Financing Healthcare

My pick of healthcare systems would be none. Why?

All the choices are dated. Rather than looking at a model in it’s entirety, we need to look deeper to what aspects are working and why.

What we know is that healthcare financing affects timely access and all systems no matter how they are currently financed have access issues whether it’s waitlists, the cost of care or patient’s who prioritize savings over timely care.

We also know that untimely care typically results in more expensive care. So the question should be not which system is best but rather do we shift the financing to emphasize more timely care that keeps people healthy.

The questions that everyone should be asking now are:

1/ Which companies should be at risk for keeping people healthy?

2/ Which companies should be at risk for delivering high quality care?

3/ What role should the government play to make healthcare affordable?

As an industry, we can’t answer those questions. We need to know:

1/ Who do people trust as a partner for their journey through life?

2/ How much involvement are they willing to tolerate before the solution becomes too invasive and creepy?

3/ How can we build trust?

Design for disruption

Streamline processes or anticipate the disruption that is going to happen and design for it?

I was at a digital health event last night and one of the companies presented the new process that would be enabled by their technology. It was better but only modestly better. 

What it didn’t consider is an engaged healthcare consumer, patient or member. People everywhere in the world are trying to self diagnosis themselves with online information and studies. That trend is going to continue with the number of free apps, wearables and tests that are engaging people in their own health.

As an industry, we can’t put the genie back in the bottle. We need to anticipate what people are likely going to do and design for it.

Disruptive tech companies study how people use their technology and hook them by making their solution even easier to use. We need to take that mindset into process design and design for how people actually want to use the healthcare system.

Dated gatekeeper models are not going to work in the era of an engaged consumer, patient and member. People will circumvent processes that are long and difficult. It’s the work around that we all do in corporate America. So why would we expect anything different in a healthcare service?

A good plan

Five tips for physicians trying to push their initiatives through the healthcare systems.

I read a summary proposal prepared by a MD today that fell flat with the Hospital Administrator. It was missing the essential information needed to evaluate viability.

I provided some feedback and thought other MDs might benefit from some general feedback too.

1/ State the problem. What’s wrong with the status quo? Tell the story about how patient’s are being negatively impacted by the current treatment and/or service.

2/ Describe the future state. What would the new treatment and/or service look like, how would it be enabled and who would deliver it?

3/ Provide existing metrics and goals. Back up your plan with data for the relevant metrics.

4/ Resources. What needs to change to enable the new treatment or service? Can you train and redeploy resources or do you need more and/or different types of resources? How hard will it be to train, attract and/or hire the resources needed? How much will it cost? What other resources do you need?

5/ Commitments beyond approval. Who needs to buy into the plan and/or who could enable it because they have existing business relationships etc.? Are there partnerships that would be beneficial?

Improving Quality

I’m reading Stephen Pinney‘s book called How Hockey can Save the Healthcare System and highly recommend it. Why?

The section on Quality addresses one of the most important lessons for Administrators….don’t always trust your reports. Dr. Pinney highlights the problem in his example with the Pre-Operative Surgical Checklist.

According to the Administrator, the checklist was preformed consistently for two years without issue. The problem was that it wasn’t performed correctly. Significant errors resulted and were unreported.

One of the most important lessons that I have learned from working closely with Medical Directors is that they know the business. When they say something is wrong, something is likely wrong. Administrators need to dig into the details to get to the bottom of the issue rather than dismissing them.

Interestingly, Dr. Pinney and I have uncovered the same issue. Data is often missing and when data is missing – the reports are wrong. Administrators need to understand why the data is missing and take the steps needed to ensure it is consistently captured. It’s a matter of life and limb – literally.

According to Dr. Pinney, these types of quality and process improvements are key to systematizing medicine and achieving the third aim. However, it all starts with accurate data.

Think end-to-end

When you change a process, you have to think about the entire experience of the new process. Why?

In short, you want people to follow the process and have a good experience of your service.

I experienced a very broken process yesterday that saved the owner of it money but put additional burden of both time and money on the user. In my case it was a government process with no way around it but those types of broken processes in the corporate context are ripe for a workaround.

In healthcare there are a ton of workarounds. For example:

– EMR design problematic. Turn off the field requirements.

– Staffing model problematic: Adjust the acuity of the patient population.

– Contracted rates problematic: Drop out of the network.

– Billing and payment problematic: Bill the patient.

Each problem and every workaround has an impact to the patient and their experience of the healthcare system.

The problems with the experience have been compounded by the number of solutions that are not integrated into the system. When everything is piecemeal it makes the system feel more fragmented and difficult to use.

To make the system feel less broken, we need to think about the end-to-end experience of how patients are expected to discover/access, use and share their results with the professional that needs them.

AI in healthcare

One of our clients would always say “think about sitting in your big easy chair.” I definitely thought about it but never experienced it. Why?

For reasons similar to the premise behind AI. I streamlined and automated a lot of workflows for the organization so that the staff focused on the more complex issues and higher value work.

Today automation replaces about 25% of the routine transactions. AI may replace another 20%. There will always be work to be done which is why you shouldn’t put too much thought into that big easy chair yet.

The difference is that automation and AI increases productivity so that companies have the resources needed to do more. So the long story short, is that AI won’t replace jobs but it likely will change what people do and how they do it. The win is that higher value work pays more.

Non-clinical tasks will likely change first because the health and safety risk for AI is lowest. Leaders should start considering the potential impact on non-clinical workflows now and plan accordingly.

The aim of medicine is to prevent disease and prolong life; the ideal of medicine is to eliminate the need for a physician.

Dr. William W. Mayo

Post: Fixing Problems

Go slow to go fast.

Most people call us when they have a problem and they are having trouble fixing it. Reflecting back on completed projects, the underlying issues are one or more of the following:

1/ Flawed assumptions: Assumptions are made about what’s causing a problem without checking all the facts.

2/ Timeline: Deadlines to get the project done and the need to get it done overshadows whether it’s the best solution or not.

3/ Perception: People outside the department or discipline don’t understand or don’t care enough to prioritize your needs.

Taking a step back to reassess things is hard but it’s worth taking the time to get it right.

What we know to be true:

1/ People might not understand your needs but that doesn’t mean they don’t care.

2/ Often systems and processes just need to be fine tuned. Fine tuning requires less work than starting a new for your limited resources such as engineers.

3/ Deadlines are sometimes arbitrary. Know whether the deadline is someone’s ideal deadline or a real one and why.

Best Advice: Take the time you need to understand the problem. Developing and implementing the solution will go much smoother and faster.

Fair Price for Healthcare

Getting a fair price for healthcare is tricky because it’s not an apples to apples comparison.

Benefit season is starting soon. I’ve compiled some of my recent posts to help you get your arms around the latest strategies being offered to establish a fair price for healthcare services and to help you manage your total cost of healthcare.

Charges [aka List Price]:

Healthcare charges still seem to be a bit of a mystery to everyone. So let me start by explaining how most providers develop their list price and why.

The charge for most services in healthcare is based on a multiple of the Medicare fee schedule — at least initially. There are so many billing codes that it would be really hard for providers to keep up with the cost of each one which is why most base their charges on Medicare.

The tricky part is the multiple because every payer has their own methodology for payment. To capture the full amount due, the provider has to establish a charge that is sufficient to capture any outlier payer. Unfortunately, the multiple [aka: the markup] can make the charges seem unreasonable.

The charge for new services usually captures part of the cost savings so that providers are incentivized to adopt new technology. It helps them cover the cost of doing so. The charge and the price [contracted rates] consumers pay usually go down over time assuming the provider updates their chargemaster.

Then there are what I will refer to as the “fraudsters” who will keep increasing their charges to capture more and more from insurers as benefit loopholes close, such as out-of-network coverage. Their charges defy all logic and unfortunately, create an aura of mistrust.

Tip: The best way to protect yourself from fraudsters is to ask for an detailed estimate prior to service. Have them explain it to you.

Ambulatory Surgery Centers (ASCs):

ASCs offer a lower cost alternative to hospital based services and are a good option for surgeries and other service for the low acuity population. For those with increased medical risks [obesity, heart disease etc.] hospitals are a safer option.

The Ambulatory Surgery Center (ASC) industry grew rapidly from 2000–2008 largely because it provided surgeons a way to make more money from something they already do. It also gave them more say in and in some cases, more control over their work environment in terms of support staff, supplies and business practices.

Unfortunately, many were more focused on making a fast buck from the out-of-network strategy [aka: fraudsters] rather than providing an efficient service to lower the cost of healthcare. That’s changing.

Economical Credentialing and Narrow Networks:

Some health plans have been developing narrow networks that are economically credentialing some providers [aka: the fraudsters] out of their networks for past behaviors. It’s one way to lower cost but many not be a win for those that value choice.

Unfortunately, penalizing providers usually forces more consolidation which drives up price. Many ASCs are being sold to hospitals and healthcare systems that have more leverage with the payers to negotiate higher prices for their services. Pricing transparency tools that use historical claims data may not reflect the new higher prices.

Bundled Payments:

Bundled payments are catching on as a new reimbursement model in healthcare but not all bundles are the same.

Bundles are a flat fee paid to a healthcare provider for a full episode of care. By limiting the payment, it forces the provider to reduce the cost of care for the defined service and guarantee a certain outcome.

If you’re considering using bundles as a way to control your healthcare costs, there are several questions that you should be asking, such as:

1. Who are the providers included in the network? Not all providers are included in every network or selected the the same way.

2. What is the scope of service included? The services and amount of service included in the flat rate will vary bundle-to-bundle.

3. How is a quality outcome defined? Is the patient returned to pre-injury condition or returned to a basic ambulatory state or returned to work?

4. How much control do employees/patients get? Can they select all their providers or just some, the location, the time, the supplies and implants used or is that the tradeoff for a lower cost?

5. What is the expected cost savings over standard contracted rates? What level of savings makes it worth it to you?

Understand what you’re getting and trading off for a lower cost of healthcare. Bundles can pose problems is they are not Administered well because there are always some who will game the system. You have to think through these deals carefully.

Change is Hard Won

Changing the healthcare system takes time. Everyone needs to do their part to lower the cost of healthcare.

1. Healthcare Consumers: Many Americans don’t change their unhealthy habits until they have a major life event like a heart attack, cancer scare or some other health related crisis. The cost of all those unhealthy habits plus the life events drive up healthcare costs for everyone and no one wants to foot the bill.

2. Healthcare Providers: Healthcare providers don’t change until there is a financial benefit for doing so. Many providers didn’t adopt technology that costs maybe 1–2% of their revenue until the government incentivized them to do it. Why? Because they were focused on their top line rather than their bottom line.

3. Health Plans: Health Insurers don’t change their coverage and payment practices until they understand how something impacts their medical loss ratio. Untimely payment decisions make it hard for providers to change how they serve and delight patients. As you know, not many people are willing to work for free.

There are no silver bullets to fix healthcare. Americans need to take a good look in the mirror and own their part, providers need to focus more on the bottom line and insurers need to do more timely financial modeling to fix the incentives for providers.

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, telehealth appointments with Sports Medicine experts and other tips to help you achieve more success in work and life.

Lean In for Healthcare

We need to “Lean In together” to solve the biggest challenge facing healthcare now.

One of my sisters asked me when Lean In was first published if I had read the book. Even though it was getting great reviews, I had no desire to read about another women’s struggles in business and life — no matter who wrote it. However, I checked the book out of the library last week when none of the other books on my list were immediately available.

Lean In made me laugh out loud and cry because it validated so much of what I had felt and experienced over the course of my professional career and life. Some of Sheryl’s personal stories are funny but the book is also filled with some good information and stats for those struggling with the idea or the reality of balancing their careers with family life. It is a book that both men and women should read to inform their perspective and behavior towards one another.

Ironically, I was at home reading Lean In while millions of others all over the world were marching for equal rights. I didn’t join the Women’s March in San Francisco mainly because large crowds make me anxious. To some degree, I regret it now. Opportunities to make our voices heard matter even if they are deflected by those who need to hear them. They will eventually have to listen.

It will come as no surprise to those who know me well that I was also a little mentally preoccupied. I was thinking about the expected changes in healthcare, my HBA mentoring group and recent conversation with others in the industry.


When I was working for one of the California based payers years ago, I said to the then VP of Strategy that everyone involved in healthcare needed a voice at the table to solve the problems. It wasn’t anything that I had read or heard, but rather what I really felt after working on both sides of the industry for about five years. When the ACA was drafted, everyone involved in healthcare had a voice at the table.

Like any other strategy, the plan for the ACA was hatched with the best information available at the time. Parts of it worked as expected and as with any other strategy, other parts need to be adjusted now that we have more information. It should come as no surprise to any of us especially those involved in healthcare. Repeal and replace sounds more dramatic but “the replacement” is likely to have many of the same elements as the ACA.

The biggest issue that remains is the rising cost of healthcare. There may be some fat left to be squeezed from insurers and prescription drugs. However, healthcare providers seem to be tapped out. For me it’s evident by the level of tension between physicians and administrations.

I don’t believe that we can financially engineer our way out of the rising cost of healthcare because the medical risk for the country is too high. Like the banking industry leading up to the financial crisis, the medical risk is spread across the industry with some verticals better capitalized than others to absorb it. As the screws get tightened, parts of the system will be squeezed to the breaking point. Unfortunately, it’s likely to be the parts serving the most vulnerable Americans.

Mentoring Group:

I participated in the inaugural HBA mentoring group around the time of the financial crisis. It was a great opportunity to meet other women in the industry and gain the perspective of those working in different fields. What’s more interesting to me now having read Lean In are the limiting beliefs that are holding some of the women back.

We did an exercise to help one another prepare for their next job. As part of the exercise, we reviewed the description for a desired job and resume for each person in the group. One of the women in the group is a highly trained scientist working in quality assurance for a biotech company. When she reviewed my resume and the job that I had selected, she told me that she didn’t see the exact qualifications for the job on my resume. She was looking for an exact match. When I selected the job, I was looking at it with a skills and competency lens. I didn’t need to have the exact experience to know that I could do the job as described. I chalked up her feedback as that of a scientist. However, now I understand that her perspective is how most women think which can be limiting to not only her but others including me. Reportedly, men don’t look for an exact match when they select and apply for jobs. My guess is that they may not hire that way either.

Communication was another problem raised by the group. The quality scientist was upset that her manager was always late to meetings. The group concocted this very elaborate plan for her to address the issue. I suggested to her that she just tell her manager “your tardiness isn’t working for me”. No one in the group believed that it could be that simple and dismissed my suggestion. However, Sheryl relays a story about Mark Zuckerberg joining a group at the office to learn Mandarin. When one of the women in the group was talking in Mandarin about one of their managers, Mark kept asking her to simplify so that he could understand what she was saying. Finally, she blurted out “my manager sucks.” Now that is something simple enough that everyone can understand and work to fix.

Mentors and mentoring groups are good because they open us up to different perspectives and challenge the beliefs that are holding us back. We need to get out of our comfort zones and if we are going to rise to the challenges ahead.

Recent Conversations:

Last week, I was able to meet with other executives working in different verticals of the industry. We discovered some shared experiences and mutual interests but what I appreciated most was being able to say “what do you think?” No one person has all the answers and it serves us all to do a reality check on your own perspective and role. Some of us are carpenters fixing problems within the existing system as we go and others are disrupters looking to turn healthcare upside down. We need both to solve the biggest challenges facing healthcare.

With that said, I initiated a new circle for healthcare professionals on the Lean In web-site so that we can meet, share, learn and challenge one another. I don’t have specific goals for the circle other than to give everyone a seat at the “table” who wants one.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, advice from professionals and other tips to help you achieve more success in work and life.

Understand your Brand

Whether you know it or not, you have a personal brand.

A new year is right around the corner. You or someone you know may be thinking that they need or want to do something different and need help refining their personal brand.

One of my friends found a mentor earlier this year because she is contemplating the next step in her career and felt that she could benefit from having some guidance. We went for a walk this weekend and when I asked what was new, she told me about her recent meeting with her mentor.

There may have been more said during the meeting but what was relayed to me was that her mentor suggested that she develop her brand attributes and establish a schedule for regular blog posts. It was clear that she didn’t know how to start.

I’ve outlined the plan we talked through during our walk this weekend. It’s designed to be done over the course of a year. You may be able to do it faster.

Establishing a personal brand

If you’ve been hired to do a job, a project, a gig of some sort then you already have a brand. It’s the reason people chose you over all the other people applying, pitching or trying out for the gig. Do you know why they chose you and not someone else?

The first step to developing your brand is to understand why someone chooses you. If you’re not sure — ask your your boss or your client — why they chose you.

The plan

I started living my life in quarters when I started my own consulting business back in 2000. Not many people other than those sales likely think of life in quarters, but for me it helps set my focus for a specific effort and gives me a specific timeframe to evaluate that effort.

Thinking in quarters, we talked through a plan to understand and refine my friend’s personal brand so that she’s ready to start a new consulting business in 2018.

Q1: Discovery:

Collect the information needed to define what and who. During the first quarter of 2017, my friend is tasked with talking to at least three (3) people that she has worked for in the past to learn why they chose her and what she did that they valued most. I know some of her colleagues so we talked through some specific people and what to ask. In general, you want to consider the person that you’re speaking with whether they are or were your manager, client, colleague or co-worker to frame your questions in a way that draws out the answers you need.

Remember, you’re not looking for flattery but rather honest input about the value you bring to the organization, department, project, team or whatever is relevant to your relationship with that person. Your job is to uncover the attributes that they find valuable so that in the future you can identify others like them that will realize similar value.

Q2: Review the feedback

Define what and who. During the second quarter, my friend will be reviewing all of the responses carefully to distill the themes. She needs to identify the cross section of what people value and what she likes to do and wants to do next to uncover the “what”.

Some of the answers may be revealed quickly and others may be harder to distill. People at different stages of their career, different levels and with different backgrounds will likely respond differently which is why you have to look for the common threads or themes. If the answers you need aren’t clear, ask more questions, speak with additional people or do some research about the field to get the needed clarity.

Q3: Test your work

Publish a few blog posts. During the third quarter, my friend will be writing and publishing a few blog posts to test her hypothesis of “what” and “who”. The tone of her posts will also help develop the “personality” of her brand and flush out a manageable publishing schedule.

Blogging is no easy task which is why many companies outsource the work to professional writers. It’s something that I’ve always enjoyed but it requires creativity and discipline. If you haven’t done much writing in a while, start slow and don’t be too critical of your work. It’s a skill that gets better with time. Publishing has never been easier with so many different social networking sites.

Q4: Commit to your Brand

If everything has gone well in Q1 — Q3, my friend will be ready to formalize her “brand attributes” next year at this time. Brand attributes are the foundation of the brand and include the name [if different than her own], logo, personality and pricing.

Knowing your brand attributes is just as important if you’re looking for your next job.

Photo: Your logo may be a professional photo that you can use on a blog and all social sites you choose to share your ideas, case studies and examples of your work.

Posts: Your personality should come through in your posts so that people hiring you or who will be working with you, get a sense of you before you ever step foot through the door.

Pricing: Your pricing should be reflected in the compensation package you negotiate. Understanding the fair market value of your work is the first step in negotiating a fair package.

I was introduced to the idea of a personal brand years ago at a HBA event when Ellen Looyen presented. I hope the process outlined above makes it easier for you or at least gives you some ideas of how to start. Let me know how it goes.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

Join us on Hello Workout for help covering the weekly minimum requirements for good health, advice from professionals and other tips to help you achieve more success in work and life.