November 28, 2018
Man or Corporate Culture: Who Has More Power to Disrupt Healthcare? – Burda on Healthcare
We’re at a branch point in healthcare’s evolution. We’ll learn soon whether disruptive innovation is the product of individuals or organizations. When we find out, we’ll know the best path to follow to flip the industry in favor of patients rather than in favor of the business sectors that profit from the status quo.
This came to mind with the departure of David Feinberg, M.D., as president and CEO of the Geisinger Health System in Danville, Pa. As widely reported in the press, most notably by CNBC’s Christina Farr, Dr. Feinberg is leaving Geisinger for Google, where he will head up the newly formed Google Health business unit. Dr. Feinberg’s last official day at Geisinger will be Jan. 3, 2019, according to the system’s press release.
Here’s the sequence of events, as reported in the press, that leads me to the inevitable question: Is it Feinberg or is Geisinger?
- June 7: CNBC reports that Dr. Feinberg turned down an offer to run the new healthcare company formed by Amazon, Berkshire Hathaway and JPMorgan Chase. “I personally remain 100% committed to Geisinger and remain excited about the work we are doing and the opportunities ahead as we continue to deliver exceptional care to our patients, our members and our communities,” Feinberg said.
- June 20: Amazon, Berkshire Hathaway and JPMorgan Chase announce that they’ve hired Atul Gawande, M.D., to head its new healthcare company effective July 9. “Talent and dedication were manifest among the many professionals we interviewed. All felt that better care can be delivered and that rising costs can be checked,” said Warren Buffett, Berkshire Hathaway’s chairman and CEO, in the press release.
- 5: Medscape publishes a video interview by Eric Topol, M.D., Medscape’s editor-in-chief, with Dr. Feinberg called “Geisinger: ‘The Most Progressive Health System on the Planet.’” “I don’t know what more you can do innovatively, but you are as disruptive in a positive way as anyone there is in all of healthcare at Geisinger,” Dr. Topol, an innovator and disruptor himself, told Dr. Feinberg.
- 8: CNBC reports and Geisinger confirms in a press release that Dr. Feinberg is leaving Geisinger for his new position at Google. Disruption trumps commitment, I guess.
These twists and turns involving innovative and disruptive companies like Amazon, Geisinger and Google and innovators and disruptors like Drs. Feinberg, Gawande and Topol ultimately will determine whether man or corporate culture has more power to save millions of patients from high-cost, low-quality and inaccessible healthcare services that they suffer through every day.
Before I tell you what I think, here’s what some people who are way smarter than me think.
- In March, three industry experts published an article in the Harvard Business Review called “Hospital Budget Systems Are Holding Back Innovation.” They cited three, budget-based barriers to innovation: unaligned budgeting units; rigid annual operating budgets; and separate operating- and capital-budget timelines and processes. In other words, the way hospitals and health systems traditionally do their budgets and how they spend their money based on those budgets aren’t set up to disrupt much of anything at all.
- In April, six industry experts published an article in Health Management, Policy and Innovation called “Leading Change – A National Survey of Chief Innovation Officers in Health Systems,” in which they reported the results of a survey of chief innovation officers at 25 of the largest health systems in the U.S. What was their biggest barrier to innovation? Sixteen, or 64 percent, of the CNOs said it was culture or organization structure. Four, or 16 percent, of the CNOs said it was budget, talent and processes.
- And in November, Hammond Hanlon Camp and The Health Management Academy published the results of a survey of senior leaders from 100 large health systems in the U.S. Sixty-five percent said their systems are willing to self-disrupt, but only 24 percent and 19 percent cited organizational restructuring and redefining leadership roles, respectively, as one of their top three tactics to facilitate disruption. “Many executives admit that while their senior leadership team embraces the philosophy of self-disruption, the actual roll out and implementation of a self-disruptive strategy will be a slow process,” the report said.
It’s the people and particularly the person at the top who make their own companies and organizations innovative and disruptive. In and of themselves, most companies and organizations kill innovation and disruption by creating cultures that make it too risky and too career-threatening to do anything that might affect a quarterly earnings report or expose an inert business process or c-suite executive.
I know a lot of people who worked for companies and organizations that proudly proclaimed it’s OK to fail. But when someone did, he or she was put on a performance improvement plan, denied a promotion, demoted, had their salary frozen, laid off or terminated.
So I’m putting my money on the Feinbergs, Gawandes and Topols of the world to aggressively turn this $3.7 trillion industry in the right direction rather than succumb to soul-sucking corporate bureaucracies and cultures that kill off their entrepreneurial spirit. We should know quickly how they fared, and we’ll certainly read about it in their memoirs.
If you’re running a hospital, health system health insurance company, physician practice, drug company, drugstore chain, post-acute care operation, or whatever, and you want to change things, find yourself a Feinberg, Gawande or Topol, give them whatever they need, and get out of the way. Patients and your business will be better off for it.
For more on this subject, check out “Geeking-Up Healthcare: Consumer Giant Best Buy Makes a Big Move” and “Gawande’s Gift: Re-Imaging Corporate Wellness and Healthcare,” both on 4sighthealth.com.
Thanks for reading.