Posts Tagged ‘healthcare’

The true role of government

Wednesday, December 29th, 2010

From education to healthcare to economics, we love people with visions, and aim to translate their visions to policies. The various federal, state, and city administrations look for authoritative experts. Universities, think tanks, and pundits provide those experts, and they gladly opine on each topic, advocating the killer policy that will solve the problem once and for all.

There’s only one issue with that approach: no top-down policy ever worked. If it had, wouldn’t we have solved education, healthcare, and economic growth problems by now? At best, what we call inspiring visions or successful policies are revisionist interpretations of experiments that have “degenerated” into favorable results at a sufficiently large scale to have been renamed a policy. The revisionist nature comes from the fact that we define the policies by selecting the winners with the benefit of hindsight, and conveniently forget all the failed experiments that were part of the original lineup.

Every successful policy emanates from a bottom-up experiment that has gained momentum by mobilizing a set of key players with a vested interest in making the experiment successful. If this is true, the name of the game is to frame the field of experimentation, engage a large number of the right self-interested players to participate in a large number of experiments, and provide the infrastructure that allows the successful ones to emerge as a result of the co-creation process. The true vision lies in structuring the right process of collective engagement, not in guessing right at any particular outcome. The policy is what this collective process of engagement will produce once a large number of experiments have been tried and the protagonists have settled on what works for them.

I don’t know whether the ratio of students to teachers matters more to education than quality of teachers, children’s safety at home, or nutrition, but I trust that the right school administrators, teachers, students, and parents can work out the best solution in the unique context of their community more effectively than any expert. Once some communities have figured it out, I also trust that the right models will be picked up by their neighbors, establishing a de facto migration path across towns and cities that a smart Department of Education will eventually call “a policy.”

I also do not know whether the US will make the most progress in healthcare by clamping down on unnecessary tests, opening borders to imported medication, capitating reimbursements, or encouraging hospitals to become insurers, but I trust that local doctors, hospitals, employers, and patients will work something out with state insurers and regulators if provided the right process of engagement. Most underplayed of all is probably the opportunity to engage businesses, consumers, and the population at large in creating economic success at the local level.

I am neither a Republican nor a Democrat, for neither side appeals to me with attempts to lure me into agreeing with their policies, which would automatically pit me against the other half of the country. Democracy is not about choosing visions and policies. It is engaging all citizens in an effective, structured process of co-creation. By that yardstick, we have a long way to go.

Co-Creation = Ideas x Energy

Monday, December 13th, 2010

I had a Groundhog Day experience last week. I found myself interviewing the same person twice within a couple of weeks, with two different consulting colleagues, producing two completely different outcomes. The first time, the focus was on building an analytical model for a large hospital I happen to be consulting to. The solution was largely framed by the consultants: all that was needed was some data. The interviewee, who is in charge of one of the practices of this hospital, was composed and professional. He provided a lot of the requested information, but there was no warmth on either side. When the allotted time was up, it was clearly time to go.

The second time, the agenda was open. The focus was on understanding what the executive thought the company should do. Although starting in guarded fashion in light of his previous experience with the consultants, the executive progressively grew more excited, spent twice as much time as was allotted, and even got up in the middle of the discussion to print a slide that represented his vision. In the end, he asked us what we thought of his ideas and whether we could help him socialize some of these ideas with his management colleagues, volunteering that he is not very good at arguing for his vision at management meetings.

Having gone through my Groundhog Day moment, I found myself discussing with my analytically inclined colleagues what the value of our interviewee’s enthusiasm (and willingness to expose vulnerability) really is. If you are a left-brained top manager (or consultant), your answer is likely to be “not much.” The emphasis will be placed on proving (rarely) or disproving (most of the time) the validity of the vision that was expressed, and trying to remain as emotionally uninvolved as possible to avoid bias. The value of the top manager or consultant is in providing a greater level of expertise than the interviewee, which largely requires puncturing holes in his argument. If you believe in co-creation, however, you will value the emotional excitement in itself, will view your role as channeling the laudable energy, and will less likely feel the urge for intellectual one-upmanship. Of course, you will still want to validate that the interviewee is not talking through his hat, but the energy will have value in itself. This redefines the role of the top manager or the consultant as a partner in a “win more–win more” relationship, rather than as a Cassandra showing that the other person’s idea is flawed.

Of course, the two sides will happily caricature each other. Analytical minds will be tempted to describe the co-creation folks as spineless apologists for mediocre executives advancing their agenda, while co-creation people will be tempted to describe analytical types as irrelevant model-builders who will always remain on the expert sideline by failing to understand management dynamics.

What is needed is a giant ecumenical embrace that recognizes the value of both points of view. Being surrounded by engineers in my professional life, I have taken to writing a simple equation that attempts to capture both dimensions of the co-creation process:

Transformation = Ideas x Energy

The quality of ideas matters a lot. But the passion of individuals for these ideas also has value. In the end, there is a multiplicative effect between the two, i.e., the best ideas charged with the energy of the right people are the ones most likely to be transformative.

In the business world, I believe that energy is massively underplayed and analytical evaluation overplayed. The training at major business schools remains predominantly analytical (because teaching about models is easier than teaching about people and teams, although some schools are working hard on changing that). There may also be a male bias: since guys tend to be less intuitive than women about other people and continue to dominate the management ranks in most parts of the world (with some exceptions), the overall bias remains analytical. Also since business is largely about metrics (with money the ultimate one), it is easiest to think of everything else being numbers-based, which avoids the confusion of having to factor the human thing in the equation.

I gotta go now. My healthcare executive has had another thought he’d like to share. He and I, we’re now co-creating the future of healthcare.

Springtime for suppliers

Sunday, September 19th, 2010

Something is happening in supplier land. I don’t dare say it too loud. It’s like a ray of sunshine after a long winter. You don’t want it to get scared and fade away.

I first became aware of it speaking with a large chemical company in Europe two weeks ago. They supply resins to large automotive companies. “It’s not as bad as it used to be,” the supplier said. “The big automotive companies are beginning to work with us, you know, exchange some designs, underwrite the cost of some tooling and development. They no longer steal our designs and reverse-auction them to the lowest bidder.”  There was a pause in the conversation. “Even the American guys are getting better,” he added, for good measure.

For 25 years, I’ve been on the wrong side of the supplier discussion, arguing that original equipment manufacturers (OEMs) would be economically better served to co-create with their suppliers rather than beat them into price submission. A buyer at General Motors once told me, in the era when Purchasing Head Inaki Lopez was encouraging intimidation as a strategy, “Your theory of co-creation as it applies to suppliers does not even rise to the level of being wrong. You’ll never sell this here.” His prediction has proven so accurate that I’ve spent the last 25 years in my frozen supplier tundra, watching sourcing consultants help buyers slash costs and throats of defenseless suppliers too dependent on their order-givers to walk away.

Last week, though, I noticed some more ice melting from the trees. I was with a group that supplies parts to a large number of industries in the US and Japan. The most enthusiastic response to co-creation I got from this group was…from the automotive contingent. “Now that Ford has a Boeing person at the helm, things are downright good,” they said. “We’re sharing our best designs with them again. We’d stopped doing that many years ago.”

This weekend, a whole chunk of the ice cap melted under my incredulous eyes. The purchasing group at a large US healthcare company – yes you read it right, the purchasing group – is seeking help to build a new collaborative network capability. I read page after page of this RFP with trepidation, trembling at every page that this search for a new supplier co-creation capability might be a cover-up for the usual exercise of “We really are trying to lower cost.”  But no, it appears to be real.  This may be the end of the ice age for Western suppliers.

Oh yes, one more thing. Now that arrogance has been wiped off the face of the US automotive industry, there seems to be a new bully. Four companies in the last few weeks have voted for a new purchasing villain. You guessed it: Apple Computer appears to have risen to the top of the charts when it comes to treating suppliers badly. I wonder whether Steve Jobs is interested in automotive history.

Pharmaceutical scientists show the way

Monday, August 16th, 2010

A frequent objection to co-creation in pharmaceutical research – which we will define here as the sharing of research data and cost in the hope of discovering new therapies for major human conditions – runs something like this: “co-creation is fine and dandy, but it runs so orthogonal to the commercial interests of large pharmaceutical firms that it will never work.” My timid encouragement toward co-creation across private and public entities in the healthcare sector has usually been dismissed as a sign of my ignorance of how the industry really works, probably coupled with some Marxist-Leninist drift attributable to my European ancestry.

Fortunately, a few pharmaceutical scientists decided to take the matter into their own hands for research on Alzheimer’s disease. A recent article in the New York Times describes how back in 2003, a group of scientists decided they needed to build a common database and research protocol to identify biomarkers that may lead to Alzheimer’s. As a result, they sweet-talked their respective employers into this co-creative approach – from the very public National Institutes of Health and the Food and Drug Administration to very private players in the pharmaceuticals and medical imaging industries.

I find it particularly interesting that the scientists themselves took this initiative. They knew what needed to be done from a scientific standpoint – the idea was to accelerate the pace of research and get to results faster – and they were the only ones who could sell this approach to their business colleagues and bosses. The typical corporate strategy approach driven by businesspeople and shareholders, with its focus on deals and industry restructurings, might have suggested a merger or an acquisition, perhaps an alliance, but it would not have produced this syndication of such a strategic step in the research process.

The software industry has followed the same evolution. Software scientists have also bypassed the corporate proprietary imperative and established a social community of co-creators, leading to the development of the Linux operating software and Apache HTTP Server, for example.  Interestingly, a booming private industry has developed on top of these community-developed programs, proving that co-creation does not lead to socialistic mediocrity, but to a different model of capitalistic vibrancy. There is every reason to believe that the same will be true for the Alzheimer’s diagnostics and drugs industry when it finally materializes. The article in the New York Times reports that many promising papers and experiments are now hitting the market, based on the research work initiated back in 2003.

Another important constituency in healthcare is the patients themselves and their families. One does not feel the pain of undeveloped software with the same intensity as the lack of an Alzheimer’s drug. We all have friends or relatives touched by Alzheimer’s. In some cases, patients have themselves created communities where they share immensely private data about their symptoms and medication, in the thin hope of finding treatments where the pharmaceuticals industry has not deemed it commercially attractive to direct resources at the issue. offers a window of such human distress, where patients for example analyze whether lithium can help in the treatment of ALS disease.

In the end, corporations and public agencies have little compassion. But the scientists who populate them do. And thank God for that.

Affairs of the heart

Saturday, December 19th, 2009

heart stethoscope

It’s been a rough week. My wife had heart surgery at Brigham & Women’s hospital in Boston on Monday to correct for a longstanding problem. My 17 year-old son had a resurgence of a potentially threatening kidney problem he had in 2001 that warrants careful monitoring of his situation at Children’s Hospital of Boston. And so I have moved from being a highly supported global traveler to living the ordinary life of a caretaker meandering through the processes of two large healthcare providers. I have found this to be good for my soul, but bad for my blood pressure.

Of course, both institutions are world-class and their doctors top-notch. So what am I complaining about? Well, my grief is that I’d like to participate in the process, maybe even add value to it. You see, I happen to know my wife and my kid pretty well, including their medical history. More importantly, I love them and want to advocate for them. This seems to make me into the meddler, the guy with stethoscope envy, who’d like to be a doctor, but only plays one on TV.

The healthcare industry is focused on setting up electronic medical records (EMR in the jargon). As for me, I’d just like to have access to the darn records, whether they’re electronic or drawn as Mickey Mouse cartoons on the back of a filthy envelope. The first thing I want to do is shepherd them through and make sure they land where they’re supposed to. I’ll carry them to downtown Boston on a donkey if that’s what it takes. And by the way, I also have a computer and have been properly trained on how to attach documents and pictures to emails. All I’m missing is a couple of doctors’ e-mail addresses.

For example, some of my kid’s lab results generated in Concord on Monday needed to be at Children’s Hospital on Wednesday for an important diagnosis with a nephrology specialist there. I called several times to make sure the records would be there and was assured they were. Sure enough, the nephrologist didn’t have them when I visited with my kid, so we ended up wasting the specialist’s time at Children’s and will have to redo some of the stuff. Because I care, I would’ve been willing to spend a lot more time than any expediter in the system, so put me in charge please! It’ll be cheaper for my cost-conscious healthcare providers and I’ll stop bugging the attending nurse over it. As for me, I’ll quit chewing my nails.

And now for the scary part. If you give me transparent access to the records of those I care about, I’ll want to participate in the co-creation of the diagnosis and the treatment. My wife had a slightly elevated temperature after the operation. Because I know her temperature is quite low naturally, the elevation was more significant than for an average patient and I tried to get the nurse to pay attention to this. Because the absolute magnitude of that temperature was deemed too low for intervention in “The Great Book of Medicine,” it was suggested that I take a deep breath instead.

As I’ve also learned, getting patients to walk after a heart operation is a key component of getting well. Since nurses work in shifts at the hospital, nobody had a longitudinal record of her physical activity. At some point, her nurse had too many patients and the neighboring nurse not enough, so they literally ended up pulling names out of a hat to see who would be redistributed. My wife’s name was drawn. I’m not sure whether the new nurse was better or worse than the old one, but it provided an apt metaphor for the lack of continuity and personal identification with the patient’s experience.

To create this continuity, my daughter and I decided to write on the white board in the hospital room what my wife had accomplished and how much she still needed to do. This initiative was deemed “very cute” by a couple of amused doctors and nurses. As for me, I think I’m helping her get well, maybe not quite as much as the brilliant surgeon who held the scalpel or the world-class cardiologist who dispenses the medicine that keeps her heart pumping day after day, but we’re there nonetheless.

I have to leave you now. My wife’s coming out of the hospital today and I have to go get her. I’ll have to go to weekly tests with my kid for the foreseeable future, but he’s in good hands. The doctors, the nurses, my daughter and I, we’re a heck of a medical team.

Healthcare co-ops as co-creation

Wednesday, August 19th, 2009

There have been so few new ideas on either the Democratic or Republican side of the political debate since the advent of the Obama administration that we should welcome the arrival of the healthcare co-op idea recently floated by the Senate Finance Committee.

Of course, the idea has already been ridiculed by politicians on both sides of the aisle, because it is neither a true public option nor a fully private-sector enterprise. But let’s remember that being mocked on both sides is often the beginning of bipartisanship. So far, co-ops have been viewed as a sort of union where consumers would come together in a nonprofit structure, negotiate with doctors and healthcare providers, and compete against traditional private-sector insurers. I can’t get too excited about this concept because it does little to reduce overall cost, which is the real issue here. Eliminating some of the costs associated with the high salaries of private-sector management and the remuneration of third-party investors is not that big a deal. Also it’s hard to see the self-replicating nature of the enterprise that would allow the co-op to rapidly reach a scale where it can compete against private insurers.

But if doctors were allowed to become part of the co-op, then the game would become interesting, because both sides would have a vested interest in lowering costs and could engage in the co-creation of unique solutions to get there. Imagine you’re a middle-aged, overweight person belonging to such a co-op and you’re facing your general practitioner for your yearly physical. Further imagine that you both are members of the same local co-op. Your motivation to lose weight increases if you know your extra pounds not only create a health risk but also impact your premium. Because the doctor is a fellow co-op member, he is no longer a dispassionate dispatcher of “I don’t care if you listen to me” advice. The doctor is now more likely to put pressure on you to shape up, since he personally suffers the financial consequences of his patient’s bad habits. Both doctor and patient now have skin (or pounds) in the game. The royal “we” in “Now, how are we going to lose weight?” becomes a true “we.” And that’s harder to ignore. In this intertwining of the doctor’s and patient’s fate lies the true opportunity to reduce costs, and the chance for the co-op to effectively compete with health insurers.

It also becomes easier to see how co-ops with joint memberships of patients and doctors could scale up rapidly. There is an eBay quality to this marketplace of buyers (patients) and sellers (doctors) coming together to organize an efficient healthcare exchange. I’ll bet you could find quite a few doctors and patients in many communities willing to put up $5,000 of capital to get a local co-op going. Before you know it, you’d have a respectable amount of capital that would allow the co-op to set up shop, buy a few computers, and hire some people. If we truly want healthcare reform, let us put our money where our mouths are. The interests of doctors and patients are objectively aligned. A few successful, early communities could trigger a rapid proliferation of the concept at the national level. If doctors became excited about co-ops, they in turn could redefine their own relationship with their hospitals and bring them to the negotiation table with the co-ops.

This democratization of healthcare through co-ops would bring healthcare back to the people who care the most about it: patients and doctors. Let’s give them a chance to shape the concept.

Hey Barack, why haven’t you called?

Saturday, July 18th, 2009


I’m disappointed. I had you down for a web 2.0, co-creation type. I saw you double-task like a 12 year-old: Blackberry in your left hand, conducting a live town meeting with your right hand. During the campaign, you were so organized that three of my friends asked me to vote for you and I’m not even a citizen (one of them even offered to do the paperwork for me, but TSA talked him out of it). You had me blogging, participating in neighborhood parties and urging others to give money.

But since you’ve been elected, I haven’t heard from you. O.K., that’s not exactly true. I’ve seen a lot of you on TV. But it’s all about big top-down programs like TARP, stimulus packages and universal healthcare, driven out of D.C. I don’t live in D.C. I live in Concord, Massachusetts. You’ve stopped calling on me. What happened? I never bought the “war as a metaphor” thing when it came to drugs and terrorism. But the economy, man, that’s a real war. Some of my friends have been laid off or have lost their house. I also have a small business and I know how tough it is. So I’m ready to fight. Why aren’t you calling?

You tell me what to do. If you want to do healthcare, I’ll work something out in my little circle. I’ll start with cost. I’ll get everybody to lose weight and become healthy in my small business. I may have to start with myself on this one. I’ll go negotiate a special deal for my company with my local doctors and hospitals. Better yet, I’ll enlist the other small businesses from downtown Concord to come with me and we’ll wrestle out a new arrangement from both care providers and the local insurance company (they don’t get along too well anyhow, so we’ll teach them how to co-create with us at the center). Maybe we’ll start a citizen’s initiative that finds out who’s been denied coverage locally and we’ll force the insurance companies to include them if they want our business. But you gotta give me direction, Barack. Provide me with legitimacy and tools to engage these doctors, insurance companies and left-out people.

If your agenda is jobs, I’ll hire a few kids out of college, just to help. I’ll organize internships for high-schoolers. With the other businesses in Concord, we’ll put together summer programs (“learn to be a CPA, a grocer, a consultant, a garage mechanic, all in one summer”). We’ll discover who’s really good at what and we’ll hire them (I say this with the smugness of the guy who thinks he can outbid the local Jiffy Lube, but I might be in for a surprise). Their parents will want to come to our shops and buy services from us because we’re nice to their kids. I’ll stop treating my home town like a stopover place on my global itinerary. But again, Barack, you gotta give me leadership and support.

I know you’re going to say I could so some of these things on my own: volunteer at the hospital or recruit a couple of kids. But I want to be part of a BIG THING. I want a vision, a massive mobilization, an inspiration. I’m thinking “going to the moon” forty years later. If you do that for me, Barack, I may even start feeling good about your hitting me for more taxes. Just call me. I’m shovel-ready.