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“Change Is Inevitable … Growth Is Optional”
January 29th 2006“Balad Air Base, Iraq”
“Change Is Inevitable … Growth Is Optional:
Lessons From the Front Won’t Hold You Back!”
Don Taylor
US Air Force, Colonel, MSC (retired)HFMA 2019 Texas State Conference
April 15, 2019
About Me• Healthcare Architecture/Planning/Design
• Health Policy, Plans and Operations
• Healthcare – Military, VA and State/CEO/COO
• Iraq War Veteran
• Private Sector - CEO/Entrepreneur
• Non-Profit Sector – Board Member/Volunteer
• Servant Leader/Mentor/Coach
• Speaker/Consultant/Advocate/Author
• Husband/Father/Grandfather/Stepfather/Son
• Disruptor/Visionary/Optimist (mostly)
• Fractional COO
• CEO, American University Health Care, Inc
• Adjunct Professor, UT Dallas
• Leadership Faculty, UT Southwestern
• Champion for others
Agenda
• Care in the War
• Healthcare Today
• Disruption
• The “L”s of Transformational Leadership
• Conclusion
5
Balad AB, Iraq 2006
“What am I living for and what am I dying for are the same question.”
Margaret Atwood
Balad AB, Iraq 2006
“What am I living for and what am I dying for are the same question.”
Margaret Atwood
What We Were
Small Things, Can Mean ABig “Return on Leadership”
Our Calling OF Care
“Toto, I’ve a feeling we’re not in Kansas anymore …”
Dorothy
21
How Did We Get Here?
22
Our “fee for service” model of US healthcare is unsustainable …
“Trust” among entities is difficult …
17.1% of GDP and GROWING … with little improvement in health
“America’s Healthcare System is neither healthy, caring, nor a system” –
Walter Cronkite, early 1990s
How Did We Get Here?
Did You know?
How Did We Get Here?
Did You know?You are an “Unofficial Expert” in the “Universe” of healthcare
according to your friends … But, are you really?
Do you know …
Your PCP?
Your plan?
Your locations?
Your costs?
Your own health status?
How Did We Get Here?
Is Healthcare a “Right”?
Or
Is it a “Busine$$” ?
Is it a real Market for Purchasing?
https://bit.ly/2yD04fD
Is Health Care a Right?
The New Yorker, October 2, 2017
Dr Atul Gawande
How Did We Get Here?
What are the basic tenants of healthcare operations?
How Did We Get Here?
Can you describe or discuss the Current State of US Healthcare?
Can you name a few Good and Bad characteristics of our system?
How Did We Get Here?
How is our health system funded?
Who really pays?
Who Pays?
29
Follow the Money …
30
#wheresthepriceCampaign from CMS
Dallas – Ft Worth DRG 470 –Major Joint Replacement
31
$ 188,000 or 540%
Difference!
How Did We Get Here?
Per 2019 Gallup Report
33
AMONG 36 OECD NATIONS,THE UNITED STATES RANKS:• 28th in the life expectancy of its residents,• 31st in infant mortality and• 16th in heart attack mortality, but is• 1st in the highest healthcare costs per person.
• Americans Borrowed $88B to pay forHealthcare in last 12 months …
• 65 Million elected NOT to seek careDue to cost
US Healthcare Cost Crisis, Gallup, 2019
34
Close to half (48%) ofAmericans believe the qualityof care found in the U.S. iseither the “best in the world” or“among the best”
Per 2019 Gallup Report
35
• Patient Stories as opposed to the “experience”• Health of populations• Reduce per capita costs
• Needs an identified population• Commitment to universality of its members
• An integrator – that assumes responsibility• Partnership with patient and family• Redesign of primary care• Population health mgt• Financial mgt• Macro – System integration
• Estimates that $1 Trillion is “waste” due to a fragmented/antiquated system
Dr. Berwick’s “Triple Aim”
Emerging Change - Rise In Healthcare Consumerism
Powerful Drivers for Consumerism • Expectations – now being compared to other industries• Financial – more cost shifting to consumers• Transparency – means to improve quality and informed choice• Physician influence – is being challenged by primary care options and
disruptors• Brand loyalty and equity – who they trust with consumer purchasing
www.joepatient.com
Are health systems going to build enough loyalty to compete with the expectations set by major brands and other industries?
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The “Silver Tsunami” is real … and I am becoming one of them …. “Being Mortal” by Dr Gawande
37
The Millennials and GenZs are real … and really disruptive!
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Changes in Patient Experience … It’s “Everything We Say and Do” per Dr Mark Rudolph
• Generational changes in the way we seek care
• Changing Expectations
• Challenge to “unlearn” our historic lagging process
• Expanding the point of view and consumerism
• Service timeliness and location being redefined
• Restoring the human touch is key …
Technology – IOT, CyberSecurity, TeleEverything …
• Threats/opportunities with connected devices
• Tech companies finding their way into the market
• Demands for connectivity by patients, payers, and others
• Demands for information
• Efficiencies with tech investment …. EHR savings??
• AI emergence – smart environments
• Pressures on Privacy
• Generational dependence
40
AI is here … ready or not
More Pressure to Change from Govt …• The Centers for Medicare and Medicaid Services is
launching a challenge for AI developers to predict unplanned hospitalizations — and the winner gets a $1 million award
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"The AI, Big Data is a threat to human beings. The AI and robots are going to kill a lot of jobs, because in the future, these will be done by machines … AI should SUPPORT human beings"
Jack MaAlibaba
The ACA
“Patient Protection” and “Affordable Care” Act
(2200 pages)
Hope was to create
Transformational
Change … and it did in some areas
But “Hope” is not a Strategy
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The Psychedelic Donut: Types of Coverage in the U.S.
The Challenge from HHS in 2018
• Recently, HHS Secretary Alex Azar stated these are key to “accelerating value-based transformation, and creating a true market for healthcare”
• 4 areas of emphasis:
• Giving consumers greater control over health information through interoperable and accessible health information technology
• Encouraging transparency from payers and providers
• Using experimental models in Medicare and Medicaid to drive value and quality throughout the entire system
• Removing government burdens
“The key theme uniting these 4 priorities is the recognition that value is not accurately determined by arbitrary authorities or
central planners,”
47
Uncertain Disruption Will Happen …
2020
“Medicare For All”
“Consider last year’s Kaiser Family Foundation’s analysis of the August, 2017 Merritt Hawkins survey of 1,033 US physicians which showed for the first time a plurality of US physicians favored movement to a Single Payer system. Compared to 2008, when 58 percent of physicians opposed such a shift, 56 percent now support it (42 percent “strongly”, 14 percent “somewhat”).”
Shift in Physician’s Thought About the Single Payer
51
Dollars $$$$$
Healt
h an
d Qu
ality
of L
ifeValue Formula?
Hold Cost and Quality Or
Cost and Hold Quality
Key is to EXCEED the EXPECTATION for each entity …
We all see VALUE from different perspectives
Major Shift from “Volume Based Care” to“Value Based Care”
“The ‘Explosion’ of Clinical Integration” and a few collaborations
52
Clinical Integration
53
“A network implementing an active and ongoing program to evaluate and modify practice patterns by the network's physician participants, and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality”
No published criteria, but numerous judgements by the FTC have detailed expectations of CINs:• Improving care and incentives to reducing costs – Flow of Funds• Increasing patient experience to improve health• Jointly negotiate payor contracts – Contracting Options• Collaborative clinical activities, develop and use guidelines – Participation
Criteria• Performance measures and peer reviews; quality improvement –
Performance Improvement• EHR – Shared IT• Joint governance and oversight – Legal Entity and Physician Leadership• Retains market competition
Norman PHO FTC Opinion, Feb 2013
The Future of Advanced Payment Models
• APMs are likely here to stay
• MSSP and Bundled Payments
• Improvements or changes to be expected
• Simplification – measure what matters
• Financial risk – downside risk is necessary
• Structured modernization – reward innovation
• Patient participation – improve/incentivize engagement
• Mandatory participation – increase participation to reduce costs
• Expect pressure to bear more risk
• More integration and collaboration
• Expect private payers, Medicaid, employers to implement APMs
• Patients to share savings and be more active
• Confirmation data for cost, outcomes, quality and experience
National Survey by The Doctors Company of 3412 physicians from 49 of the 50 states in 2018.
• 70% do not recommend medicine as a profession
• 50% plan to retire within 5 years
• EHRs and Regulations are the top reasons for burnout
• EHRs negatively impact the patient – physician relationship – “bad designs”
• 50% say “Value Based Care” will hurt patients, hurt their practice, reduce their earnings and diminish the physician relationship
• Most are skeptical of integration and plan to stay independent
• 57% plan to join ACOs or are thinking about it … 43% say no
• 56% do not plan to participate in PCMHs … only 15% say yes
• 25% plan to participate in a CIN … 38% say no
“Medicine will be another job, not a career. Physicians will become salaried employees of large medical groups and corporations rather patient advocates.”
Surgeon in California55
Physicians Are Not Buying “In”…
From May 2018 ….
57
Now
Do You See It?
58
59
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How will Amazon do it?• Buy an Insurance Company in 2019?• Employer Aggregator• Next Generation Retail Pharmacy – chronic and self pay• Become the new global medical supply ordering system• ASC vendor of choice for instrument packs• Become the premier enabler of post-visit communication
an delivery• Become the preferred back-end platform for existing IT
systems• Become the provider of primary care services• Become the industry leader in delivering a reliable
consumer experience
Key to survival is refine digital capabilities that redefine the business and build a foundation of partnership
opportunities with the new players ; IT is essential for “self disruption”
Amazon made headlines this year — especially as it leaped further into the healthcare arena. While there has been speculation about Amazon's entry into the industry for years, announcements by the e-commerce giant in 2018 make it clear that it's planning to make a big splash in healthcare. Here's a breakdown of Amazon's healthcare ventures, acquisitions, hiring trends and product developments reported by Becker's Hospital Review. The timeline includes Amazon's healthcare moves since January.Jan. 16. Amazon begins fielding applications for a HIPAA compliance lead. The job listing was listed on its website.Jan. 18. The company posts its top 20 cities in the running for the location of its second headquarters, dubbed HQ2. A study predicts Atlanta wins the bid.Jan. 24 Amazon's exploratory healthcare team reportedly has grown to more than 30 people. One of those hires includes Martin Levine, MD, a physician specializing in geriatrics from Boston-based Iora Health.Jan. 30. Amazon announces it will collaborate with Berkshire Hathaway and JPMorgan to launch a company aimed at cutting healthcare costs for their U.S. employees. Shares of other healthcare companies plummet shortly after the announcement.Feb. 13. Sources familiar with Amazon's plans say it is pushing to turn its medical supplies business into a major supplier to U.S. hospitals and outpatient clinics. The idea is to establish a one-stop shop for health systems through its separate business-to-business marketplace, Amazon Business. On several occasions, Amazon invites hospital executives to its Seattle headquarters to float ideas for expanding this medical supplies business.Feb. 21. Reports surface that Amazon has quietly launched an exclusive line of 60 over-the-counter healthcare products. The line is a private label brand called Basic Care and has products ranging from ibuprofen to hair regrowth treatment.March 9. Amazon hires more than 20 employees, including software engineers, data analysts and business strategists with years of experience in healthcare or pharmaceutical industries. Employees from CVS Health, Express Scripts and UnitedHealth Group have been "poached" over an 18-month period.March 19. Former FDA Chief Health Informatics Officer Taha Kasshout joins Amazon's Grand Challenge healthcare team, referred to internally as 1492. Mr. Kasshout will oversee business development for the team's healthcare products.March 20. A person familiar with the plan goes public to disclose that Amazon's healthcare team is interested in developing healthcare technologies for the elderly. Amazon's interest in health technology for aging populations dates several years, to when company officials met with AARP, a lobby that supports older Americans, to discuss various collaborations and share research. Additionally, Babak Parviz, PhD, Amazon's vice president of special projects, spoke about its plans to aid elderly through technology at an event in February. Dr. Parviz also reportedly took a cross-country bus tour in the spring of 2014 to learn how technology could assist the aging population.March 21. The U.S. Patent and Trademark Office grants Amazon a new patent for a delivery drone that can respond to human gestures. This is not Amazon's only patent to expand its air delivery service. Experts say this delivery service may disrupt supply chains across all industries.April 16. The e-commerce giant's separate business-to-business marketplace, Amazon Business, shelves its plan to become a major pharmaceutical supplier to large U.S. hospitals and outpatient clinics. The company was unable to persuade larger hospitals and health systems to adhere to a different purchasing process. Instead, Amazon will focus on beefing up its less sensitive medical supply offerings to smaller hospitals and clinics.May 11. CNBC reports that Amazon has built a team within its Alexa division to explore ways of making the device, which is powered by artificial intelligence, more useful in healthcare. The healthcare team, dubbed "health & wellness," is exploring disease management, aging and care for mothers and infants.June 6. CNBC divulges several projects that Grand Challenge is working on. One project involves cancer research in collaboration with Seattle-based Fred Hutchinson Cancer Research Center. The duo hopes to apply machine learning to prevent and cure cancers. Grand Challenge also is working with Amazon Web Services, the company's cloud business, on a project called Hera, intended to help commercial health insurers by reviewing EHR data to point out coding mistakes or misdiagnoses. In addition, the team is exploring ways to use technology to help the elderly.June 20. Atul Gawande, MD, a surgeon at Boston-based Brigham and Women's Hospital and contributor to The New Yorker, is tapped to lead Amazon, Berkshire, and JP Morgan's healthcare company. He assumes the CEO role at the venture July 9.June 28. Amazon enters into an agreement to acquire online pharmacy startup PillPack for about $1 billion. PillPack is a full-service pharmacy that manages prescription medications for its customers by packaging, organizing and delivering the medications. Shares of major drugstore chains and pharmaceutical distributors plunge after the news surfaces.July 10. Nimblr, a healthcare artificial intelligence company confirms to Becker's that it integrated with Amazon Alexa. The integration allows patients at some medical practices to schedule appointments using their Amazon Alexa.July 12. Bloomberg reports Amazon is seeking to improve its relationship with healthcare manufacturers and service providers by hiring a head of healthcare manufacturers and service team within its Amazon Business marketplace.July 12. CNBC reports Amazon is in talks with Xealth, a startup that offers a digital prescribing and analytics platform, and two health systems about a pilot project. The project would enable physicians to recommend medical product bundles to their patients at the hospital. Then those products would be delivered to the patients' homes upon discharge. Although a small number of hospitals would be involved with the initial pilot program, the idea would be to expand it across the nation.July 19. Amazon is rumored to be in talks to invest in an Indian pharmacy chain, known as MedPlus. MedPlusoperates more than 1,400 pharmacies across India and provides services to more than 10,000 people. The pharmacy chain also operates an online pharmacy store called MedPlusMart, several lab testing centers and a surgical equipment distribution business.Aug. 10. Amazon considers opening primary care clinics for its employees at its headquarters in Seattle. The tentative plan is to hire a small number of physicians to start a pilot clinic later in 2018.Aug. 15. More than 500 groups have registered to build apps using Blue Button 2.0, an open application programming interface tool developed by CMS. The e-commerce giant is one of them.Aug. 20. Maulik Majmudar, MD, a renowned cardiologist from Boston-based Massachusetts General Hospital tweets that he decided to join Amazon's team.Sept. 4. The healthcare venture formed by Amazon, Berkshire Hathaway and JPMorgan Chase selects its COO — Jack Stoddard. Mr. Stoddard formerly served as an executive for Comcast and Optum.Sept. 17. Accenture and Merck announce they are partnering with Amazon to launch a data-driven drug development platform on Amazon Web Services. The cloud-based platform will give pharmaceutical, biotechnology and scientific institutions access to research data to inform decisions at early stage drug development. The platform is expected to open to software vendors in November.Sept. 18. Change Healthcare and Amazon team up to launch a new cloud-based claims and payments network for payers and providers. The network will be available on Amazon Web Services and will deploy technologies like Blockchain. Sept. 20. STAT reports that the healthcare venture formed by Amazon, Berkshire Hathaway and JPMorgan Chase selected a global consulting firm to help craft its strategy to lower healthcare spending of its employees. The Boston-based firm, Monitor Group, will help the e-commerce giant reach this goal by helping drive improvements in the care of chronically ill patients. Sept. 28. News breaks that Amazon and Google both invested in Aiva, a startup that uses smart speakers to connect patients and seniors with their healthcare providers.Oct. 9. Amazon filed a patent for its virtual voice assistant, Alexa, which aims to detect when a user is sick. The device would then help sell users medications.Oct. 15. Becker's reports Amazon is fielding applications for a data scientist to join its health team. The scientist would work on its health insurance plan which is in the Amazon Benefits Department. The employee would be responsible for establishing data science, business intelligence, analytics and reporting capabilities for the health plan.Oct. 23. Amazon's cloud computing platform Amazon Web Services teams up with the National Institutes of Health's Technology Research Infrastructure for Discovery, Experimentation, and Sustainability Initiative. The initiative aims to help link biomedical researchers with their colleagues across the world.Oct. 26. Amazon, through a partnership with health brand consultancy Arcadia Group, will sell an exclusive new brandof consumer-focused medical devices, including blood pressure cuffs and glucose monitors. Arcadia Group said it had created a brand of at-home medical devices for Amazon, called Choice.Nov. 5. The Wall Street Journal reports that Amazon plans to split its second headquarters between two locations. The surprise decision to build two offices for its HQ2, in addition to its first headquarters in Seattle, is driven by the need to recruit the best tech talent and ease potential issues with housing or transit, according to people familiar with the decision. Under the revised plan, Amazon would split the workforce evenly with about 25,000 employees in each city. It will view all three of its main offices as headquarters with similar executive functions. However, the split means the company will build two smaller offices than its Seattle home base, which has 45,000 workers.Nov. 7. Amazon, through a partnership with generic store brand pharmaceutical maker Aurohealth, will launch a fourth exclusive over-the-counter medication brand called Primary Health. The OTC Primary Health brand has four products available on Amazon, including two generic versions of Mucinex DM, a generic version of Nexium 24 Hour and a generic version of Prilosec OTC.Nov. 8. Amazon's cloud computing business, Amazon Web Services, adds three "HIPPA-eligible" machine learning tools to its pipeline of services. Nov. 13. Amazon officially picks the winners for its second headquarters, opting to split it between Long Island in New York and Crystal City in Arlington County, Virginia.Nov. 19. The joint health company formed by Amazon, Berkshire Hathaway and JPMorgan Chase hires its first female executive, Dana Safran. Ms. Safran was the former chief performance measurement and improvement officer at Blue Cross Blue Shield of Massachusetts. She will assume her position of "head of measurement" at the health venture early in 2019.Nov. 21. CNBC reports that Amazon will soon allow its employees to test out PillPack, the online pharmacy the e-commerce giant purchased earlier in the year.Nov. 26. Accenture, Merck and Amazon's cloud-based drug discovery platform opens to software vendors. More than 30 sign up opening day.Nov. 27. Amazon announces plans to sell software that can mine patient health records for data to help physicians improve treatment plans and to help hospitals cut costs.Dec. 6. Becker's confirms Amazon hired Jason Tzau, PharmD, to help oversee the company's employee benefits plan. A pharmacist by training, Dr. Tzau serves as Amazon's U.S. healthcare benefits principal. He joined earlier in December. In his role, Mr. Tzau will lead and participate in initiatives to improve Amazon's healthcare benefits programs and service. He will also work closely with Amazon's new healthcare company with Berkshire Hathaway and JPMorgan Chase, serving as a liaison between Amazon's benefits team on behalf of employees and the new healthcare venture.
Their Collaborations are Strategically Disruptive
• Focus …
• Drive better outcomes
• Better satisfaction with care
• Better cost efficiency .. Too many middlemen in the system … new models for care
• Employer coverage is not sustainable .. It is broken
• Three Areas of Waste …
• Administrative Costs
• High prices
• Improper healthcare usage
• No timeline …
• No profit incentives
• Models for 1M that can be
“incubated” for 150M … 61
From Forbes, June 20d18 –“Why Atul Gawane Will Soon Be The Most
Feared CEO in Healthcare” …
The good news is that the change will take 5 to 10 Years … the bad news is the clock just started.
Do You See A Connection with the Cost Conundrum?
“It’s Time for Better.”
World’s Most Admired Companies …from Fortune
1. Apple
2. Amazon
3. Berkshire Hathaway
4. Walt Disney Entertainment
5. Starbucks
6. Microsoft
7. Alphabet Google
8. Netflix
9. JPMorgan Chase
10. FedEx
11. Southwest Airlines
12. Costco
25. Walmart
62Source: 2019 Fortune Magazine and Korn Ferry
Top 12 +1 of 1500 across 52 industries and 30 countries
7 are Entering Healthcare!
63
“The No. 1 takeaway from HIMSS 2018:
'Amazon and Apple and Uber, Oh My!‘”
Do Collaborations Matter?
Deloitte’s
NExT care
They all are targeting somewhat healthy, wealthy populations in the ambulatory settings …
They all are avoiding the hard solutions of elder care, chronic disease and health disparities
which are the bulk of our spending
The MOST likely to disrupt Healthcare is …..
Predictions for 2019 from Forbes
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65
$ 3.5 - $5.7 Trillion
17.1% of our GDP … and growing
Again, Why the Interest in Healthcare?
Healthcare is about imperfect caregivers, taking care of imperfect patients, under imperfect circumstances.
Dr Keith ArgenbrightFamily Medicine, UTSW
A Calling FOR Care
Industry disruption is real … and it is Targeting
Healthcare
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I see a bright, new and exciting future for our healthcare,
But only IF YOU
Are ready to lead it …
However, there is Fearof an uncertain FUTURE …
The 10 “L”s of Transformational Leadership
1. Live Your Purpose and Find Your “Why”
2. Lead Your Team with Standards and Set Expectations
3. Limit The Negatives and Launch Optimism
4. Liberate Innovation
5. Lower Barriers and “Build Trust” in your Culture
“License to Act”
To engage your team … and create a culture of “Yes”!
1. Is it Safe for you, the customer and/or patient?2. Is it Legal and Ethical?3. Is it consistent with our organization’s mission and values?4. Is it something that you are willing to be accountable for?
If YES to all, then just do it …
6. Listen in Many Ways … Always
7. Learn Openly
8. Let it Go … to Let Them Grow!
9. Look for Opportunities by “Being Present”
10. Love What You Do And Those You Do It With
Bonus … Leave a Legacy
My Legacy in Iraq …
The Rest of the Story…
Your Calling TO Care
