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"Intel sought to change the game by partnering with the health care systems and health plan in their community — resulting in improved outcomes and decreased costs."
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HBR Must Reads: The Employer-Led Health Care Revolution

By Lindsay Martin | Thursday, November 3, 2016
The Employer-Led Health Care Revolution

IHI is honored that Harvard Business Review included the article, The Employer-Led Health Care Revolution, co-authored by IHI Executive Director Lindsay Martin, in the publication, HBR 10 Must Reads for 2017. The article discusses the fundamentally different role Intel — the computer technology company well-known for its microprocessors — played in the health and health care of their employees in Portland, Oregon, and lays out a structure for other employers to follow suit.

Intel was projecting that health care expenditures for its 48,000 US employees would reach $1 billion by 2012. Concerned with these rising costs, Patricia McDonald, manager of Intel’s highest performing chip factory at the time, proposed a new approach: “Intel could use its purchasing power in markets where it had operations to influence health care players — care providers, health plan administrators or insurers, and other employers — to rise above their competing self-interests and work together to redesign the local health care system.” With guidance from Virginia Mason Medical Center, Intel launched the Healthcare Marketplace Collaborative in 2009 by partnering with their health plan administrator, Cigna, and two Oregon health care systems, Providence Health & Services and Tuality Healthcare.

With health care costs already consuming a significant portion of most budgets, the impact is widespread — affecting individuals, employers, states, and the nation as a whole. Employers and unions, health care providers, and health plans are drawing from the same finite resource pool. By looking at the bigger picture — and by working together — we can begin to make changes that will improve the health of the population served, enhance the individual experience of each patient or beneficiary, and reduce per capita cost.

Employers, health care providers, and health plans can all benefit by considering these four principles:

  1. Don’t look to enhance your market position, change the game.
  2. Engage all sectors in change.
  3. Define a simple, relevant measurement strategy focused on outcomes.
  4. Acknowledge that all change is local, and make it easy for others to want to join.

Don’t Look to Enhance Your Market Position, Change the Game

The negotiation for health care funds relies on leverage, imperfect information, and zero-sum negotiations. While there may be short-term advantages for one of the players in the system, the game will not produce the outcomes we need. Intel sought to change the game by partnering with the health care systems and health plan in their community — resulting in improved outcomes and decreased costs.

Engage All Sectors in Change

Each player in the market has a different skill to bring to the whole. By using these skills in new ways, change can happen faster and perhaps differently than previous efforts. For example, Intel used its deep expertise with process improvement in manufacturing to teach Lean methodology to the health systems where most of their employees were receiving care. In local markets, it is important to build on the good will in the health care system to improve care and seek the best outcomes for the patients they serve. Employers can utilize their often deep knowledge of procurement processes to identify health care suppliers that best meet the needs of their employees, either now or in the future.

Define a Simple, Relevant Measurement Strategy Focused on Outcomes

Working together means that goals are established collectively. Defining simple, yet relevant, measures keeps all entities accountable for achieving a new level of performance, and creates a collective drive to work together toward reaching that new level of performance. Together, goals are tracked and changes are tested and implemented to improve the current state. Simple measures may include:

  • Did health outcomes improve for the population?
  • Was the individual satisfied with the care he/she received?
  • Was there rapid return to function for the individual?
  • Was the care affordable (for the employer and the individual)?

Acknowledge That All Change Is Local, and Make It Easy for Others to Want to Join

Local relationships need to be built, tested, and improved — the basis of this work is trust. Trust is not given, it is earned — working together, through small tests of change. Change in any market, not just in health care, is often difficult because, fundamentally, there is a lack of trust between the players. The status quo is maximizing your piece of the pie; it takes commitment and trust to see these same entities as partners and not adversaries.

By proudly and publicly demonstrating results, others will hopefully want to join in your success. The Healthcare Marketplace Collaborative in Portland experienced this when two additional groups asked to join their efforts in the second year. Making room for new entrants may alter the dynamic you worked hard to build — and while it might be difficult to engage new players in the ongoing work, it is a sign of success that should be welcomed and fostered.

Being a leader cannot not mean pursuing your own interests. There is a real opportunity to raise the integrity of care regionally and then advance that success more broadly. By working across sectors, employers and unions, health care providers, and health plans change the game: the health care that is needed and delivered will be appropriate; employees will be healthier and better able to perform at work and at home; and the market will be more palatable for other employers to enter.

IHI Executive Director and Improvement Advisor, Lindsay A. Martin, MSPH, directs IHI's 90-day Research and Development process.

 

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Harvard Business Review - The Employer-Led Health Care Revolution

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