May 2017

Industry Perspectives: Health Care Needs a Revolution
By Bill Bysinger, PhD, MBA
For The Record
Vol. 29 No. 5 P. 6

Having been involved in the health care profession since 1980, I continue to be frustrated with the lack of real change or improvement in the industry. Much of this is the fault of managers and executives who have not made sound strategic, or tactical, decisions regarding process improvement and cost management.

Most health care decisions appear to be made with the organization in mind, not patients, who are supposed to be the focal point of all operations.

Because EHR systems are based on models that regress process improvement, the majority of physicians are dissatisfied with the technology. With little direct input from physicians on how best to improve care through technology, the resulting systems were destined to cause process and patient interaction problems.

The Reality
Health care has had the same driving forces for change since the 1980s based on the following five fundamentals:

• Patient access to care and information: improve access to high-quality care and integrated information.

• Cost containment: cost accounting and management must be applied.

• Effectively measure the quality of care: is elusive and not well defined.

• Safety and satisfaction: still receives low scores from patients as well as physicians.

• Continuous process improvement: rarely exists and still does not appear relevant to the industry.

In an attempt to address these fundamental goals, the following industry-driven models have come and gone (with two exceptions) over the last 35 years:

• Managed care (1980s): failed to improve most fundamentals.

• Integrated delivery networks (1990s): failed to improve most fundamentals.

• Health systems integration (2000 to 2010): increased costs and failed to improve fundamentals.

• EHR and PHR implementations to improve patient encounters (2011 to present): driven by the Centers for Medicare & Medicaid Services (CMS); there have been few successes and little improvement.

• Value-based care (2015 to present): driven by CMS, the initial effort focuses solely on payment methodologies at the expense of the fundamentals.

The problem has remained the same. Billions of dollars have been spent on health care systems and technology solutions that have not had a dramatic effect on lowering cost, improving quality and satisfaction, or creating better information access.

Why? Because the health care industry is not focused on the following real problems:

• a lack of process management to improve efficiency;

• an absence of sound cost accounting to create superior cost models and expense tracking;

• data integration is difficult, meaning provider access to integrated patient information does not really exist;

• systems interoperability and process integration are challenging because most vendors remain proprietary;

• a universal patient-centric data model does not exist, even though it is critical to improve care quality and patient safety and present integrated patient information; and

• a disregard for information architecture, which is critical to reach the integrated care model demanded by value-based care.

As a young industrial engineer, I was taught how to apply quality, continuous process improvement, and cost accounting principles by thought leaders such as Peter Drucker, W. Edwards Deming, and Philip B. Crosby, who all believed these to be the most important methods and disciplines to achieve process and business success.

Surprisingly, many health care organizations have not internalized these critical operational issues, and continue to struggle with process and industry policy changes while attempting to lower costs without sacrificing quality and service.

Health Care's Leadership Problem
There are few health care executives who have worked in an industry that focuses on cost containment, process efficiency, and revenue maximization. Most other successful industries, such as manufacturing, distribution, finance, retail, and automotive, prioritize these issues. In contrast, rarely does health care rate these objectives as urgent.

In addition, the health care industry fears risk taking and creative management. In fact, the majority of payer and provider organizations avoid change. Meanwhile, thought leaders in other industries embrace change and propel their organizations through new approaches to processes, cost management, and quality.

In large part, this is why, operationally, health care remains one of the least efficient industries. The good news is a new operational model has emerged that provides hope and encouragement that the industry is finally on the right track. The ambulatory surgery center market takes an entrepreneurial approach to new methods of care delivery and operations. Organizations in this segment seem eager to grow through better process and cost management.

Health care must stop devoting too much time to applications software and begin focusing on technology adaptation to solve the fundamental problems associated with continuous process improvement, cost containment, data integration, and interoperability. Instead, spend that time figuring out how to empower providers and patients through information and process transparency at the point of care.

Those organizations looking for real change are creating a high demand for health care technology that can adapt to change, integrate seamlessly without disruption, not be proprietary in its approach, and be applied rapidly to make significant progress in continuous process improvement and efficiency.

A Watershed Is Needed to Effect Change
Based on my research and analysis, a new health care technology model must be developed that can improve cost, quality, and information access, the original high-level tenets of managed care's vision during the 1980s and 1990s. However, there is no evidence that HIT vendors are addressing the requisite infrastructure issues. All I see are new software products being introduced to further automate existing processes. Similar to what has occurred during the EHR revolution of the past 15 years, these solutions have had minimal effect on cost containment, integrated information access, or improved quality. In fact, most have resulted in less efficiency, more confusion, provider dissatisfaction, and little change in the fundamentals of good health care operations or care process improvement.

A new system architecture and methodology are required to empower change, embrace data integration, and deliver interoperability to create a higher level of medical management and care process improvement. These new solutions must be born from a forward-looking model that will adapt to change, be rapidly implemented, and produce ongoing continuous process improvement with proven return on investments.

— Bill Bysinger, PhD, MBA, has developed health care operational and clinical applications, software products, and solutions for the provider, payer, health system, and managed care markets as well as managed and consulted in clinics, medical practices, and hospitals.