A formula for market-based, business driven healthcare reform

405399_10150512012214683_707079682_8582052_1263712513_n[1]Last Thursday and Friday I traveled to New York City to participate in an event organized by Virginia Mason Medical Center (VMMC) in Seattle.  The CEO Health Care Summit, held at the Waldorf Astoria Hotel, drew together a select group of business leaders from across the nation to learn why the business community must take a front seat on the journey to healthcare reform in America.  In fact, the business community has so much at stake, not only must they take the front seat, they need to take the wheel.  With health insurance costs now averaging $20,000 per year for the typical employee (employee and spouse), businesses are major purchasers of healthcare services in America.

Most businesses hold their suppliers to very high standards.  They expect proven value and high quality from the products and services they purchase.  Yet when it comes to healthcare, are businesses demanding and getting value and quality for the money they spend?  Do they purchase healthcare services with the same scrutiny they use for everything else they buy.  Furthermore, can the healthcare industry even measure the quality it delivers? 

clip_image002The leaders at Virginia Mason Medical Center believe that businesses have every right to expect high quality and zero defects from healthcare just as they do from the providers of any other product or service they buy.  Using what’s become known as the Virginia Mason production system, the medical group has been systematically driving out waste and inefficiencies while improving the quality of the services they deliver.  They formed a market-place collaborative to work with the business community and health insurers to standardize protocols for some of the most common and expensive conditions like low back pain, joint pain, headache, and depression.  Along they way, they have developed tools to measure what they do and mistake-proof every process.  Much of this work is based on lessons learned from studying lean manufacturing at Toyota and applying these principles to the practice of medicine. There’s a terrific book by author Charles Kenney that documents this work.  The title of the book is Transforming Health Care - Virginia Mason Medical Center’s Pursuit of the Perfect Patient Experience.  I also profiled VMMC’s quality improvement initiatives on a past episode of Microsoft Health Tech today.

At the CEO Summit in New York, I had the honor of participating in a dinner discussion Thursday evening during which Mr. Kenney, Virginia Mason CEO, Dr. Gary Kaplan, and I shared our perspectives on the steps and tools needed to improve healthcare quality.  I also discussed some of the things Microsoft is doing to help healthcare providers measure what they do, and help consumers make better decisions about the care they receive. 

Here’s a high level summary of what we discussed at the CEO Health Summit in New York City.  If you run a business and purchase healthcare for your employees, pay close attention to each item on the list.

The three requirements for affordable health care

1.  Production of quality by providers

2.  Payment for quality by health plans

3.  Purchase of quality by employers

The five indicators of health care quality

1.  Same-day access

2.  Rapid return to function

3.  Evidence-based, appropriate care

4.  100 percent patient satisfaction

5.  Affordable price for employers and providers

The seven steps to affordable health care

1.  Use purchasing power to obtain quality and value

2.  Define health care quality with providers

3.  Prioritize high cost conditions and high cost patients

4.  Choose providers organized with reliable systems

5.  Pay for quality and only for quality

6.  Purchase quality and only quality

7.  Reduce the need for health care services

If you are a business executive and would like to learn more on how your organization can participate in a market-place collaborative to drive greater quality in the healthcare services you buy, Virginia Mason Medical Center will host another CEO Health Summit event on January 26th and 27th at the Fairmont Hotel in San Francisco.  You can find out more and register by following this link. As I did in New York, I’ll be joining the group for dinner and discussion on Thursday evening.

Next week I’ll be meeting with Microsoft customers and partners at CES in Las Vegas.  I’ll also be speaking on leading health technologies and trends at the UnitedHealthcare booth at CES on Wednesday, January 11th, at 5 PM.  I hope to see you there.

Bill Crounse, MD              Senior Director, Worldwide Health           Microsoft

Comments (3)

  1. Healthcare says:

    Nice topic. Is microsoft launching any healthcare software in future?

  2. hlthblog says:

    Thanks for writing.  Microsoft and its worldwide partners offer health solutions in the following areas; connected health infrastructure, communication and collaboration, and health data modernization.  In addition, through our health solutions group we offer a unified intelligence platform (Amalga), identify and access management solutions for the health industry, and for consumers, HealthVault to help manage personal health information. You can learn more at http://www.microsoft.com/health .

    Bill Crounse, MD

  3. Jonathan Krasner says:

    You left out a major point (but may have touched on it with #7) above.  Americans must recognize that they have to pursue health lifestyles.  Obesity, diabetes, alcoholism, smoking and drug addiction account for a significant amount of healthcare spending that is totally unnecessary.  Consumers need to be held accountable for healthcare issues under their own control, and penalized in the form of increased payments for bad behavior.

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