Healthcare Spring

Thanks to the New York Times for its continuing, excellent reporting on exploitative pricing in the American healthcare system as exemplified by Elizabeth Rosenthal’s article, “American Way of Birth, Costliest in the World.”  But, healthcare is not alone.   All industries have taken a turn for the worse in sticking it to customers in a variety of ways including extra fees whenever they can get away with it, data mining to manipulate buying habits, advertising chicanery, “self-service” to deflect costs and aggravation, lack of transparency, and more.  This is all done in the name of “optimizing revenue enhancement” to improve business outcomes.

The paradox in healthcare is that while healthcare is a profitable industry, ranking 14^th among the top 35 industries, its outcomes are the worst of its peer wealthy countries and its efficiency is the worst of any industry.  Healthcare is also different in that it is not selling laundry detergent, airline tickets, or car loans.  It is selling a solution to a basic human need based on the belief that without your health you have nothing.

Another paradox is that healthcare uses science more than any other industry to understand the causes of diseases and treatments.  But when it gets to the business side of delivering on the research in hospitals and doctors’ offices, people have just over a 50/50 chance of getting the right care at the right time. 

We have known how to fix these seemingly intractable problems for a long time, e.g. with global payments based on outcomes.  But markets cannot be depended on to do the right thing for society and governments are shackled from doing more largely because of special interests.  What are other alternatives?

One obvious solution would be for healthcare businesses to recognize the upside opportunity to distinguish themselves in the market by filling the void and actually producing exceptional outcomes at a fair cost.   Could a company differentiate itself if it demonstrated that its members experience better health and outcomes than the competition?  Statements like “Our health plan members live 5 years longer” or “Our heart attack patients live longer with a better well-being” should get some traction in the marketplace.  This would be substantially more creditable and honest than paid advertisements for “America’s Best Doctors”.  Healthcare companies have the data.  Why don’t they use it for this purpose?  I suspect that they cannot show the difference in outcomes to their advantage.

A second possible solution would be for government to step in and correct market inefficiencies and abuses.  Obamacare was a solid step in the right direction.  Much more is needed.  But, this Congress will not allow any more action on healthcare or seemingly anything else for that matter.

A third is to recognize the customer as more than something to be exploited.  After cutting costs following the Great Recession, many companies say they understand that the route to profitability is by growing the top line by understanding and serving the customer and actually having a relationship with them rather than selling them things through mass, impersonal, customization.  So far, this appears to be more of a marketing campaign than a true actualization of the appreciation of the customer.  Mahatma Ghandi talked about customers in a very respectful way, “We are not doing him a favor by serving him.  He is doing us a favor by giving us an opportunity to do so.”

Absent any action by the healthcare industry or by government, what is needed is a “Healthcare Spring”.  People need to stand up and revolt against an “oppressive regime” that robs them of wage increases (eaten up on healthcare insurance), does not produce on its purpose and promise to improve health, and does it all in an authoritative way that lacks transparency and citizen input.  They need to say “no” to the covert collection of their personal data which is used to manipulate rather than to heal.  And they need to recognize their own contributions to the pricing wars by acknowledging their own behavior to aggressively shop on price (for most products) and to demand more and more useless health care because “it is better to be safe than sorry”.  With the Healthcare Spring comes the reality that people need to step out of the shadows and engage in the co-production of their own health and make trade-offs that are right for them, their communities, and the Nation.

Big Data for Customers, First and Foremost

Knowing the customer is key to winning in the marketplace.  Those companies who know more, sell more, and can achieve long term loyalty and optimal lifetime value. 

Knowing citizen customers in the public government sphere has been demonstrated to be important in winning elections and in preventing terrorist attacks and finding the bad guys. 

Knowing involves more information.  The quest for knowing-it-all means that we live in a surveillance society.  There’s not much that we do that is not digitized.  Data streams that feed surveillance are far flung and include mobile communications, web interactions, biomedical devices, social media, video surveillance, and much more.  This boundless personal data has become increasingly more manageable and valuable due to significant strides in technology. 

Knowing-it-all is all about creating…intimacy.  The more intimate knowledge of one’s behavior and habits leads to more success in selling products and services because the selling can be (almost) customized to a market of one.  But the intimacy is often strange.  It’s not like we are having a conversation!   Firms and government can know more and more about you without you even knowing you have a suitor, or consenting to it for that matter.  The data that streams off you is snatched.  It is free “natural resource” to those doing the snatching.  But it is yours.  The relationship has not been reciprocal.  And who wants that kind of a relationship?

Turns out that, so far, people don’t seem to mind.  Polls show that people are not terribly concerned about the government’s collection of “metadata” on everyone’s phone calls as long as it put to good purposes like averting another terrorist attack and does not result in an FBI agent lurking in the yard or taking out your daughter’s hard drive.  And people seem to yawn at the notion that every keystroke is processed by cookie crawlers that make judgments about one’s fitness for an receiving an advertisement, job or loan. 

But there may be a looming possibility of a Data Spring.  Like the Arab Spring and uprisings in other countries where citizens reach a tipping point and reject authority that does not respect the will of the people, a Data Spring may erupt if just a few examples of privacy abuse cause the big data spigot to be turned off.    

   

It is time to think of customer analytics as serving the need to improve the lives of customers and the common good of citizens, first and foremost.  We have a saying in healthcare, "nothing about me without me"--which means that patients ought to be in control of decisions about their own lives, including their own information, and the focus of all interactions should be to improve health outcomes.  It's about engaging them in the co-production of something that is worthwhile in their lives.  Clearly, the business will prosper by taking care of the needs of customers first.  Customers will get something of value and may welcome the sharing of much more information to achieve mutual goals.  In fact, there is much more valuable data in their heads than could ever be scraped from their Big Data streams. 

So, the old customer analytics were quite passive, covert, and rather manipulative for customers.  It is the province of the marketing department.  It is all about gathering information on purchasing behavior and integrating it with models about habits and then intervening with the right message at the right time, and probably with a coupon offering, to sell them something.   The new customer analytics is dedicated to customers, engages them, and is reciprocal in terms of sharing of information and creating value.  It is about intimacy and a new relationship with customers.  Mahatma Ghandi talked about customers in a very respectful way, “He is not an outsider to our business; He is part of it.  We are not doing him a favor by serving him; He is doing us a favor by giving us an opportunity to do so.”  From this clear statement of values, transformation can occur to improve the top line for business and the health of populations. 

World Series Analytics

One knows much, much more about the performance of a baseball player, who entertains us, than about our physician, who directs our care that can mean the difference between life and death.  In my book A Framework for Applying Analytics in Healthcare:  What Can Be Learned from the Best Practices in Retail, Banking, Politics, and Sports, I address this paradox and conclude with a counter-intuitive idea. 

On the one hand there is a mesmerizing array of performance data on athletes.  It is used for recruiting athletes, but mostly it is for entertainment.  Because of the abundance of data, choosing a baseball player is so much easier than choosing a physician. When you go to a health plan or medical group Web site to choose a doctor, the information provided is comically bereft of relevant detail. One can learn about the medical school attended, specialty, languages spoken, gender, and office address, but absolutely nothing on the performance of doctors...not even how many times the doctor has been at bat, never mind whether the doctor is a champion in his or her field.

The information on doctor performance is collected but it is not made available to the public.  Same with teachers.  There is a tremendous reluctance to hold teachers and doctors accountable for outcomes for many reasons.

But, healthcare might have it right and can teach sports something to improve its industry. Healthcare, like sports, should be considered a team sport, and measurement and management should be directed accordingly. Putting the metrics on the team’s performance rather than individual actors might lead to better coordination, efficiency, and outcomes in healthcare...and in sports. And sports team management is beginning to realize that as well. Although sports generates a lot of data and it appears to know a lot about data on the surface and in TV commentary, its use of advanced analytics to improve the competitiveness of the teams and to produce value for the business is in its infancy…just like in healthcare.