Task Shifting Could Help Lower Costs in U.S. Health Care

Hayon Thapaliya/HBR Staff

If you ran a fancy restaurant, would you want the chef also to clean dishes and mop the floor? Of course not. You’d hire others to do these things and let the chef focus on producing delicious food. This simple idea — that one should match the skill level of the individual to the skill requirements of a task — has influenced how many businesses operate. That’s why lawyers are helped by paralegals, professors by teaching assistants, and chefs by sous chefs.

Task shifting of this kind moves routine tasks requiring lower skills away from high-skilled professionals. It must be done judiciously, because if a person is less qualified than a task requires, it will hurt quality and may add to costs if rework becomes necessary. On the other hand, if a person is overqualified for a task, it will increase cost and, counter-intuitively, may lower quality

Continue reading "Task Shifting Could Help Lower Costs in U.S. Health Care"

3 Entrepreneurs Who Made It Their Mission to Lower Health Care Costs

baranozdemir/Getty Images

There is a healthcare crisis in the U.S. which cries out for breakthrough healthcare delivery innovations that aim at significant cost reductions and wider coverage. In 2016, the U.S. spent a staggering $3.2 trillion, or almost 18% of its GDP, on health care — that’s $10,000 per person, twice as much as any other country in the industrialized world. Innovation has the power to ratchet down U.S. costs quite dramatically over the next decade. We know this because in India innovators have found ways to deliver high-quality care to everyone — rich, poor, and virtually penniless — and make money doing it.

It all starts, as the stories below show, with purpose-driven leadership: a determination to provide high-quality, ultra-affordable health care to all, regardless of ability to pay:

Saving Eyesight at a Fraction of the Cost
Born and raised in Trichy, India, Kuppuswamy

Continue reading "3 Entrepreneurs Who Made It Their Mission to Lower Health Care Costs"

Is This the Hospital That Will Finally Push the Expensive U.S. Health Care System to Innovate?

Tim Robberts/Getty Images

There was a time when the American steel industry seemed invincible. The American automotive industry looked rock-solid. American consumer electronics industry seemed untouchable. In every one of these cases, global competition changed the game forever. Will the same happen to health care in the United States?

By almost any measure, American health care costs are out of control but the system refuses to change. What if you could provide excellent care at ultra-low prices at a location close to the U.S.? That’s what Narayana Health (NH) did in 2014 by opening a hospital in the Cayman Islands — Health City Cayman Islands (HCCI) — which was close to America but outside its regulatory ambit.

As we explain in Reverse Innovation in Health Care, Narayana Health’s founder, Dr. Devi Shetty, wanted to disrupt U.S. health care with this venture, set up in partnership with America’s largest

Continue reading "Is This the Hospital That Will Finally Push the Expensive U.S. Health Care System to Innovate?"

What’s Holding Women in Medicine Back from Leadership

Reza Estakhrian/Getty Images

For over 25 years, women have made up at least 40% of U.S. medical students. This past year, more women than men were enrolled in U.S. medical schools. Yet overall women make up only 34% of physicians in the U.S., and gender parity is still not reflected in medical leadership. Women account for only 18% of hospital CEOs and 16% of all deans and department chairs in the U.S.—positions that typically direct the mission and control the resources at medical centers.  Women are also in the minority when it comes to senior authorship (10%) and Editors-In-Chief (7%) at prestigious medical journals.

Reasons for gender disparities in the C-suite of medicine are manifold. For example, women do not achieve promotions or advancement to leadership positions at the same rate as their male peers.  Highly qualified women do

Continue reading "What’s Holding Women in Medicine Back from Leadership"

Getting Doctors to Make Better Decisions Will Take More than Money and Nudges

Tim Robberts/Getty Images

Research has repeatedly shown that U.S. patients receive recommended care only half of the time. It is also known that patients receive non-recommended or “low-value” care as much as 20% of the time. Despite the proliferation of evidence-based guidelines to improve clinicians’ practice patterns, clinicians often don’t respond to them. So healthcare leaders have long wondered: what’s the best way to change clinicians’ behavior and improve their quality and efficiency of care?

In recent years, there has been a lot of enthusiasm about approaches like financial incentives and behavioral “nudges” to help clinicians offer more evidence-based care. But clinical decision-making is far too complex to be consistently improved by applying these frameworks. When it comes to changing clinician behavior, leaders have to think more broadly about the local organizational culture clinicians work in.

What the Research Says

Let’s first look at financial incentives. Pay-for-performance (P4P),

Continue reading "Getting Doctors to Make Better Decisions Will Take More than Money and Nudges"

Do Most Hospitals Benefit from Directly Employing Physicians?

Peter Dazeley/Getty Images

How can hospitals and health systems generate a return on their investment in their physician enterprises? According to the most recent figures, from the American Medical Association, over 25% of U.S. physicians practiced in groups wholly or partly owned by hospitals in 2016 and another 7% were direct hospital employees. Yet, according to the Medical Group Management Association, hospitals’ multi-specialty physician groups lost almost $196,000 per employed physician.

As a result, some larger health systems’ physician operations are generating nine-figure operating losses, which are major contributors to the deterioration in hospital earnings.  It is time for hospitals or health systems to rethink their strategy for their physician enterprises.

Let’s first revisit why independent physicians were receptive to becoming employees and why hospitals and health systems felt the need to hire them.

The surge in hospital employment of physicians predated Obamacare by at least six

Continue reading "Do Most Hospitals Benefit from Directly Employing Physicians?"

10 Promising AI Applications in Health Care

Peter Dazeley/Getty Images

There’s a lot of excitement right now about how artificial intelligence (AI) is going to change health care. And many AI technologies are cropping up to help people streamline administrative and clinical health care processes. According to venture capital firm Rock Health, 121 health AI and machine learning companies raised $2.7 billion in 206 deals between 2011 and 2017.

The field of health AI is seemingly wide—covering wellness to diagnostics to operational technologies—but it is also narrow in that health AI applications typically perform just a single task. We investigated the value of 10 promising AI applications and found that they could create up to $150 billion in annual savings for U.S. health care by 2026.

We identified these specific AI applications based on how likely adoption was and what potential exists for annual savings. We found AI currently creates the most value in

Continue reading "10 Promising AI Applications in Health Care"

How Hurricane Harvey Spurred a Houston Hospital to Rethink Emergency Care

bubaone/Getty Images

Lyndon B. Johnson General Hospital, a county-funded, safety net institution in economically disadvantaged northeast Houston, is the sole hospital to provide inpatient, obstetric, and emergency care for nearly 25% of the city’s land area. Although it remained open for operations during Hurricane Harvey in late August 2017, the storm caused significant moisture damage to its infrastructure, necessitating the closure of more than half of its 200 inpatient beds for several months after the storm.

The hospital’s emergency department (ED) continued to provide effective emergency care to the community — many of whose members had substantially increased need for medical care after the hurricane. To do that, the ED, which already operated with the resource constraints of crowding (more patients than treatment spaces) and boarding (insufficient inpatient beds, which requires patients to stay in the ED until beds are available), had to undergo sweeping changes almost overnight.

Six months later, largely as a result

Continue reading "How Hurricane Harvey Spurred a Houston Hospital to Rethink Emergency Care"

To Enlist Physicians in Reducing Costs, Show Them the Costs

PM Images/Getty Images

In a recent speech, Alex Azar, the U.S. secretary of health and human services, said, “There is no more powerful force than an informed consumer.” What about an informed provider? If health systems are truly going to improve the value of the care they deliver, they need to enlist doctors in the effort. According to a national survey conducted by University of Utah Health, 89% of physicians believe the overall cost of health care in this country is too high. Now we need to give doctors a chance at engaging in the conversation by developing tools to make cost transparent to them.

For the past five years, University of Utah Health has been working on a tool that does just that. Its Value Driven Outcomes (VDO) initiative provides physicians with cost data to assess health outcomes per dollar spent. VDO is a modular, extensible framework

Continue reading "To Enlist Physicians in Reducing Costs, Show Them the Costs"

a16z Video: Shifting Risk Mindsets, from Tech to Bio

What challenges do first-time founders or tech founders encounter when building companies in the bio space, and how does it differ from traditional tech companies? In this hallway-style conversation, a16z bio team partners — including general partners Jorge Conde and …

How One Hospital Improved Patient Handoffs for the Long Term

Janis Christie/Getty Images

Roughly 80% of serious medical errors (now the third leading cause of death in the United States behind heart disease and cancer) can be traced to poor communication between care providers during patient handoffs, according to a 2012 Joint Commission report. This makes patient handoffs the most frequent and riskiest procedure in the hospital.

Despite the development of numerous techniques and tools to structure patient handoffs and improve the transfer of communication, we haven’t seen much improvement in reducing medical errors. The problem is two-fold: first, hospital administrators and managers struggle to effectively implement these tools. Second, they struggle to sustain change that’s made.

The perioperative unit at Midland Memorial Hospital (MMH) in Texas was in precisely that situation. Leaders noticed that the majority of patient handoffs had some level of missing information. While missing information was often not critically important or time-sensitive (e.g., patient

Continue reading "How One Hospital Improved Patient Handoffs for the Long Term"

How to Accelerate the Adoption of Digital Health Technology

Jamie Jones/Getty Images

In 1997, health information technology and digital health pioneer Warner Slack wrote his bold and prophetic book, Cybermedicine: How Computing Empowers Doctors and Patients for Better Care. Slack argued that “the electronic digital computer, with its capacity to hold large amounts of data and to execute multiple complex instructions and accuracy would…find an important clinical role in both diagnosis and treatment.”

While the digitization of health information has solved many problems in American medicine — particularly, helping to reduce medical errors by enhancing clinical decision support — it has inevitably created many new ones. Clinician-oriented solutions such as electronic health records (EHRs) are contributing to physician burnout instead of facilitating patient care. Many anticipated that health information technology would reduce costs by limiting the duplication of tests and studies, but there is little evidence that it has accomplished this. And while patient-oriented digital solutions have proliferated in

Continue reading "How to Accelerate the Adoption of Digital Health Technology"

Can’t-miss advice on funding a health care startup (VB Live)

VB LIVE: The potential to disrupt health care with technology at scale is huge. It just takes a venture capital partner, paired with your own expertise in health tech. Join this webinar to learn how VC partnerships can help you navigate through the regulations and complicated nature of health care, and get your startup thriving. Register here for f…Read More

Can’t-miss advice on funding a health care startup (VB Live)

VB LIVE: The potential to disrupt health care with technology at scale is huge. It just takes a venture capital partner, paired with your own expertise in health tech. Join this webinar to learn how VC partnerships can help you navigate through the regulations and complicated nature of health care, and get your startup thriving. Register here for f…Read More

The Best Flu Prevention Might Be Behavioral Economics

diane555/Getty Images

Alongside popular misconceptions that healthy people do not need the flu shot and myths about the harmful side effects of the vaccine, numerous studies have shown that one of the biggest reasons people don’t get vaccinated is that a physician never recommends it. (Eighty percent of patients say they would be more likely to get a vaccination if a health care provider recommended it.)

How can we get more care providers to recommend vaccinations? Luckily, there’s a cheap, effective way: “nudging” them to do so by making subtle changes to the context in which they make decisions. Flu vaccinations are a case in point.

Ultimately, the flu could end up infecting more than 30 million Americans this season (October 2017 through April 2018), resulting in more than 50,000 deaths across all age groups, $11.6 billion in health care costs, and 111 million lost workdays.

Although the vaccine’s effectiveness

Continue reading "The Best Flu Prevention Might Be Behavioral Economics"