Why Decision Making at the White House is Easier Than in Healthcare

Earlier this week I had the pleasure of meeting with Mike Leavitt, the founder of Leavitt Partners and former secretary of the HHS as well as a three-term governor of Utah. We met to talk about the opening of his firm’s new Chicago office, and discussed healthcare trends, the impact of healthcare reform and the future of healthcare.
Gov. Leavitt talked his rationale for founding Leavitt Partners, explaining that he was struck by the level of uncertainty in the industry and the challenge facing healthcare leaders of “decision making with imperfect information.” He contrasted that with his days in the Bush Administration, when he received briefings on global news and threats. Developed by the CIA, the briefings pulled fragmented data from various sources and synthesized it, providing actionable information to decision makers.
Today, he considers himself in the “health intelligence business” helping clients better understand the future of healthcare so that they may adjust their strategy accordingly.
When asked what issues he believes will be most influential in determining the future of healthcare, Gov. Leavitt pointed to three trends that he believes will significantly shape the strategy of healthcare organizations:

Compensation arrangements within hospital systems. Although many systems are moving toward value-based and risk-bearing arrangements, hospital system executives and physicians are largely being compensated on a fee-for-service basis, he explained. This lack of alignment will hold back organization’s ability to successfully take on risk and management population health. (Note: The latter inference is mine and wasn’t made explicit by Gov. Leavitt, though I assume that was the connection he was implying).
Limited capacity of individuals and organizations to collaborate effectively. In healthcare, the degree to which competitors can collaborate to reach mutual goals will largely influence the state of future healthcare delivery. However, the ability of disparate groups to collaborate effectively in incredibly challenging, making successful alliances rare.”It’s easier to get machines to talk to one another than people,” he said. In September, Gov. Leavitt released a book on this issue, which he co-wrote with his former chief of staff Rick McKeown. In the book, Finding Allies, Building Alliances,” he writes:

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Technology makes collaboration feasible, connecting diverse organizations and individuals around the world. The Internet and other high-speed communication tools allow networks to operate efficiently in ways that were unthinkable a few decades ago. The sociology of collaboration, though, is the tricky part of the equation. Connecting people, a diverse group of individuals and organizations, facilitating their work together, and sustaining it long enough to get the job done is an ambitious goal…”

Whether or not healthcare organizations can successfully come together to meet mutual goals will greatly impact how we experience healthcare in the future.

  • Impact of narrow networks. For the most part, narrow networks are being embraced by consumers, who when selecting healthcare coverage, list price as a deciding factor. If the prevalence of individuals covered by narrow networks continue to rise, healthcare organizations will face even stronger pressure to reduce costs and increase quality so they too are narrow-network worthy. Their growth, and how healthcare providers respond, will be a major player in shaping healthcare organizations’ strategy over the next few years, said Gov. Leavitt.

So while most healthcare executives aren’t lucky enough to receive their own version of the President’s Daily Briefing, they should take note of these three trends, and others that surface over the next few years, as the Patient Protection and Affordable Care Act plays out on the national stage.

 

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