Healthcare Transformation

Workplace Wellness

Leading edge companies are coaxing their employees into the last frontier of the culture change underway in the healthcare industry – wellness.

For many the thought of employers accessing their health information seems invasive and worrisome because the use of their information may seem like more of a motive or agenda to rid the company of people with negative health habits.  Most people know that the obesity rate is on the rise, smoking causes some serious health issues and the stress of balancing the demands of life is growing as more people become caregivers for children and/or aging parents. 

The problem is that the majority of people cannot see their own health risks.  People often rely on friends and family to help them with other decisions and see issues in their life, but relying on friends and family to help with their health issues is not working.  Let’s face it – talking with friends and family about how you feel about your body or life invites comments and judgements that can be destructive to the relationship.  No one wants to hurt the feelings of someone they love or care about which is why it is so difficult.  So the question then is who should provide and/or hold the mirror to help us see our issues?  

Employers are stepping into the role to provide the mirror and in some cases, are holding it for us.   Why the employers?  We all have a relationship with our employer and there is a mutual benefit if we are healthy and happy on the job and in our individual lives. Several companies on the leading edge of wellness recently spoke at the Silicon Valley Leadership Forum Wellness Summit about their journey into wellness and the success of their programs.

Progress is being made but there is still a long way to go to ignite the wellness revolution in America.  So let’s revisit the culture change framework to get a better understanding of where things are now and what still needs to be done.

Getting Started

Change starts with establishing new behaviors.  The way we work, what we eat and how we live has changed since employers started providing healthcare insurance.  The system that served us well way back then is not working for many people now or the companies competing in the global market.  

To get a competitive advantage or to just level the playing field, some companies are shifting more of the financial burden onto employees to help reduce their labor costs.  However, the leading edge companies are showing us that there are better ways to go about it.  They are providing the mirror in the form of biometric screenings so that employees learn their numbers and know where they stand on health.  Many are starting to change workplace policies, implement benefits to promote healthy living and model healthy behavior in the workplace.  How you ask?  

The programs are as different from company to company as the people they serve.  There is no “silver bullet”.  However, there are some common elements such as discounts on programs such as Weight Watchers to promote diet modification, company gyms or discounts to clubs and gyms to promote regular exercise, standing and treadmill desks to promote movement throughout the day, the use of yoga and meditation practices to promote mindfulness and stress reduction and individual support whether in the form of concierge services, health coaching or on demand solutions.  

If there is one “silver bullet” common to all programs, it is the use of financial incentives to gain participation and engagement.  The promise of better health is simply not enough at this point.

Making Progress

Progress makes people happy. There are glimmers of happiness with the wellness programs in place now.  The leading companies have figured out the right elements of the program needed and have the leadership and financial support to fully implement the initiatives for a successful program.  Other companies are struggling to develop a meaningful program because the Return On Investment (ROI) is not clear to the leadership and is generally not immediate or certain over the long term.

A study was done of the Johnson and Johnson wellness program in  2010 that showed a 3.7% lower average annual growth in medical costs and a return of $1.88 – $3.92 for every dollar spent on wellness.  The Johnson and Johnson program is notable because it has been in place the longest of any program and is routinely evaluated and modified to meet the changing needs of their employees.  Other studies done by Johnson & Johnson since the 1980’s report improved employee health, reduced inpatient healthcare spending and decreased employee absenteeism – all indications of happier employees.

Health is part of the DNA of Johnson and Johnson.  The company’s Credo from 1943 reflects their commitment to healthcare providers and the health, wellness and safety of their employees.

Earning Support

When you tell people your goal and they can see your commitment you will get the support needed to achieve it. Getting people to tell employers their issues and goals can be a little tricky even though there is a mutual benefit. 

Employers can do a lot with the the relationship that exists with employees but like with any relationship there are limits as to how far the relationship can go.  Depression is a bigger issue than diabetes and an issue that often goes unreported because of the stigma around mental health.  

Google reported a rate of 6% but suspects that depression is more prevalent in their workforce.  There was discussion at the summit around ideas and initiatives to support people with depression but most panelists acknowledged the challenge of getting help to the right people at the right time.  So who’s in the best position to help with this kind of issue?

Who is the question that remains to be answered.  It may be the employer, it may be friends and family as health and wellness initiates make it into the home, it may be healthcare providers or it may take the entire village to pitch in, help out and provided the needed support.

Progress is being made to promote health and wellness but conversations are just starting about work life balance and/or work life integration in terms of what makes people happy and more productive.  

About the Author: Shannon Smith is a strategist with over fifteen years of experience helping companies achieve greater success. 



Like most things in life, competition is not all good and not all bad but competition can be unhealthy and destructive if it is the end game.

Peter Thiel, founder of PayPal and other ventures including Founders Fund, gave an interview last year about his investment philosophy in startups.  As part of his explanation he talked about his issues with competition – not because he believes in monopolies – but rather to encourage more entrepreneurs to focus on solving problems that have no solution or competition.

He had three main reasons for encouraging entrepreneurs to solve problems that have no solution or competition.

1. Competition erodes pricing power and incremental improvements often result in razor thin margins. When the margins become too thin, people fight over “stupid things”.

2. Competition makes people work hard but it also makes them compete against one another.  Many people “get hooked” on competing and often miss the open door to new and better opportunities.

3. Competition on a global scale is good for those that can rise above it.  However, “God” might even find it hard to watch given how hard it is for those that have to compete against billions of people who make a fraction of their pay.

One of the examples used to support his argument was Apple versus the 600+ apps in the App Store.  Apple has tremendous pricing power because the company provides a unique product and exceptional experience whereas the apps all fall into one of a few categories.  Few apps if any are significantly better than the next to warrant premium pricing yet what seemed to puzzle Peter was the number of entrepreneurs still building new apps rather than looking for the open door.

So why aren’t more people looking for the open door?
As Peter acknowledged, the creativity that fuels innovation takes more than putting on black clothing and calling yourself a creative.  It takes time to see opportunities and for those competing for their next job, a new assignment or a big raise, time to observe, think, tinker and conceptualize is probably limited.

Is there more to the story?
There is a little less venture in the venture capital today compared to when PayPal was founded.  Back in the late 90s, ideas got funded.  PayPal burned $10M a month to take over the world. Today, people and evidence get funded.  Many of the startups with big bets on meaningful innovation today are founded by people who were successful in the 90s.  They have a track record and their own money to invest.  Whereas most entrepreneurs starting out today are following the lean launch pad philosophy of developing customers early and building a minimum viable product (MVP) to test the market as a way of hedging their risk.  It may also explain why so many talented people are focused on apps rather than meaningful innovation.

Are there lessons to be learned from failure?
Peter came up a little short on the lessons to be learned from failure but it something that I can speak to from my own experience.  I founded my company back in 2000 and launched our e-learning initiative for the healthcare market just before the dot com crash.  I had recovered and was building again when the financial market crashed in 2008 which basically ended the initiative when our consulting revenue also dried up.  It was heartbreaking and like many entrepreneurs, I blamed myself for not finding a way forward.  Years later a friend said to me “Everything you did made sense.  You were just underfunded.”  Why we were underfunded had a lot to do with the industry.

What does the industry have to do with it?
Many of the most highly regulated industries such as the airline, automotive and healthcare are some of the most competitive industries.  For the most part, they all have razor thin margins making them some of the hardest industries to change.  Without funding from the government to reduce the risk for entrepreneurs and the venture community and incentives for providers, few would undertake the innovation challenge especially if they have already tried and failed.  What remains to be seen from the changes underway in the healthcare industry now is whether the margins of the companies serving the market will be improved and sufficient to support further innovation going forward.

In summary, competing has become a state of mind for most people.  So ask yourself…Are you competing for something worthy of your time and effort?

About the Author:
Shannon Smith is a management consultant with over fifteen years of experience helping companies achieve greater success by helping leaders shape strategy, implement systems and processes and enhance capabilities.

Culture Change

Changing the culture of the healthcare industry is no easy task but progress is being made.

Think about the last time the leadership at your company announced a big change. Did you get onboard the first time you heard the presentation or did you have reservations? Most people have reservations especially if they haven’t been involved in understanding the issues and formulating the strategy supporting the change.

Many in the healthcare industry understand that the cost of care is increasing faster than the economy can support and that we need to be part of the solution. The challenge is that no one has had a clear picture of the future or a clear understanding of how it will impact them. Consequently, many have felt the same reservation as when a company tries to undergoes a culture change. Complicating the culture change required to support Accountable Care are past failures to integrate the healthcare system and sustain health maintenance organizations (HMOs). Many HMOs were not financially viable over the long term which makes many professionals wonder what is different this time. However, it is becoming more clear with the policy changes rolled out with the health exchanges.

The main difference are the incentives and penalties that are impacting everyone one way or another. There are only two levers left for insurers to play with to make coverage affordable. The two levers are the deductible and the out-of-pocket maximum. If insurance remains a requirement for all Americans, there will be more and more pressure on the healthcare system to figure out how to get the broader population to live healthier and to provide cheaper care.

The stages of a culture change make it easier to see the process underway towards achieving healthcare consumerism.

Getting Started
Change starts with establishing new behaviors. The Affordable Care Act gave the industry the incentives needed to start changing how providers work. Gone, in large part, are the paper charts. Most providers are using an information system referred to as an electronic medical record to capture and share medical information.

People outside of the industry probably forget what it was like when their industry first automated because it has been so long. I remember the first applications that we adopted for work paper documentation in public accounting and internal audit. We had similar gripes and issues with those systems as the providers have with the systems that are being implemented now. They slowed us down because they were difficult navigate and use. Given our tight deadlines, many opted to continue on paper rather than take the time needed to master the new flow.

The difference in healthcare is that most providers don’t have a choice. The penalties for not using an electronic medical record are too punitive for the organization so clinicians have to persevere and master the new workflows or persuade someone to replace the system.

Making Progress
Progress makes people happy. It is hard to measure the mood of an industry but happy might be a stretch at this point. There seems to be more of an acceptance for the new methods and processes of documentation. Clinicians are finding ways to deal with the negative affect on their time at least in the short run while the rest of us scramble to develop solutions that make it easier for them to get their job done and provide meaningful insights about patient populations.

The other factor contributing to our progress as an industry is the constant messaging from our political leaders about the importance and need to achieve affordable care. That constant messaging is in essence teaching us a new language. Words like value, accountable care, lean, electronic medical records, health information, big data are becoming part of our everyday language. The mindset of healthcare consumerism is reinforced as more people learn the language and use it in their every day conversations.

Earning Support
When you tell people your goal and they can see your commitment you will get the support needed to achieve it.  I can honestly say that having people rally around you in support of your goal is one of the most inspiring and rewarding experiences that I have ever felt. How this level of support manifests in the industry is yet to be determined. However, it all has to start with the individual whether you want to refer to them as a patient or a healthcare consumer.

The patient engagement systems that reward individuals for healthy behavior offer potential. The systems now are essentially rewarding and encouraging healthy people for doing what they already find personally rewarding. To really impact the cost of care we have to figure out how to engage the people that would benefit the most and get them on the path to healthy living. While we might be looking for the “silver bullet” as we routinely do when faced with a big challenge the solution is probably multifaceted. Whatever the right solution is for the individual, healthcare providers are in the best position to keep their patients engaged in the journey that will reward us all.

“Change is hard because people overestimate the value of what they have—and underestimate the value of what they may gain by giving that up.”

James Belasco and Ralph Stayer
Flight of the Buffalo (1994)

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.

Engage Men

Studies published by HHS report that women consume about 12% more healthcare services than men because they are more likely to have regular checkups and doctor visits and take prescription medications. Men have typically delayed care until they have a problem that requires costly intervention – but with emerging technology and new options for care that could change.

My last post about what patients value was distilled from comments made by women. Consequently, I was left wondering whether men and women have shared values when it comes to healthcare or not. So I found a comparable healthcare service for men and read the YELP reviews for several providers. There were very few reviews written but there were some notable comments.

Data: One of the reviews described the charts, graphs and regression analysis a provider used to demonstrate the potential risks and outcomes of the specific procedure and the risks relevant to the author. The use of data in that way seemed to empower the author to make a decision about his care. Conversely, none of the reviews written by women referenced data or the use of data other than some basic stats about outcomes.

Advise: Another review was written by a man that underwent a procedure that didn’t result in a noticeable difference in his condition. In his review, he summarized his condition and provided advice for men with the same condition that may be considering treatment. Conversely, reviews of a similar nature written by women offered an opinion about their provider more often than advise about their treatment.

Given the limited reviews, I expanded my search to a medical group known to serve the same commercial patient population. There were about 60 reviews from men which accounted for about 25% of the total.

Cost: Almost every comment was a complaint about the cost and/or the incompetence of the billing staff. Authors used expressions like “watch your wallet” in reference to the high cost of routine services and the additional fees charged during annual checkups. Many reported discrepancies in trying to reconcile their provider statements with the remittance advice from their insurer. One even claimed to be “allergic” to the billing and collection practices of the provider. It makes me wonder whether men reconcile statements more closely than women or if they are just not as familiar with the documents and processes.

Granted it still isn’t enough information to draw definitive conclusions about what men value in the context of healthcare. However, it was enough to spur thought about how to engage men in their health in ways that could help reduce their cost of care and the potentially the care of others in their family.

Digital Health: Following the NIH annual exam recommendations, much of the annual exam for men could be completed using emerging digital health solutions in the near future.

Provider Portals: Data from the digital health solutions offer providers an opportunity to build early relationships with men by providing them with their health risks and outcomes profile and reviews by procedure to empower men in decisions about their health.

Minute Clinics: Simple menus of services will make it easy for men to fulfill all the requirements of an annual exam especially now that prostate screening exams a thing of the past. Hard to understand bills and statements will likely be a thing of the past too.

High Deductible Plans: Men may become more influential in family decisions about health and healthcare consumption given that there is more at sake. More employers are offering high deductible plans with healthcare savings accounts and for some it will be the only option.

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She has successfully led the transformation of ASCs and hospitals, helped technology and device companies with product and customer development and advised other professional firms on transactions.