“The system is squandering value in medicine” – guest post on West Wire

West Health is a new initiative funded by Gary and Mary West, four separate organizations (read about them here), pursuing innovations in healthcare. The parent organization has a new blog on patient perspectives, “West Wire.” The first post on July 9 was an interview with friend / colleague / attorney Donna Cryer, then they invited me to submit a post.

I chose to blend the Institute of Medicine’s report Best Care at Lower Cost (which said our health system must be “anchored on patient needs and perspectives”) with California-style disruptive innovation, which is about serving the customer perspective. Their final post is here (edited to fit their word count); my original full text is below. My wording is more in-your-face than I usually am, but I chose my words thoughtfully, and I mean it.:-)
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The system is squandering value in medicine.
Disrupt! Disrupt! Disrupt!

Have you ever been disrupted? Had your guts ripped out by a restructuring of your industry? It blindsides you, and it hurts. You feel wronged, and you feel puzzled – because usually it hits good people in your industry who, whether they knew it or not, weren’t getting the job done well enough. And that’s why when the disruptors come along, the business shifts so fast your head spins.

I got disrupted thirty years ago, so I know how it works, and I know it’s not magic. To understand and predict how disruption might be coming, look for a genuine shift in the flow of value. For instance, if inefficiency drives you up a wall, take a look at this. It’s a diagram of how well medicine is delivering value today – a leaky pipeline:

Who says this? Not some ignorant cheap-shot upstart; this is from the Institute of Medicine – the pinnacle of academic medicine – in their 381 page report Best Care at Lower Cost, published in 2012.

Whether you’re an investor or a grant funder, these leaks ought to irritate you, because the pipeline that distributes what you funded is spilling way too much on the floor. Plus, if you’ve had a subpar experience as a patient, there’s a good chance it could have been better but the system dropped the ball: potential value leaked out before it got to you. Or your child. Or your mother.

In economic terms: value created by investors and grants is too often not reaching consumers.

And that’s why, in that same report, the IOM said our future system must be “anchored on patient needs and perspectives.”

Yes, the IOM says the patient perspective anchors the future of medicine.

Times like this call for real disruption.

Getting disrupted teaches you a lesson about power dynamics and value. You’re good in your industry, then suddenly nobody cares.

I got disrupted. Thirty years ago I was a hotshot in typesetting machines. We made great machines, we were good at it, we knew fonts, we had software that put hyphens in words(!), and we knew page layout. Then along came the Mac, Pagemaker, and LaserWriters. The quality was garbage, they were toys, and they were used by ignorant people who didn’t even know what was important. Yet within ten years the industry we knew was dead, replaced by a radically restructured ecosystem of software, hardware, vendors and workflow. The value system of our day was replaced by a new one, which evolved from scratch in response to consumer values.

Along the way the clueless users learned about fonts, they learned about hyphens, they learned enough to accomplish the work as they saw it.

Real disruption connects original value with the people who need it, and eviscerates structures that got in the way.  

When that happens, value gushes, because the source and the need connect more directly.

We the incumbents knew our work took special skill, and we knew the upstarts were clueless. What we didn’t realize was that the open architecture of these systems would let them grow in whatever direction the ultimate stakeholder valued. New workflows evolved, and a thousand products sprouted because open APIs let them access our data. Most innovators failed, but several changed the world. Enormous new markets arose as people kept the parts of the past they wanted and ignored what they didn’t. We couldn’t do a thing about it, and the radical incumbents ate our lunch.

In healthcare the patient is the ultimate stakeholder.

If you’ve ever had a medical crisis, you don’t need a lecture on whose outcome matters. It’s a damned shame when value that could have reached the patient’s bedside fails to do so. That’s why I’m so sure that new market power will arise as interoperability – the ability to move data around – spawns innovation.

Here’s a different view of the flow of value, on a different dimension from the IOM’s. Look how information and awareness drive a completely different path:

• Consumer self-awareness lets patients know their status. Glucose monitors, AliveCor smartphone EKGs, Eric Topol’s world of wireless sensors, even Scanadu-like “tricorders” for pocket diagnosis. When you can know your situation, you’re empowered to act.
• Peer-to-peer chatter about options and benefits will increasingly spotlight providers who are innovating and finding things patients like.
  • This is no threat to leading providers. It’s a threat to laggards.
  • It will be fueled by more data – on price and consumer likes. Yes, I said consumer likes. That’s not the same as industry-defined “quality.”
• When consumers control their records, they can go where they want. This one’s a long way away, but it’s the Big Kahuna that will let value gush.

Note: while the endpoint in this flow is patient-defined value, the shift isn’t just about that: it’s about rewarding providers who bust their butts to do a competent job at an honest price. That’s the dynamic that motivates innovation and transforms value … for those investors and grant funders.

Interop lets ecosystems grow – around patient needs.

You can’t profoundly disrupt by analyzing the industry with all its current problems. You have to start by standing in the shoes of the ultimate stakeholder and asking “What do I need? What could make a difference??” When that’s answered, the next step is to go for it. And in medicine, interop makes that much easier.

In Let Patients Help one of the most-quoted slogans is People perform better when they’re informed better.  It applies to clinicians, and it applies to patients. The core dynamics of a functioning market will be transformed when interoperability lets your data, your child’s data, your father’s data connect to hundreds of snazzy new software tools, so you the consumer are more aware and better informed. Most innovators will fail, as they did in typesetting. But several will change the world. And all of that depends on interop.

Disruption hurts, but you don’t need to be blindsided. Get over yourself, your own sense that because you’re smart, no one can touch you: “smart” evolves. You can understand how value shifts when industries evolve. If you’re a patient, you can stand up for your right to say what you want. And if you’re in the business, you can see the future, understand what’s changing, and move there while the defenders of the present hang back.