HBR on Managing Health Care

I’m not saying anything new when I say the health care industry in the US is a mess. I like medicine, and I like technology, so I recently picked up the Harvard Business Review on Managing Health Care for inspiration on how I might make my own contribution to the industry. This book is a compilation of 8 case studies on the health care industry. While it’s a bit dated (it came out in 2007), I think it still does justice to the absurdity of things happening in health care.

I come from the technology side, where all of the engineers and scientists are eagerly developing the next breakthrough in medicine. Coming from such an environment, this book was almost a slap in the face of reality for an engineer like me. There are much larger problems than the nitty-gritty of developing a medical technology—problems that can halt the proliferation of even great technologies that work well. Problems aside, I think these case studies give some great solutions to the issues. Here are the three solutions that seemed the most important to me:

  1. Make “focused factories” instead of integrating vertically. “Factories” are organizations that focus on specific diseases (e.g., a kidney center for all cases stemming from renal problems). These factories are more efficient at delivering better, integrated care to patients than systems in which patients are given fragmented care, rife with referrals and inefficient information transfer about the patient/case. Hard data indicates that the costs per case, length of hospital stay, and patient outcomes improve with focused factories.
  2. Switch to consumer-driven healthcare. Consumers aren’t stupid. Before people were given control over their retirement funds, it was feared that the general public wasn’t “sophisticated” enough to make their own decisions about their finances. Some argue that the same fears are undermining efforts to put people in charge of their own medical care. Consumer-driven healthcare would allow people to have flexible spending accounts with which they can pay for care specific to their needs, rather than enrolling in one-size-fits-all managed care plans that effectively make major care decisions for their enrollees.
  3. Enable disruptive and simplifying technologies. What would have happened if a regulatory agency in the 1980s declared, “microprocessors are inferior to logic boards, so all PCs must use logic boards”? The word, “iPhone”, would be nothing more than a typo today. The book’s final case study on disruptive innovations in health care suggests that regulatory bodies are doing something similar to the health care industry today, legally requiring highly specialized clinicians to make diagnoses that could easily be done by “less expensive” people. Basically, doctors are diagnosing the sniffles even though nurses have sufficient training to do the same. Since this case was published, perhaps the increase in physician’s assistants is gradually alleviating this problem. Nevertheless, the authors call for the need to invest in simplifying technologies that reduce the complexity-driven overhead of medicine. If the government, insurance companies, hospitals, doctors, and patients embrace such technologies, then clinicians’ skill levels will be more appropriately matched to the complexity of the medical problems they’re given.

These are the three things I’ll be thinking about while I’m on the drawing board next time. This was a great book that was a quick read, so I highly recommend it. It not only gave me a better (albeit general) understanding of the health care industry, but also a perspective on its future.