TRANSACTIONS OF THE AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION, VOL. 127, 2016
DISCOVERING STRATEGY: A KEY CHALLENGE FOR ACADEMIC HEALTH CENTERS THOMAS H. LEE, MD, MSc BOSTON, MASSACHUSETTS
ABSTRACT The health care marketplace is increasingly being driven by competition on value for patients — that is, meeting their needs as efficiently as possible. Academic medical centers must adapt to this shift through the development of true strategies aimed at creating value, as opposed to trying to deflect the pressures of competition through tactics such as merging with competitors. True strategies require clarity on what the organization is trying to do for whom, and how the organization is going to be different from its competitors. Six key questions are described and discussed: 1) What is our goal? 2) What businesses are we in? 3) What set of conditions shall we compete in? 4) How will we be different? 5) What synergies can be created across our sites? and 6) What is our appropriate density and scope? Academic medical centers have been the crown jewel of health care for the United States and, indeed, the rest of the world. Their research, teaching, and patient care missions all command respect, and their halls are filled with representatives of industry interested in scientific advances; trainees seeking expertise; and patients hoping for relief of their suffering — or at least peace of mind that all opportunities for improvement of health have been exhausted.
Despite obvious “demand” for what academic medical centers have to “sell,” the evolving health care marketplace poses existential threats to academic medical centers, causing many such organizations to wonder what their role should be — or if they will even be in existence. The threats are indeed real, and they cannot be overcome by reminding the public of the noble missions of academic medical centers. Instead, academic medical centers need to rediscover the meaning of strategy, which always requires choices that are politically challenging. But organizations that can develop a true strategy and make those difficult choices have an excellent chance of thriving
Correspondence and reprint requests: Thomas H. Lee, MD, Brigham and Women’s Hospital, 75 Francis St., Boston, MA 02115, E-mail: [email protected]. Potential Conflicts of Interest: None disclosed.
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in the new marketplace — because, in fact, academic medical centers have some advantages that their competitors lack in the struggle for market-share.
MARKET DYNAMICS A first important step for health care leaders in general is to understand that the turmoil of recent years is not mere chaos — it is change. The marketplace is moving toward one driven by competition on value — that is, the ability of providers to meet patients’ needs as efficiently as possible. Mergers and consolidations attract the lion’s share of attention in the press, but the ultimate determinant of organizations’ success will be the value of their care. Academic medical centers will increasingly have to provide measurably better outcomes and/or become more efficient. In this context, the very meaning of “performance” for health care organizations is being redefined. In the past, performance has been measured in terms of the only parameters that cut across all activities — revenues and financial margin. There has been skepticism about the phrase “from volume to value,” because no one seemed to know how to measure the numerator part of the value equation (quality). In the absence of measurable quality, all there was to discuss was price — and academic medical centers were at a disadvantage because of their higher cost structure. If those dynamics were left unaltered, the prognosis would be bleak for academic medical centers. When patients were not exposed to the costs of their care, and could go wherever they wanted without concern to the financial impact on them, plenty would seek the peace of mind of going to an academic medical center where physicians were kept at the “top of their game” by the constant peer pressure and need to teach, and where researchers were intermingled with clinicians. With full beds and clinic waiting rooms, academic medical centers were indispensable to health insurance companies, and could negotiate from a position of strength in seeking enough payment to cover losses on uninsured and under-insured patients, as well as some of the costs of activities that were not covered fully or at all. But these dynamics have been altered — probably permanently — by the aging of the population, the development of a global economy, and medical progress. Today, there is so much more that health care can do, and so many patients with multiple medical problems. The resulting care is often chaotic, but always expensive.
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Proud clinicians at academic medical centers cannot believe that patients will not come to them when they are worried and sick — and the fact is that many of those patients still do, and probably always will. But not all of the patients who might benefit from academic medical center care will make it to their doors. The brutal truth is that middle class budgets are stretched as never before, and many consumers are making choices that will make it less likely that they will come to an academic medical center. Employers have shifted some costs directly to patients in the form of high deductible health plans. Now, narrowed network products are being introduced in many regions, and consumers are choosing products based upon what they can actually afford — many of which have networks that exclude or complicate access to academic medical centers. The resulting dynamics are simple: If academic medical centers’ costs are too high, many patients will not be able to access them. It may only be a small percentage of patients who alter their site of care at this point, but it takes just a small loss of market share to destabilize an organization. And the proportion of the public influenced by prices is likely to grow. Even if academic medical centers work hard on their efficiency, and are competitive on cost, patients might still move on if the academic medical centers are not meeting their needs. Whether the reason is costs or quality, academic medical centers are in trouble if patients cannot reach them or do not stay with them. Academic medical centers need to be efficient simply to be in the game. And, to succeed, they have to deliver excellent care that meets patients’ needs.
RESPONDING TO MARKET CHANGES Academic medical centers have an interesting and important choice — they can try to deflect market forces for competition on value, or they can try to respond to those forces by creating value. “Deflecting market forces” includes taking steps like merging with other organizations to try to reduce competition, or integrating with physician groups to enhance indispensability — and thus also reduce competition. The test to see if this dynamic is at work is to ask if care is actually changing, if efficiencies are actually being produced, and if costs to the consumer are going down. If the answer to all three questions is “no,” then it is probable that the organization is playing a short-term game of deflecting competition rather than responding to it. To detect whether the organization is responding to competition, and actually creating value, we need to ask, are outcomes that matter to
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patients actually improving and/or costs going down? Keep in mind that responding to competition means creation of value to the patient. The patient is, after all, the customer. So improvement of process measures is not what matters — it is improving actual outcomes — including the outcome of “peace of mind.” And improving internal efficiencies means little unless the savings are passed along at least in part to the consumer. To create value for patients requires a true break from the past for most academic medical centers. Clinicians must be organized around patients’ needs rather than physicians’ area of expertise — that is, by departments of medicine and surgery, for example, or divisions of cardiology and endocrinology. Providers need teamwork across disciplines to meet patients’ needs. Such changes sound good in theory, but are wrenching in the context of an academic medical center. For that reason, academic medical centers need to understand the nature of strategy, and differentiate it from other functions of management.
WHAT IS STRATEGY? Strategy boils down to answering two important questions: 1) What is the organization trying to do for whom? In other words, what value is the organization trying to create for its customer? Answering this question requires clarity on who the “customer” is; in health care, the usual response is the patient. 2) How is the organization going to be different? If the organization is doing the same thing as everyone else, and in the same way, it will inevitably be competing on price. This dynamic is of course a losing proposition for academic medical centers. Strategy is not achieving some margin target (e.g., 3%). It is not merging. It is not waiting for the reimbursement system to change from feefor-service to something else. Financial margins should be the result of strategy, not the definition of it. Merging is often a tactic for deflection of market forces, not a response to them. And the reimbursement model is likely to be mixed forever — meaning that strategy needs to transcend payment model. The “what” that an academic medical center is doing for “whom” should be a robust way of creating value for which the organization is rewarded regardless of how it is being paid. The fact is that, until recently, most health care organizations could get by without a real strategy that required choices about how they
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were going to create value for customers (patients). They did not need to worry about how to be different or make painful decisions about what not to do. As long as patients came in the doors, contracts could be negotiated in which fee-for-service contracts provided a modest margin for the providers’ total range of activities. In that context, academic medical centers tended to think of strategy as having the scale and market presence to secure good rates and be included in networks. The key to business success was operational effectiveness — improving the way they did what they were already doing. That meant working hard, applying best practices, and enhancing reputations that attracted patients and high quality personnel. Organizations maximized revenue by offering every possible service in as large volumes as possible. Well-reimbursed services cross-subsidized less-profitable ones. Today, good operational performance remains important, of course — but reimbursements are not rising as fast as inflation or costs of delivering care. Commercial insurers are less willing to cross-subsidize other populations. Patients covered by public insurance accounts for a growing proportion of revenue. Many academic medical centers are therefore running at full capacity but have flat or declining revenues. The time has come for academic health centers to rethink the meaning of strategy. Strategy is about making the choices necessary to distinguish an organization in meeting customers’ needs. Those choices revolve around six key questions, which were recently described by Michael Porter and me in a Perspective article in The New England Journal of Medicine (1). This article was written for health care providers in general, but the questions will be reframed in the remainder of this article for academic medical centers in particular. 1) What Is Our Goal? Academic medical centers often respond to this question with a deep breath, and the articulation of multiple missions — teaching, research, and patient care among them. Individually, each of these missions is laudable; collectively, they constitute a complex array in which decisionmaking seems political more than strategic. Today, one goal must become paramount: improving value for patients. This prioritization does not mean teaching and research are not valued — it means that leaders of the academic medical center must first “take care of business,” which means ensure that care is meeting
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patients’ needs and is efficient. And then those leaders must use their creativity to pursue teaching and research missions around that goal. It means that department chairpersons and other leaders need to think of the clinical enterprise as job #1, because without its viability, the other missions are likely to fail. Achieving clarity that value for patients is the goal is important because it has implications that go well beyond celebrating clinicians for their work. Value is defined as the health outcomes achieved for patients relative to the costs of achieving them. It is attractive as a strategic focus because it is the only goal that unites all stakeholders in health care (providers, purchasers, patients, regulators). It is thus the only “true north” that can resolve the difficult choices organizations will need to make. 2) What Businesses Are We In? The usual answer to this question is “We run an academic medical center ... or a tertiary hospital … or a clinic led by physicians.” The problem with these answers is that patients are infinitely heterogeneous at these levels of organization, and it is impossible to measure outcomes that matter to patients or costs across the mix of populations. One can add up costs and some quality metrics, but the data are not convincing drivers of improvement to front-line personnel. To compete in a value-drive marketplace, academic medical centers need to ask “What is the level at which value is really created?” And that level is further down, where groups of patients can be identified with similar shared needs, and where those needs can be better met by well-practiced multidisciplinary teams than what routinely occurs in the rest of the health care system. These groups are usually identified because patients had a medical condition, such as Parkinson’s disease or heart failure. In primary care, value is created for segments of patients with similar needs, such as having chronic diseases or a complex array of conditions. So an academic medical center is really an array of “businesses,” each focused on a group of patients with similar needs. Some of those businesses are well-run; others are not managed at all. The risk of ignoring the “businesses” defined by groups of patients with similar needs is that, if academic medical centers continue business as usual, and focus solely on its traditional organizational units, the choices necessary to deliver value will be overlooked or avoided. Some readers will surely say at this point, “What about the patients who have more than one condition — such as the patient with
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Parkinson’s disease and heart failure?” They should recognize that academic medical centers are particularly vulnerable to paralysis by exception, and that some organization is always better than none. And, just as patients with multiple conditions go from specialist-to-specialist now, they can receive care from more than one team. 3) What Set of Conditions Shall We Compete In? Once an academic medical center has defined its current businesses, it must then ask whether its scope should be narrowed. To try to serve every need of every customer makes academic medical centers vulnerable to rivals that choose to concentrate on specific conditions or complexity levels. Orthopedic ambulatory surgery facilities can siphon off procedures; radiology facilities can provide lower cost MRIs; retail clinics can provide walk-in ambulatory care. Academic medical centers should decide which patient conditions that they are truly going to emphasize, and for which they are going to compete for market share. Some academic medical centers no longer offer uncomplicated, low-risk services, and many community hospitals are giving up complex surgical care to academic medical centers with which they affiliate. Such choices are wrenching — no one likes telling physicians that their work is no longer going to be supported or allowed at the site where they have practiced in the past. Academic medical centers have labored mightily to avoid such difficult choices, but the need to deliver value demands them. 4) How Will We Be Different? The fourth strategic question then becomes: “In every business where we choose to compete, what will be our competitive differentiator?” Academic medical centers need to create a unique value proposition in each business, since they are unlikely to be the low-cost alternative. If they are providing care in the same disorganized fashion as their rivals, they can express erosion of their prices, and worsening efficiency as their capacity goes un-used. Teamwork is the best way to develop a unique value proposition for groups of patients with similar needs. In short, academic medical centers should organize care around value, not around specialties or services. To pursue value, clinicians should be organized into integrated practice units (IPUs) — multidisciplinary teams with the expertise and facilities necessary to achieve good outcomes efficiently and expeditiously throughout the care cycle.
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Some academic medical centers are making major investments to remodel facilities, so that these teams can be co-located. Nothing enhances collaboration and coordination as much as having personnel shoulder-to-shoulder, so they can have formal and informal interactions as they work to improve their care collectively, and take care of individual patients. To be competitive, an IPU must have sufficient patient volume to support teams of appropriate subspecialists, on-demand equipment, and the patient support services necessary to get good results. This means that the academic medical center should channel volume toward these teams, and develop partnerships and affiliations to accomplish that goal. The resulting decisions can be painful — for example, if an academic medical center builds a shoulder surgery IPU around surgeons who concentrate on shoulder surgery, it should discourage orthopedists who only occasionally perform such operations from doing so. As difficult as such decisions are, the organizations that can make them have a competitive advantage, and can likely offer better and more efficient care. Academic medical centers should also embrace bundled-payment contracts and other value-based payment models that reward value improvement. These new payment models along with transparency on outcomes will attract more patients and create a virtuous cycle of improving value. 5) What Synergies Can Be Created Across Our Sites? The fifth strategic question focuses on whether value can be created by concentrating care in fewer locations — and in the most efficient locations. This question harkens back to the imperative that, in a marketplace driven by competition on value, academic medical centers should consider what the levels are at which real value can be created. One is at the level of groups of patients with shared needs who benefit from the teamwork of an IPU. Another is at a higher level, where an organization can use the location at which care is delivered to amplify value. In a sense, this question demonstrates that complex organizations need strategies at two levels — for each business unit and for the overall organization. For example, GE has strategies for each business unit (e.g., GE Aircraft, GE Medical), but also for the overall corporation. Similarly, for delivery systems built around academic medical centers, value condition-level strategies and system-level strategy should go hand in glove.
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Provider systems with multiple hospitals and practice locations sometimes feel overwhelmed with complexity, but they have a potential advantage in their ability to concentrate and distribute care. For example, complex care such as abdominal aortic aneurysm repair should be concentrated at tertiary-care facilities, but routine procedures such as hernias and normal vaginal deliveries should be performed at more cost-effective sites. As already noted, however, realizing these system advantages requires tough choices about which units are not going to deliver which types of care. Eliminating duplication and excess capacity, shutting down inappropriate sites, and shifting care to lower-cost locations all offer tremendous potential of improving quality and efficiency, but require confronting painful political challenges. 6) What Is Our Appropriate Density and Scope? The final strategic question focuses on the academic medical center’s overall delivery system. Does the system have the appropriate concentration and types of services and sites? Would establishing more convenient and more efficient off-site ambulatory care locations enhance value? Does the system’s geographic footprint maximize value? How broad a region is needed to assemble the volume in a particular condition needed to support a high functioning IPU? Are mergers necessary to build the needed volume, or can the system expand through partnerships and affiliations? Such decisions are always complex, but the best way to address them is to always keep in mind that the goal is increasing value, rather than enhancing revenue alone. Again, academic medical center leaders should keep in mind that expanding, merging, and partnering are not strategies, but potential tools for improving value.
CONCLUSION These six questions are challenging for all health care providers, and particularly so for academic medical centers. The responses to them are interdependent, and the choices reinforce each other. The decisions that flow from addressing these questions inevitably disrupt the lives of proud, hard-working professionals. That being said, a strategy based on increasing value for patients is good for patients and the professional satisfaction of those who care for them.
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TABLE 1. Six Essential Strategic Questions for Academic Medical Centers Question
Why It Is Essential
Examples of Choices
1. What is our fundamental goal?
Academic medical centers need clarity on what they are trying to do for whom to make the important choices about how to compete. Value for patients must be the overarching goal. The unit in which patient value is most effectively created is the care for a specific clinical condition over the full care continuum. Academic medical centers must make choices about what they will and will not do, in terms of services offered — no organization can meet all of the needs of every customer. For each condition they treat, academic medical centers need a unique value proposition.
The board of an academic medical center reviews data on patient outcomes and costs for patients with major conditions, rather than just financial margins.
2. What businesses are we in? 3. What scope of businesses should we compete in? 4. How will we be different in each business?
5. What synergies can we create across business units and sites? 6. What should be our geographic density and scope?
Value can be created at the delivery-system level if organizations can truly integrate care through consolidating volume by condition and location, performing services at the most cost-effective location, and coordinating care across sites. Academic medical centers must serve a large enough area to have the volume by condition needed to enable value creation, and the density of sites to allow services at appropriate locations.
Senior management receives regular reports on patient outcomes and costs for each major condition by site and provider, and plans for improvement. An academic medical center decides that it will not perform minor procedures at its main campus.
An academic medical center decides that it will compete for orthopedic patient volume by creating a tightly organized team (integrated practice unit) to deliver coordinated care in a lower-cost setting, and negotiating bundled-payment contracts with major employers and payers. A delivery system decides to concentrate all abdominal aortic aneurysm surgery at its tertiary facility.
An academic medical center decides to pursue affiliations with community hospitals in nearby regions and states to attract more patients with complex conditions while shifting less complex care to more convenient and cost-effective partner sites.
Adapted from Porter and Lee (1).
In this era, academic medical centers need leaders willing to make the choices inherent to real strategy. Future success for academic medical centers is not going to be preserved by political deftness. It will depend on the ability of academic medical centers to create value for patients. Academic medical center leaders must ensure that all activities are aligned around this goal.
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REFERENCE 1. Porter ME, Lee TH. Why strategy matters now. N Engl J Med 2015:342:1681−4.
DISCUSSION Goodenberger, St. Louis: Would it be possible for you to post this somewhere? Maybe as a PDF rather than a PowerPoint so we can’t steal your slides but we can review them? Lee, Boston: Oh you can steal my slides…..its fine with me and the paper will be in the ACCA Transactions. Goodenberger, St. Louis: Yes, this is very nice and concise and I was going too fast to get it all down and I would love to read it again sometime. Lee, Boston: Great, and I will write this up for our ACCA Transactions by deadline. Hook, Birmingham: Thanks very much for your comments. I appreciate them. You mentioned that for our AMCs we need to be focusing on tertiary and quaternary care but it seems to me that tertiary and quaternary care are also readily available outside of AMCs. And what distinguishes AMCs is the other parts of the mission, education, and developing new knowledge. We live in a society where education, it shouldn’t surprise us I think, that education hasn’t been valued. It’s never been valued very well anywhere in our society, celebrated but not valued and paid for. How do we balance these things? Where do we go? Lee, Boston: First, let me emphasize that I think that teaching and research are wonderful. I have spent my whole life in organizations that do these activities. In fact, you could say that AMCs have an almost unfair advantage in the competition for the high-end care. After all, what are we really trying to do for patients? We do what we can to help them live longer and be as healthy as possible, but often there are limits to what can be done. What patients want ultimately is peace of mind that things are as good as they can be given the cards that they have been dealt. If “peace of mind” is the “product,” AMCs have a big advantage. I can say the same thing to a patient at the Brigham as another physician has said 100 miles away, and the patient will believe me and trust me because of the teaching and research that is going on in the halls around me. So I think that AMCs should never walk away or distance themselves from the teaching and research missions. It’s not just an advertising ploy; it is like wearing a white coat — it gives patients peace of mind. I think the peace of mind advantage is really relevant with sick people — that is where AMCs should be competing. But “sick people,” I mean people who need hospitalization, people who have chronic diseases which are symptomatic, e.g., Parkinson’s, and so on. Ludmerer, St. Louis: Thanks for your remarks, Tom; and we will have a lot to talk about outside of the presentation now. But a couple of very quick thoughts. We have a great trump card in medical education to unite traditional professional values with the broader societal problems we face using resources well and so forth and that is the concept of thoughtful medicine. At doctor’s practices they learn, and this has been a great failing but we have an opportunity to do a much better job of it, instilling a problemsolving approach in which diagnostic procedures, therapeutic procedures, and so forth are done because they are needed not because they are there. And immediately you have a much higher quality of medicine because you are lessening iatrogenesis, not to mention a much powerful reduction of cost and hence higher value and this comes back to how medicine is taught and how it is learned so I don’t think that this concept of value is really abstract and unrelated to what we do in the learning and teaching of medicine. And I had another thought but for time purposes I’ll pass by now.
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Landefeld, Birmingham: Tom, thanks for always pushing our thinking. It’s really eloquent and provocative. I want to think about the first question you raise, what is our goal which is so primary with you and I really appreciate your pushing us to be disciplined in thinking about what that is. My question is whether we should be thinking about our academic medical centers, our enterprises, more as conglomerates rather than as a new startup. You know at GE, lighting and locomotives are really different businesses….and education, research, and, you know, patient care are different businesses as well. I am wondering: does it make sense for us to think of our academic medical enterprises as a more of a conglomerate along the GE model as opposed to a single thing focused only on patient care? Lee, Boston: I think that the general principle organizing around the needs of the customer, organizing around the needs of the patients, so you don’t have to put together a team every time — that is a step in the right direction. Organizations are realizing that this is how they are going to need to compete. It is not really a sudden change from the past. This is an evolution that is needed because medicine is so much more complicated now. There are so many more people involved. It’s the right thing to do to get organized in this way, and smart strategically, too. Howell, Ann Arbor: I want to make a historical point that resonates a little bit with the answer to your question. You said at the beginning that this is new. Of course the way historians work is that if you tell us something is old we will tell you it’s new; if you tell us it’s new we will tell you it’s old. I don’t think this is all that new. Let me give you a couple of examples. The Yale medical historian Derrick de Solla Price studied the growth of science and technology starting around the 1700s. Today everybody talks about the logarithmic growth in what we can do and what we know. But de Solla Price showed that this pace of growth is not new; it’s been going on for about three centuries. It is true that we live in a rapidly accelerating, changing medical world, but it’s been that way for a long time and we tend to forget that. To look again at what’s new — you talked about a value proposition. As I am sure you are aware, EA [Ernest Amory] Codman, working in Boston, also wanted a value proposition. To do so he made a big sheet of paper and on it he made a chart about surgeons and their outcomes. Eventually the paper got really big and the writing got really small and the model fell apart. Today we have lean thinking and other organizational schemas that are basically Taylorism and the efficiency movement from the early 20th century. What is different about these new movements? I think it is technology. Anybody got one of these things? [Holds up smart phone.] Of course. We all do. Think back you what you knew 10 or 20 years ago and consider how totally amazing something like this smart phone is. I think a lot of what you are talking about in terms of new organization reflects not so much differences in ideas but differences in the fact that we can now aggregate huge amounts of data and crunch them and come up with numerical answers in ways that were not possible for Codman and simply would not have been possible 50 years ago. The tasks would have required decades of work 30 years ago. They would be possible for only a few people a decade or so ago. Today I could probably do them in half an hour on this iPhone. Lee, Boston: I don’t really feel like a major departure from the past in many ways. But one thing I would say from my friend and colleague at the Brigham, Atul Gawande, that’s qualitatively different, is that we are the first people in history for whom frailty has become a routine issue. And so we must address the frail elderly and you know we are all going to get there. And so, OK, what are we really trying to accomplish here becomes an important question. In a way it wasn’t in the past. Markovitz, Ann Arbor: I wanted to ask you two things, just make a comment and then a question that leads from that. So the comment is admittedly I am biased but
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I tend to think that part of the reason patients come to big university medical centers, or a major reason, is because of the reputation of the place. The place has a reputation, at least, in large part because of the research. That I don’t think gets factored into the academic models. Which brings me to the question: How do you arrive at these recommendations? Do you have mathematical models? Is this pure observation? What is your actual methodology for telling us that these are the ways to go? I am not disagreeing with this but I don’t know how you get to these ideas. Lee, Boston: So in the 1980s when a student was getting PhD in economics and he was doing analysis of exposure A leading to outcome B. And he felt that, OK, they are interesting but they were simplifying things too. Simplifying them to the point that they didn’t tell you what to do…they were too simple. Then he used Harvard Business School case studies and using them you sort of learned every situation is different, and it was interesting and they would teach you judgment but it still didn’t tell you what to do. So what he came up with was the concept of strategic frameworks where a set of robust relationships that might actually tell you what to do, and what you do is you come up with a list of factors and you frankly talk about them, talk about them, talk about them, and you get reactions and you refine them, and you tweak them and that is what we have been doing. So it’s sort of an iterative thing. It’s not like, maybe this stuff is right, maybe it’s not? You know… but this is better than saying nothing. Wolf, Boston: Tom, the leadership of most academic centers got to be leaders because of their research and occasionally because of their teaching. What is your fantasy of how those people are going to change their goals to pursue what you say they should be pursuing to remain viable in the new world. Lee, Boston: Well you know, I think there is a broader definition today of what it means to be best and brightest and I think you Marshall helped create that and broaden that definition in the world in which I grew up and there is an increasing number of terrific young people. What I see them doing, what they are interested in creating is social capital. Like financial capital is money, and human capital is good people, social capital is changes in the way people work together that enables organizations to do things better and more efficiently that it couldn’t otherwise do. So I see a lot of fantastic young people today call me up for whom creation of social capital is how they want to make their contribution to the world, that’s how they want to become famous, and I think they are going to make healthcare a lot better. Wolf, Boston: From your lips to God’s ears.
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DISCOVERING STRATEGY: A KEY CHALLENGE FOR ACADEMIC HEALTH CENTERS THOMAS H. LEE, MD, MSc BOSTON, MASSACHUSETTS
ABSTRACT The health care marketplace is increasingly being driven by competition on value for patients — that is, meeting their needs as efficiently as possible. Academic medical centers must adapt to this shift through the development of true strategies aimed at creating value, as opposed to trying to deflect the pressures of competition through tactics such as merging with competitors. True strategies require clarity on what the organization is trying to do for whom, and how the organization is going to be different from its competitors. Six key questions are described and discussed: 1) What is our goal? 2) What businesses are we in? 3) What set of conditions shall we compete in? 4) How will we be different? 5) What synergies can be created across our sites? and 6) What is our appropriate density and scope? Academic medical centers have been the crown jewel of health care for the United States and, indeed, the rest of the world. Their research, teaching, and patient care missions all command respect, and their halls are filled with representatives of industry interested in scientific advances; trainees seeking expertise; and patients hoping for relief of their suffering — or at least peace of mind that all opportunities for improvement of health have been exhausted.
Despite obvious “demand” for what academic medical centers have to “sell,” the evolving health care marketplace poses existential threats to academic medical centers, causing many such organizations to wonder what their role should be — or if they will even be in existence. The threats are indeed real, and they cannot be overcome by reminding the public of the noble missions of academic medical centers. Instead, academic medical centers need to rediscover the meaning of strategy, which always requires choices that are politically challenging. But organizations that can develop a true strategy and make those difficult choices have an excellent chance of thriving
Correspondence and reprint requests: Thomas H. Lee, MD, Brigham and Women’s Hospital, 75 Francis St., Boston, MA 02115, E-mail: [email protected]. Potential Conflicts of Interest: None disclosed.
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in the new marketplace — because, in fact, academic medical centers have some advantages that their competitors lack in the struggle for market-share.
MARKET DYNAMICS A first important step for health care leaders in general is to understand that the turmoil of recent years is not mere chaos — it is change. The marketplace is moving toward one driven by competition on value — that is, the ability of providers to meet patients’ needs as efficiently as possible. Mergers and consolidations attract the lion’s share of attention in the press, but the ultimate determinant of organizations’ success will be the value of their care. Academic medical centers will increasingly have to provide measurably better outcomes and/or become more efficient. In this context, the very meaning of “performance” for health care organizations is being redefined. In the past, performance has been measured in terms of the only parameters that cut across all activities — revenues and financial margin. There has been skepticism about the phrase “from volume to value,” because no one seemed to know how to measure the numerator part of the value equation (quality). In the absence of measurable quality, all there was to discuss was price — and academic medical centers were at a disadvantage because of their higher cost structure. If those dynamics were left unaltered, the prognosis would be bleak for academic medical centers. When patients were not exposed to the costs of their care, and could go wherever they wanted without concern to the financial impact on them, plenty would seek the peace of mind of going to an academic medical center where physicians were kept at the “top of their game” by the constant peer pressure and need to teach, and where researchers were intermingled with clinicians. With full beds and clinic waiting rooms, academic medical centers were indispensable to health insurance companies, and could negotiate from a position of strength in seeking enough payment to cover losses on uninsured and under-insured patients, as well as some of the costs of activities that were not covered fully or at all. But these dynamics have been altered — probably permanently — by the aging of the population, the development of a global economy, and medical progress. Today, there is so much more that health care can do, and so many patients with multiple medical problems. The resulting care is often chaotic, but always expensive.
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Proud clinicians at academic medical centers cannot believe that patients will not come to them when they are worried and sick — and the fact is that many of those patients still do, and probably always will. But not all of the patients who might benefit from academic medical center care will make it to their doors. The brutal truth is that middle class budgets are stretched as never before, and many consumers are making choices that will make it less likely that they will come to an academic medical center. Employers have shifted some costs directly to patients in the form of high deductible health plans. Now, narrowed network products are being introduced in many regions, and consumers are choosing products based upon what they can actually afford — many of which have networks that exclude or complicate access to academic medical centers. The resulting dynamics are simple: If academic medical centers’ costs are too high, many patients will not be able to access them. It may only be a small percentage of patients who alter their site of care at this point, but it takes just a small loss of market share to destabilize an organization. And the proportion of the public influenced by prices is likely to grow. Even if academic medical centers work hard on their efficiency, and are competitive on cost, patients might still move on if the academic medical centers are not meeting their needs. Whether the reason is costs or quality, academic medical centers are in trouble if patients cannot reach them or do not stay with them. Academic medical centers need to be efficient simply to be in the game. And, to succeed, they have to deliver excellent care that meets patients’ needs.
RESPONDING TO MARKET CHANGES Academic medical centers have an interesting and important choice — they can try to deflect market forces for competition on value, or they can try to respond to those forces by creating value. “Deflecting market forces” includes taking steps like merging with other organizations to try to reduce competition, or integrating with physician groups to enhance indispensability — and thus also reduce competition. The test to see if this dynamic is at work is to ask if care is actually changing, if efficiencies are actually being produced, and if costs to the consumer are going down. If the answer to all three questions is “no,” then it is probable that the organization is playing a short-term game of deflecting competition rather than responding to it. To detect whether the organization is responding to competition, and actually creating value, we need to ask, are outcomes that matter to
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patients actually improving and/or costs going down? Keep in mind that responding to competition means creation of value to the patient. The patient is, after all, the customer. So improvement of process measures is not what matters — it is improving actual outcomes — including the outcome of “peace of mind.” And improving internal efficiencies means little unless the savings are passed along at least in part to the consumer. To create value for patients requires a true break from the past for most academic medical centers. Clinicians must be organized around patients’ needs rather than physicians’ area of expertise — that is, by departments of medicine and surgery, for example, or divisions of cardiology and endocrinology. Providers need teamwork across disciplines to meet patients’ needs. Such changes sound good in theory, but are wrenching in the context of an academic medical center. For that reason, academic medical centers need to understand the nature of strategy, and differentiate it from other functions of management.
WHAT IS STRATEGY? Strategy boils down to answering two important questions: 1) What is the organization trying to do for whom? In other words, what value is the organization trying to create for its customer? Answering this question requires clarity on who the “customer” is; in health care, the usual response is the patient. 2) How is the organization going to be different? If the organization is doing the same thing as everyone else, and in the same way, it will inevitably be competing on price. This dynamic is of course a losing proposition for academic medical centers. Strategy is not achieving some margin target (e.g., 3%). It is not merging. It is not waiting for the reimbursement system to change from feefor-service to something else. Financial margins should be the result of strategy, not the definition of it. Merging is often a tactic for deflection of market forces, not a response to them. And the reimbursement model is likely to be mixed forever — meaning that strategy needs to transcend payment model. The “what” that an academic medical center is doing for “whom” should be a robust way of creating value for which the organization is rewarded regardless of how it is being paid. The fact is that, until recently, most health care organizations could get by without a real strategy that required choices about how they
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were going to create value for customers (patients). They did not need to worry about how to be different or make painful decisions about what not to do. As long as patients came in the doors, contracts could be negotiated in which fee-for-service contracts provided a modest margin for the providers’ total range of activities. In that context, academic medical centers tended to think of strategy as having the scale and market presence to secure good rates and be included in networks. The key to business success was operational effectiveness — improving the way they did what they were already doing. That meant working hard, applying best practices, and enhancing reputations that attracted patients and high quality personnel. Organizations maximized revenue by offering every possible service in as large volumes as possible. Well-reimbursed services cross-subsidized less-profitable ones. Today, good operational performance remains important, of course — but reimbursements are not rising as fast as inflation or costs of delivering care. Commercial insurers are less willing to cross-subsidize other populations. Patients covered by public insurance accounts for a growing proportion of revenue. Many academic medical centers are therefore running at full capacity but have flat or declining revenues. The time has come for academic health centers to rethink the meaning of strategy. Strategy is about making the choices necessary to distinguish an organization in meeting customers’ needs. Those choices revolve around six key questions, which were recently described by Michael Porter and me in a Perspective article in The New England Journal of Medicine (1). This article was written for health care providers in general, but the questions will be reframed in the remainder of this article for academic medical centers in particular. 1) What Is Our Goal? Academic medical centers often respond to this question with a deep breath, and the articulation of multiple missions — teaching, research, and patient care among them. Individually, each of these missions is laudable; collectively, they constitute a complex array in which decisionmaking seems political more than strategic. Today, one goal must become paramount: improving value for patients. This prioritization does not mean teaching and research are not valued — it means that leaders of the academic medical center must first “take care of business,” which means ensure that care is meeting
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patients’ needs and is efficient. And then those leaders must use their creativity to pursue teaching and research missions around that goal. It means that department chairpersons and other leaders need to think of the clinical enterprise as job #1, because without its viability, the other missions are likely to fail. Achieving clarity that value for patients is the goal is important because it has implications that go well beyond celebrating clinicians for their work. Value is defined as the health outcomes achieved for patients relative to the costs of achieving them. It is attractive as a strategic focus because it is the only goal that unites all stakeholders in health care (providers, purchasers, patients, regulators). It is thus the only “true north” that can resolve the difficult choices organizations will need to make. 2) What Businesses Are We In? The usual answer to this question is “We run an academic medical center ... or a tertiary hospital … or a clinic led by physicians.” The problem with these answers is that patients are infinitely heterogeneous at these levels of organization, and it is impossible to measure outcomes that matter to patients or costs across the mix of populations. One can add up costs and some quality metrics, but the data are not convincing drivers of improvement to front-line personnel. To compete in a value-drive marketplace, academic medical centers need to ask “What is the level at which value is really created?” And that level is further down, where groups of patients can be identified with similar shared needs, and where those needs can be better met by well-practiced multidisciplinary teams than what routinely occurs in the rest of the health care system. These groups are usually identified because patients had a medical condition, such as Parkinson’s disease or heart failure. In primary care, value is created for segments of patients with similar needs, such as having chronic diseases or a complex array of conditions. So an academic medical center is really an array of “businesses,” each focused on a group of patients with similar needs. Some of those businesses are well-run; others are not managed at all. The risk of ignoring the “businesses” defined by groups of patients with similar needs is that, if academic medical centers continue business as usual, and focus solely on its traditional organizational units, the choices necessary to deliver value will be overlooked or avoided. Some readers will surely say at this point, “What about the patients who have more than one condition — such as the patient with
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Parkinson’s disease and heart failure?” They should recognize that academic medical centers are particularly vulnerable to paralysis by exception, and that some organization is always better than none. And, just as patients with multiple conditions go from specialist-to-specialist now, they can receive care from more than one team. 3) What Set of Conditions Shall We Compete In? Once an academic medical center has defined its current businesses, it must then ask whether its scope should be narrowed. To try to serve every need of every customer makes academic medical centers vulnerable to rivals that choose to concentrate on specific conditions or complexity levels. Orthopedic ambulatory surgery facilities can siphon off procedures; radiology facilities can provide lower cost MRIs; retail clinics can provide walk-in ambulatory care. Academic medical centers should decide which patient conditions that they are truly going to emphasize, and for which they are going to compete for market share. Some academic medical centers no longer offer uncomplicated, low-risk services, and many community hospitals are giving up complex surgical care to academic medical centers with which they affiliate. Such choices are wrenching — no one likes telling physicians that their work is no longer going to be supported or allowed at the site where they have practiced in the past. Academic medical centers have labored mightily to avoid such difficult choices, but the need to deliver value demands them. 4) How Will We Be Different? The fourth strategic question then becomes: “In every business where we choose to compete, what will be our competitive differentiator?” Academic medical centers need to create a unique value proposition in each business, since they are unlikely to be the low-cost alternative. If they are providing care in the same disorganized fashion as their rivals, they can express erosion of their prices, and worsening efficiency as their capacity goes un-used. Teamwork is the best way to develop a unique value proposition for groups of patients with similar needs. In short, academic medical centers should organize care around value, not around specialties or services. To pursue value, clinicians should be organized into integrated practice units (IPUs) — multidisciplinary teams with the expertise and facilities necessary to achieve good outcomes efficiently and expeditiously throughout the care cycle.
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Some academic medical centers are making major investments to remodel facilities, so that these teams can be co-located. Nothing enhances collaboration and coordination as much as having personnel shoulder-to-shoulder, so they can have formal and informal interactions as they work to improve their care collectively, and take care of individual patients. To be competitive, an IPU must have sufficient patient volume to support teams of appropriate subspecialists, on-demand equipment, and the patient support services necessary to get good results. This means that the academic medical center should channel volume toward these teams, and develop partnerships and affiliations to accomplish that goal. The resulting decisions can be painful — for example, if an academic medical center builds a shoulder surgery IPU around surgeons who concentrate on shoulder surgery, it should discourage orthopedists who only occasionally perform such operations from doing so. As difficult as such decisions are, the organizations that can make them have a competitive advantage, and can likely offer better and more efficient care. Academic medical centers should also embrace bundled-payment contracts and other value-based payment models that reward value improvement. These new payment models along with transparency on outcomes will attract more patients and create a virtuous cycle of improving value. 5) What Synergies Can Be Created Across Our Sites? The fifth strategic question focuses on whether value can be created by concentrating care in fewer locations — and in the most efficient locations. This question harkens back to the imperative that, in a marketplace driven by competition on value, academic medical centers should consider what the levels are at which real value can be created. One is at the level of groups of patients with shared needs who benefit from the teamwork of an IPU. Another is at a higher level, where an organization can use the location at which care is delivered to amplify value. In a sense, this question demonstrates that complex organizations need strategies at two levels — for each business unit and for the overall organization. For example, GE has strategies for each business unit (e.g., GE Aircraft, GE Medical), but also for the overall corporation. Similarly, for delivery systems built around academic medical centers, value condition-level strategies and system-level strategy should go hand in glove.
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Provider systems with multiple hospitals and practice locations sometimes feel overwhelmed with complexity, but they have a potential advantage in their ability to concentrate and distribute care. For example, complex care such as abdominal aortic aneurysm repair should be concentrated at tertiary-care facilities, but routine procedures such as hernias and normal vaginal deliveries should be performed at more cost-effective sites. As already noted, however, realizing these system advantages requires tough choices about which units are not going to deliver which types of care. Eliminating duplication and excess capacity, shutting down inappropriate sites, and shifting care to lower-cost locations all offer tremendous potential of improving quality and efficiency, but require confronting painful political challenges. 6) What Is Our Appropriate Density and Scope? The final strategic question focuses on the academic medical center’s overall delivery system. Does the system have the appropriate concentration and types of services and sites? Would establishing more convenient and more efficient off-site ambulatory care locations enhance value? Does the system’s geographic footprint maximize value? How broad a region is needed to assemble the volume in a particular condition needed to support a high functioning IPU? Are mergers necessary to build the needed volume, or can the system expand through partnerships and affiliations? Such decisions are always complex, but the best way to address them is to always keep in mind that the goal is increasing value, rather than enhancing revenue alone. Again, academic medical center leaders should keep in mind that expanding, merging, and partnering are not strategies, but potential tools for improving value.
CONCLUSION These six questions are challenging for all health care providers, and particularly so for academic medical centers. The responses to them are interdependent, and the choices reinforce each other. The decisions that flow from addressing these questions inevitably disrupt the lives of proud, hard-working professionals. That being said, a strategy based on increasing value for patients is good for patients and the professional satisfaction of those who care for them.
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TABLE 1. Six Essential Strategic Questions for Academic Medical Centers Question
Why It Is Essential
Examples of Choices
1. What is our fundamental goal?
Academic medical centers need clarity on what they are trying to do for whom to make the important choices about how to compete. Value for patients must be the overarching goal. The unit in which patient value is most effectively created is the care for a specific clinical condition over the full care continuum. Academic medical centers must make choices about what they will and will not do, in terms of services offered — no organization can meet all of the needs of every customer. For each condition they treat, academic medical centers need a unique value proposition.
The board of an academic medical center reviews data on patient outcomes and costs for patients with major conditions, rather than just financial margins.
2. What businesses are we in? 3. What scope of businesses should we compete in? 4. How will we be different in each business?
5. What synergies can we create across business units and sites? 6. What should be our geographic density and scope?
Value can be created at the delivery-system level if organizations can truly integrate care through consolidating volume by condition and location, performing services at the most cost-effective location, and coordinating care across sites. Academic medical centers must serve a large enough area to have the volume by condition needed to enable value creation, and the density of sites to allow services at appropriate locations.
Senior management receives regular reports on patient outcomes and costs for each major condition by site and provider, and plans for improvement. An academic medical center decides that it will not perform minor procedures at its main campus.
An academic medical center decides that it will compete for orthopedic patient volume by creating a tightly organized team (integrated practice unit) to deliver coordinated care in a lower-cost setting, and negotiating bundled-payment contracts with major employers and payers. A delivery system decides to concentrate all abdominal aortic aneurysm surgery at its tertiary facility.
An academic medical center decides to pursue affiliations with community hospitals in nearby regions and states to attract more patients with complex conditions while shifting less complex care to more convenient and cost-effective partner sites.
Adapted from Porter and Lee (1).
In this era, academic medical centers need leaders willing to make the choices inherent to real strategy. Future success for academic medical centers is not going to be preserved by political deftness. It will depend on the ability of academic medical centers to create value for patients. Academic medical center leaders must ensure that all activities are aligned around this goal.
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REFERENCE 1. Porter ME, Lee TH. Why strategy matters now. N Engl J Med 2015:342:1681−4.
DISCUSSION Goodenberger, St. Louis: Would it be possible for you to post this somewhere? Maybe as a PDF rather than a PowerPoint so we can’t steal your slides but we can review them? Lee, Boston: Oh you can steal my slides…..its fine with me and the paper will be in the ACCA Transactions. Goodenberger, St. Louis: Yes, this is very nice and concise and I was going too fast to get it all down and I would love to read it again sometime. Lee, Boston: Great, and I will write this up for our ACCA Transactions by deadline. Hook, Birmingham: Thanks very much for your comments. I appreciate them. You mentioned that for our AMCs we need to be focusing on tertiary and quaternary care but it seems to me that tertiary and quaternary care are also readily available outside of AMCs. And what distinguishes AMCs is the other parts of the mission, education, and developing new knowledge. We live in a society where education, it shouldn’t surprise us I think, that education hasn’t been valued. It’s never been valued very well anywhere in our society, celebrated but not valued and paid for. How do we balance these things? Where do we go? Lee, Boston: First, let me emphasize that I think that teaching and research are wonderful. I have spent my whole life in organizations that do these activities. In fact, you could say that AMCs have an almost unfair advantage in the competition for the high-end care. After all, what are we really trying to do for patients? We do what we can to help them live longer and be as healthy as possible, but often there are limits to what can be done. What patients want ultimately is peace of mind that things are as good as they can be given the cards that they have been dealt. If “peace of mind” is the “product,” AMCs have a big advantage. I can say the same thing to a patient at the Brigham as another physician has said 100 miles away, and the patient will believe me and trust me because of the teaching and research that is going on in the halls around me. So I think that AMCs should never walk away or distance themselves from the teaching and research missions. It’s not just an advertising ploy; it is like wearing a white coat — it gives patients peace of mind. I think the peace of mind advantage is really relevant with sick people — that is where AMCs should be competing. But “sick people,” I mean people who need hospitalization, people who have chronic diseases which are symptomatic, e.g., Parkinson’s, and so on. Ludmerer, St. Louis: Thanks for your remarks, Tom; and we will have a lot to talk about outside of the presentation now. But a couple of very quick thoughts. We have a great trump card in medical education to unite traditional professional values with the broader societal problems we face using resources well and so forth and that is the concept of thoughtful medicine. At doctor’s practices they learn, and this has been a great failing but we have an opportunity to do a much better job of it, instilling a problemsolving approach in which diagnostic procedures, therapeutic procedures, and so forth are done because they are needed not because they are there. And immediately you have a much higher quality of medicine because you are lessening iatrogenesis, not to mention a much powerful reduction of cost and hence higher value and this comes back to how medicine is taught and how it is learned so I don’t think that this concept of value is really abstract and unrelated to what we do in the learning and teaching of medicine. And I had another thought but for time purposes I’ll pass by now.
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Landefeld, Birmingham: Tom, thanks for always pushing our thinking. It’s really eloquent and provocative. I want to think about the first question you raise, what is our goal which is so primary with you and I really appreciate your pushing us to be disciplined in thinking about what that is. My question is whether we should be thinking about our academic medical centers, our enterprises, more as conglomerates rather than as a new startup. You know at GE, lighting and locomotives are really different businesses….and education, research, and, you know, patient care are different businesses as well. I am wondering: does it make sense for us to think of our academic medical enterprises as a more of a conglomerate along the GE model as opposed to a single thing focused only on patient care? Lee, Boston: I think that the general principle organizing around the needs of the customer, organizing around the needs of the patients, so you don’t have to put together a team every time — that is a step in the right direction. Organizations are realizing that this is how they are going to need to compete. It is not really a sudden change from the past. This is an evolution that is needed because medicine is so much more complicated now. There are so many more people involved. It’s the right thing to do to get organized in this way, and smart strategically, too. Howell, Ann Arbor: I want to make a historical point that resonates a little bit with the answer to your question. You said at the beginning that this is new. Of course the way historians work is that if you tell us something is old we will tell you it’s new; if you tell us it’s new we will tell you it’s old. I don’t think this is all that new. Let me give you a couple of examples. The Yale medical historian Derrick de Solla Price studied the growth of science and technology starting around the 1700s. Today everybody talks about the logarithmic growth in what we can do and what we know. But de Solla Price showed that this pace of growth is not new; it’s been going on for about three centuries. It is true that we live in a rapidly accelerating, changing medical world, but it’s been that way for a long time and we tend to forget that. To look again at what’s new — you talked about a value proposition. As I am sure you are aware, EA [Ernest Amory] Codman, working in Boston, also wanted a value proposition. To do so he made a big sheet of paper and on it he made a chart about surgeons and their outcomes. Eventually the paper got really big and the writing got really small and the model fell apart. Today we have lean thinking and other organizational schemas that are basically Taylorism and the efficiency movement from the early 20th century. What is different about these new movements? I think it is technology. Anybody got one of these things? [Holds up smart phone.] Of course. We all do. Think back you what you knew 10 or 20 years ago and consider how totally amazing something like this smart phone is. I think a lot of what you are talking about in terms of new organization reflects not so much differences in ideas but differences in the fact that we can now aggregate huge amounts of data and crunch them and come up with numerical answers in ways that were not possible for Codman and simply would not have been possible 50 years ago. The tasks would have required decades of work 30 years ago. They would be possible for only a few people a decade or so ago. Today I could probably do them in half an hour on this iPhone. Lee, Boston: I don’t really feel like a major departure from the past in many ways. But one thing I would say from my friend and colleague at the Brigham, Atul Gawande, that’s qualitatively different, is that we are the first people in history for whom frailty has become a routine issue. And so we must address the frail elderly and you know we are all going to get there. And so, OK, what are we really trying to accomplish here becomes an important question. In a way it wasn’t in the past. Markovitz, Ann Arbor: I wanted to ask you two things, just make a comment and then a question that leads from that. So the comment is admittedly I am biased but
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I tend to think that part of the reason patients come to big university medical centers, or a major reason, is because of the reputation of the place. The place has a reputation, at least, in large part because of the research. That I don’t think gets factored into the academic models. Which brings me to the question: How do you arrive at these recommendations? Do you have mathematical models? Is this pure observation? What is your actual methodology for telling us that these are the ways to go? I am not disagreeing with this but I don’t know how you get to these ideas. Lee, Boston: So in the 1980s when a student was getting PhD in economics and he was doing analysis of exposure A leading to outcome B. And he felt that, OK, they are interesting but they were simplifying things too. Simplifying them to the point that they didn’t tell you what to do…they were too simple. Then he used Harvard Business School case studies and using them you sort of learned every situation is different, and it was interesting and they would teach you judgment but it still didn’t tell you what to do. So what he came up with was the concept of strategic frameworks where a set of robust relationships that might actually tell you what to do, and what you do is you come up with a list of factors and you frankly talk about them, talk about them, talk about them, and you get reactions and you refine them, and you tweak them and that is what we have been doing. So it’s sort of an iterative thing. It’s not like, maybe this stuff is right, maybe it’s not? You know… but this is better than saying nothing. Wolf, Boston: Tom, the leadership of most academic centers got to be leaders because of their research and occasionally because of their teaching. What is your fantasy of how those people are going to change their goals to pursue what you say they should be pursuing to remain viable in the new world. Lee, Boston: Well you know, I think there is a broader definition today of what it means to be best and brightest and I think you Marshall helped create that and broaden that definition in the world in which I grew up and there is an increasing number of terrific young people. What I see them doing, what they are interested in creating is social capital. Like financial capital is money, and human capital is good people, social capital is changes in the way people work together that enables organizations to do things better and more efficiently that it couldn’t otherwise do. So I see a lot of fantastic young people today call me up for whom creation of social capital is how they want to make their contribution to the world, that’s how they want to become famous, and I think they are going to make healthcare a lot better. Wolf, Boston: From your lips to God’s ears.
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