HCI3 Update from the Field: Culture Eat’s Strategy for Breakfast

Submitted by francois.debrantes@hci3.org on Friday, July 19, 2013 - 11:55

Newtown, CT – July 19, 2013

This week’s announcement by ACO Pioneers reminds us that culture does eat strategy for breakfast – Take for example the reaction of Atrius Health to the news that they were going to pay a penalty for not meeting their first year’s cost targets.  They didn’t complain that no good deed goes unpunished, that the hard work they had done in years past to lower their overall cost of care was now hurting them in their ability to reduce costs further. No, they acknowledged that the investments needed today to further improve the way they care for patients would only pay off tomorrow.  Contrast that with some of the organizations that backed out of the Pioneer program. They claim they continue to be excited about accountability (seriously?) and are simply taking a more conservative route to it. The spinmeisters are either declaring the demise of payment and care innovation, or they’re touting that massive savings have already been booked for the Medicare program (not sure that 0.5% qualifies as massive). The reality, of course, is more nuanced. Have some ACOs saved money? Certainly. Are others struggling with the very concept of managing populations of patients and the corresponding insurance risk? Of course. But that’s exactly what we should expect.

What this means to you – When blind dogma guides decisions, you always end up with disappointment. Those who thought, and prophesized, that ACOs would soon rule the health care world chose to ignore that you don’t change an organization’s culture in a year.  In fact it can take far more than a decade (but doesn’t have to). And the prevailing culture in almost all provider organizations is to produce RVUs. By the way, it doesn’t really change anything that the physician is a salaried employee if the culture of the organization is all about pumping out volume.  Just look at Elizabeth Bradley’s recent research on reduction of CHF readmissions. Most of the hospitals surveyed have salaried physicians. And yet only a handful has deployed the full panoply of interventions that are proven effective at lowering CHF readmissions. For them, like for all steeped in fee-for-service, more production is better. The fact that anyone would be delusional enough to think that a culture built around high-volume production of health care services could be flipped on its head shows the depth of the disconnect between aspiration and reality. So how do we change the culture in so many provider organizations? Partially by teaching the leadership a different way of thinking. If CEOs, CFOs, and COOs of hospitals spent three months in the manufacturing plant of a Fortune 500 company, they would learn what it means to focus on value, find efficiencies, root out waste, and maniacally work on bottom line margin instead of simply raising prices to boost the top line. Perhaps WalMart, GE, Kroger, Ford, GM and so many others could step in, open their doors, and do more to change the culture of healthcare than everyone betting on a delusional strategy.


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org