyzed on the front line, by those that are doing the work and know it most intimately. There are no managerial pow-wows to first assess the potential impacts of change or prioritize which have the biggest ROI potential. The ability to change the organization shifts from a top-down approach to a bottom-up one.


How Google searches reveal our country's stark healthcare disparity

If you've never Googled a healthcare service, you may want to consider your life — or your community — fairly comfortable.

That's what some findings from the The New York Times suggest, anyhow. Back in June, the newspaper identified American counties where life is "hardest." This categorization is based on six data points: education (or percentage of residents with a bachelor's degree), median household income, unemployment rate, disability rate, life expectancy and obesity. The 10 lowest-ranking counties in the country include six in the Appalachian Mountains, along with four others in various parts of the rural South. On the other hand, six of the top 10 counties in the United States are in the suburbs of Washington, D.C.

The variation between these "hard" counties and those deemed relatively "easy" is staggering. Median household income in some counties is five times higher than median income in others, and median life expectancy can vary up to a decade. (Here's the composite ranking and commentary, with an infographic that is pleasingly easy to navigate, too.)

This week, the Times team used Google Correlate to see how web search trends differ among counties. The analysis used a decade's worth of Web search data to pin down which terms are popular in places where life is easier versus those where life is more difficult. The analysis canceled out those terms that are popular throughout America, like "Super Bowl" or "Oprah Winfrey," and focused on subjects that were relatively common Web searches in one county but not common in another.

So what'd they find? Well, people in the easy-breezy parts of the country sure love their cameras, or searching them on the Web at least ("if you don't recognize some terms on here, they are probably digital cameras," the Times noted). Maybe an easy life is more photogenic. Some other common searches include ipad applications, dollar conversion and baby bjorn. Best cupcake also shows up near the middle of the list.

Many of the terms center around technology, photography, travel and products (oven review or ipod remote). Oddly, the Ben Stiller classic "Zoolander" comes up twice out of 90 times. Healthcare terms are noticeably absent.


Uber's 3 innovation lessons for healthcare

If you near a large metropolitan area, you've no doubt heard a lot about Uber, the ride sharing/taxi competitor, recently.

Uber, which launched in 2010 in San Francisco, allows users to book a private — "black," the terminology used by the company — car through a smartphone app. In 2012, it began to allow users to book taxis through the app, and in 2013, it launched uberX, which lets users to book rides from regular Joes and Janes in Joe and Jane's personal vehicles (they've been pre-screened by the company).

The taxi industry hasn't been the same since.

Uber is significantly changing the market, with users in major cities flocking to the app for its lower prices and convenience (no waiting on the corner to hail or cab). In fact, CNBC named the company as one of the top 50 Disruptors in 2014.

Cabbies and other opponents to the service argue the company circumvents taxi regulations, and cities and states across the country and globe are looking to ban Uber, and its competitor Lyft, from operating within their boundaries. In June, Virginia regulators sent cease and desist letters to the two companies alleging they were violating state motor vehicle laws, and taxi drivers in Boston, London and Barcelona have balked, in some cases even going on strike, over the app's alleged ignoring of transport laws. In response, Uber has cut its fares in these cities to further drive use of the app.

Some governments have been more supportive. Colorado formally authorized ride sharing services but did so with certain regulations to protect users included. Here in Chicago, similar regulations have been advanced by City Council, though Uber supporters say they are too strict — for example, the companies would need to obtain city approval for driver training, and drivers with over 20 hours worked per week would need to obtain chauffeur's licenses, according to a Chicago Tribune report.

Don't call Uber a "disruptor"
But, is Uber really a disruptor?

I've done a fair amount of writing on the topic of disruption vs. adaptation recently (see "Steve Jobs didn't disrupt, he adapted. So should healthcare"), and I've come to the conclusion that Uber isn't really the disruptor everyone claims it to be.

Certainly it is disrupting the taxi industry, but its disruptive effects are byproducts (largely unintentional) of how it has adapted to competitors and other market forces.  Uber

Take, for instance, that its initial launch wasn't all that disruptive: It created an on-demand app to connect chauffeurs with customers. It simply improved on the current way to book car service, using technology.

In its next iteration, it merely expanded who could use the app to accept rides, extending it to cab drivers.

Enter disruption, and it's name is Lyft
At roughly the same time San-Francisco start-up Lyft created a ridesharing app to allow non-professional drivers to connect with city residents in need of a ride. In return, the rider could give a driver a "donation" for their services through the app.

This was disruptive.

The trouble was — at least for Lyft — Uber quickly adapted, launching its ridesharing service a year later. For Uber, it's didn't hurt too badly not to be the first ridesharing service on the scene. Instead, it lucked out by having an established network of drivers, brand recognition and a growing user base that Lyft struggled to find in cities outside San Fran. To wit, Uber was recently valued at $18.2 billion, while Lyft is valued at $3.5 billion.

How is Uber winning the rideshare — not to mention, transportation war — without being truly disruptive? [tweet this]

3 lessons for healthcare
There are three key reasons, each of which can serve as lessons to the healthcare industry — another industry ripe for disruption.


The 3 words that will motivate your employees

Healthcare leaders understand that the ability to drive an organization toward its goals lies in the ability of each level of management to motivate the level below it — to empower others to perform certain behaviors or meet certain benchmarks.

But how does a manager motivate?

Most research suggests that the answer lies in figuring out what external and intrinsic motivators are impactful for your employees.

But what motivators are impactful?

Answering that question is also complicated.

Management guru Daniel Pink, for example, has argued that external motivators aren't useful in driving employee performance. However, anyone who has offered a financial incentive to employees for meeting a certain benchmark and then sees improved performance on that benchmark would question that assertion. While we don't want to pay employees to perform (we want them to do it without dangling money or awards), many of us have seen it work.

Is providing external motivators bad? Does it take away from the more powerful instrisic motivators we so desire in our employees?

According to employee engagement expert Bill Sims, Jr., providing external and internal motivators aren't mutually exclusive. In an interview with me earlier this year, he discussed the idea:

"Pink believes that it will somehow rob you of your internal satisfaction for doing the job. If we applied his logic across the board, students should never be awarded college scholarships (because that will rob them of their desire to study). Brain surgeons should make no more than dental technicians, since they are robbed of their internal joy by being compensated for performance. The Pink logic doesn't really hold up here. The studies he quotes, many of them the work of Edward Deci, have been examined by other psychologists who have found that external positive reinforcement does increase performance, and it does so without any degradation of internal drive or motivation."

One might surmise then that managers can best motivate by tapping into both external and internal motivators.

How do we tap into intrinsic motivators? External ones are easy — give incentive money, create employee rewards, offer praise. Tapping into internal motivators is less cut and dried.

However, Heidi Grant Halvorson, PhD, associate director for the Motivation Science Center at the Columbia University Business School, suggests one element of intrinsic motivation is a concept called "relatedness." In a column for Harvard Business Review, she writes:

"The feeling of working together has indeed been shown to predict greater motivation, particularly intrinsic motivation, that magical elixir of interest, enjoyment, and engagement that brings with it the very best performance."

How does a manager create relatedness?


Wal-Mart is now a primary care provider — There are only two ways to respond

Wal-Mart plans to open a dozen primary care clinics within a small number of its retail stores by the end of 2014, according to a New York Times report from last week.

The retailer has opened five primary care clinics in rural markets in Texas and South Carolina, and will open a handful more by the end of the year — a move suggesting the retailer is getting more serious about playing in the healthcare arena. The openings of the five existing clinics didn't receive much media attention, perhaps, as Dan Diamond, managing editor at The Advisory Board Company surmises, because the clinics are located in smaller healthcare markets, like Sumter and Florence, S.C.

Why this play is different

Wal-Mart currently leases out space in roughly 100 of its stores to health systems, but the discount giant says the clinics it plans to operate will offer more comprehensive services beyond those — such as chronic disease management — that its leased facilities do, according to the NYT report. Plus, it can do so at a lower cost.

Wal-Mart is explicitly marketing the clinics as "primary care" service locations, writing on its website that its "expanded scope of coverage enables us to be your primary medical provider." [Emphasis mine]

This differentiates the clinics from those in CVS and Walgreens, which offer a limited number of retail-based urgent care services.

For Walgreens' part, it announced last year it would offer expanded services, like chronic disease monitoring, at its 400 clinics across the country, but the company does not "market the facilities as primary care clinics, a spokesman, John Cohn, said, adding that the company 'strongly' encourages patients to seek continuing care elsewhere," according to the NYT report. Walgreens also recently launched a consumer-friendly app for tracking health behaviors, and will reward users with vouchers for purchases (See: "Is Walgreens doing more for population health than you?")

The move by Wal-Mart to significantly expand its primary care offerings at its rural locations "within seven years," according to an announcement the company made last year, also represents diversification efforts by the retailer, which has experienced declining sales in the past five quarters.

Why the move should worry you
Wal-Mart's explicit foray into primary care should be concerning for existing healthcare providers on its own (after all the brand is known for wielding its market power to drive down costs), but also because it won't partner with local health systems, like Walgreens' Healthcare Clinic and CVS' MinuteClinic have done.

"Walmart also says it will be better off working with just one partner, QuadMed, instead of multiple partners that each run a handful of clinics, which was the model used in its acute care clinics," explains the NYT report.

Instead, it's selected one partner — QuadMed — to staff its clinics with mid-level providers and supervising physicians. QuadMed, which was launched in 1991 by a printing company executive fed up with rising employee healthcare costs, has traditionally staffed and managed employer-based clinics.

Plus, Wal-Mart clinics are conveniently located and cheap.

Always low prices, and definitely lower than yours  
Wal-Mart's new clinics will not accept private insurance — though a company spokesperson told the NYT it is exploring the option. Instead, it will charge just $40 per visit — the same amount many insured pay as a co-pay. It also accepts Medicare and plans to accept Medicaid at certain locations. But here's the kicker: It's roughly 1 million employees can receive services for just $4 a visit! That's something to take note of: If your health system is treating Wal-Mart workers now, it will probably treat fewer and fewer (at least for primary care services) in the years ahead.


Something deadlier than Ebola, already in your hospital

Ebola has been called "the scariest virus" in existence, and for good reason. As described in the 1994 book "The Hot Zone," by Richard Preston (which I read, with horror, more than a decade ago), Ebola attacks its victims like no other known virus.

In the first chapter, which Stephen King called "one of the most horrifying things I've read in my whole life — and then it gets worse," Preston describes the virus' attack in one of its first victims, a man named Charles Monet:

"Monet maintains silence, waiting to receive attention. Suddenly he goes into the last phase. The human virus bomb explodes. Military biohazard specialists have ways of describing this occurrence. They say that the victim has "crashed and bled out". Or more politely they say that the victim has "gone down". He becomes dizzy and utterly weak, and his spine goes limp and nerveless and he loses all sense of balance. The room is turning around and around. He is going into shock. He leans over, head on his knees, and brings up an incredible quantity of blood from his stomach and spills it onto the floor with a gasping groan. He loses consciousness and pitches forward onto the floor. The only sound is a choking in his throat as he continues to vomit while unconscious. Then come a sound like bedside being torn in half, which is the sound of his bowels opening and venting blood from sloughed his gut. The linings of his intestines have come off and are being expelled along with huge amount of blood. Monet has crashed and is bleeding out."

Ebola attacks its victims quickly. Symptoms, such as fever, weakness, diarrhea and vomiting, generally occur 8-10 days after exposure. Most patients recover or pass away within 6-10 days of symptoms appearing.   

While Ebola attacks its victims in a horrific manner, it's important to remember that it's a relatively rare virus. Since its was discovered during two simultaneous outbreaks, in Sudan and the Democratic Republic of Congo, in 1976, there have been 25 separate Ebola outbreak incidents, all in Africa, totaling 2,621 deaths, according to the World Health Organization.
No doubt the severity of the virus' impact on the human body is one reason for such world-wide interest in its outbreaks, along with fear that the virus could spread outside Africa.

News of Ebola is on every network and newspaper I've read over the last few weeks, and rightfully so — the story is of great public health interest, but as I watch and read the numerous reports on the virus, I can't help but think that there's something much deadlier than Ebola affecting American hospitals everyday: medical errors.

While medical errors don't have a death rate anywhere near Ebola's 70-90 percent, in volume, they are deadlier than the scariest virus on earth.


Off to the Congressional races: How Obamacare is hurting Republicans and Democrats alike

In the Red state that beat Obama at enacting a very blue law, it's healthcare that's most closely watched.

The potential loss of a long-time Republican Senate seat to a Democrat in a mostly Red state is of national interest, but it should be even more of interest to those of us in healthcare, because healthcare reform — and the politics surrounding it — is one of the biggest issues at play in the race.

Political junkies are closely watching Congressional primaries across the country, and today all eyes are on the Senate GOP race in Kansas.

Yet, what I expect will be one of the most exciting Congressional races come November got a lot of press coverage over the weekend, as incumbent Senator Mitch McConnell (R-Ky.) and challenger Alison Grimes (a 35-year-old Democrat who currently serves as Kentucky's Secretary of the State) met at one of the state's most historic — and politically charged — events, the Fancy Farm church picnic in western Kentucky.

The potential loss of a long-time Republican senate seat to a Democrat in a mostly Red state is of national interest, but it should be even more of interest to those of us in healthcare because healthcare reform — and the politics surrounding it — is one of the biggest issues at play in the race.

Kentucky, a Red state which ranks as one of the top five unhealthiest states in America, launched its state-run marketplace, Kynect, last fall. Since then, "Kentucky has pulled in 521,000. That’s an astounding 82% of the state's uninsured population, a percentage far above the national totals," wrote journalist Steven Brill in a recent TIME

(You may remember Brill for his 2013 TIME article, "Bitter Pill: Why Medical Bills are Killing Us." The article brought national attention to the large variation and mark-up within medical bills across the country. After it, CMS to released data on the 100 most frequently billed inpatient charges and 30 most common outpatient charges, finding large variation in hospital prices from market to market. North Carolina and Arizona enacted laws requiring hospitals to post chargemaster prices of their most common procedures.)

But, back to Kentucky…

Don't call it Obamacare
The state successfully insured 82 percent of its previously uninsured residents through Medicaid expansion and the private plans offered on its marketplace — nothing short of a true success story. 

Republican Governor Steve Beshear, who supported the state's marketplace development and Medicaid expansion, became the poster boy for the law, having succeeded where the feds did not.

But, unsurprisingly, many in his party criticized his decision to carry out reform. Still today, half of the state's residents want to repeal the law (perhaps not realizing their coverage, and subsidies, could go with it).

Yet, Beshear hasn't seemed to suffer. A recent Herald-Leader/WKYT poll gave him a 54 percent approval rating, and he's had one as high as 69 percent in the last four years.

Perhaps this is the reason why: He had the foresight to take Obama out of Obamacare before rolling it out to Kentuckians.


Why Apple, Epic and IBM will take over healthcare

The three will emerge as healthcare's ruling triumvirate. Here's why.

Apple and IBM recently announced they were putting aside their 1980s rivalry to come together to develop a new set of business-facing mobile apps for iOS powered by IBM's big data capabilities and enterprise platform expertise.

One of the new partnership's main focuses is healthcare, says IBM's general manager for the public sector Dan Pelino. The healthcare-focused apps that will come out of the partnership will "make patient information mobile, and it will be safe and secure," he says. "It will be enterprise solutions that take advantage of the mobile device [iPhones and iPads] and the security and scale IBM is known for."

The partnership brings together two companies that have been rapidly expanding their presence in the healthcare industry. Beside being "under the covers" of many health IT system implementations, IBM has been working with several healthcare providers to use Watson's natural-language processing capabilities to improve care delivery with some impressive results, and has offered some healthcare app developers access to Watson's application programming interface to expand the use of the technology.And Apple recently announced HealthKit, a consumer-facing mobile health-tracking platform able to integrate with other health apps and monitoring devices to help users more easily monitor their own health.

What has made both companies' forays into healthcare that much more formidable has been their close relationships with Epic. Epic has partnered with Apple before on EHR apps and worked with Apple on HealthKit, paving the way for providers' Epic systems to integrate with the platform and opening up possibilities for remote monitoring and care coordination. IBM, already involved in about 80 percent of Epic implementations, recently tightened its ties to the electronic health record giant when the two announced a joint bid for the Department of Defense's EHR modernization contract (according to an InformationWeek article, a feature of the bid is iOS support).

Mr. Pelino is quick to clarify that Epic is not an official part of the new Apple-IBM partnership, though says the three companies will continue to work together. And together, I think they will emerge as healthcare's new leaders.


Steve Jobs didn't disrupt, he adapted. So should healthcare.

Healthcare is poised for disruption, and if the leading theory on disruptive innovation holds true, the leading organizations in the industry today will not be the ones to bring about that disruption.

But as I've written previously on this blog, that doesn't mean all existing organizations will perish. In fact, as I read more on Clay Christensen's theory of disruption and change management in general, the less I believe in the idea of 'disrupt or die.' 

The industry will no doubt be disrupted, but it's false to believe that all but the disruptor will be relegated to failure.

Instead, those that succeed and those that fail will be distinguished by one thing: how they adapt in the face of disruption.

As disruption changes the industry, the organizations that will continue to thrive will be those best able to adjust their business models and practices to industry changes and external threats.

Consider Apple and Microsoft. Today, Apple is known as the disruptor, maker of such innovative technologies and the iPhone and iPad. Microsoft, which had decades of success as a software stalwart, recently announced it will lay off 18,000 workers as it shifts from a "devices and services" strategy to a "productivity and platform company." 

Yet, Apple wasn't always on top. In the 1990s, after the departure of its founder Steve Jobs, Apple was faltering. Microsoft, on the other hand, was the bell of the tech ball, having launched its Windows 95 in 1995 with 7 million copies sold in five weeks

Jobs was brought back in to revitalize Apple, and revitalize the company he did. In 1998, Apple launched the iMac — the first personal computer without external storage, and a fun, colorful design. Some would argue the iMac was disruptive, and in some ways it was. In other ways, it was simply the next iteration of the personal computer — an adaptation, albeit a bold one, to its Macintosh introduced some 14 years prior.

Adaptation is a word that is used often by John Kenagy, MD. Dr. Kenagy has become a prophet of sorts for the power of adaptation in healthcare, studying under Clay Christensen at Harvard and later introducing the theory of "Adaptive Design." The theory is essentially a set of principles, specific to healthcare, to help organizations successfully adapt in the face of change — and do so in a way that delivers exactly what the patient needs, all while lowering the cost of care.

A practicing physician for many years, Dr. Kenagy didn't worry too much about organizational culture and processes until he broke his neck. Yes, you read that right. After a fall while climbing a tree with his young son, Dr. Kenagy's months-long recovery allowed him to observe breakdowns in healthcare firsthand. He entered management after the accident, and while studying management at Harvard, was exposed to the principles of the Toyota Production System — the principles of which serve as the foundation for Adaptive Design.

Two pathways of innovation
Disruptive innovation and adaptive design are different ways of approaching the same idea: innovation. They represent "two pathways of innovation," says Dr. Kenagy.
"Rather than calling innovation disruptive, I believe innovation is an adaptive process," he explains.

When disruption comes from an outsider, an adaptive culture can adjust its organization so it can continue to find success, even if it's under a new world order.  

What separates those that can adapt from those that fail?