Blog | Monday, August 25, 2014

The next wave


I was traveling and, as I typically do, I bought a copy of Fast Company magazine to read on the plane. I don’t subscribe, but I find that it often has interesting articles on the intersection of technology and business. In the July/August issue, there was an article about GE and its CEO Jeff Immelt that I think has important parallels with the current transformation of health care delivery.

I have always admired GE as a well-run company that gave birth to a lot of the current teaching about effective management and organizational improvement. That sentiment comes in part from a course I took years ago in six-sigma quality management that closely followed the GE methodology. I have also heard Jeff Immelt speak, and was impressed with what I heard and later read about him.

The article was about how GE is pursuing a long-term strategy to create the “industrial internet.” The idea is to imbue the large expensive things that GE builds—think locomotives, jet engines, power plants—with “intelligence” that allows them to monitor their own status and couple that with “big data” analytics to predict (and avoid) mechanical failures. The article posits that even small improvements in performance or reliability could have huge economic benefits for industries such as freight railroads and airlines.

Here is the part that made me think about health care. A GE executive was describing the company’s evolution and described 3 “waves” of how they interacted with their customers. In “wave 1” (1960s and 1970s) GE sold heavy equipment with the promise of “if it breaks, we will fix it.” Wave 2 (1980s and 1990s) brought a closer relationship with customers through long term service agreements that assured a certain level of performance and included scheduled maintenance. The current wave was described this way:

“An approaching third wave, enabled by data and analytics, does something new. It strikes an agreement between GE and a customer for a certain kind of outcome, rather than a certain kind of functionality. It’s not only about measuring whether a jet engine is working up to its specifications, or about repairing it on time, but whether it is delivering, say, the agreed-upon amount of peak operational time.”

I believe we are in the midst of an analogous evolution of health care delivery. We can no longer think about health care as just providing a service (for a fee) to “fix” something that “breaks.” Health care should be—and soon will be—about achieving measurable improved health outcomes for the patients and population that we serve. Transforming our organizations to realize that goal is a heavy lift, and I think we can learn a lot from companies like GE about how to pull it off.

What do you think?

Ira S. Nash, MD, FACP, is the senior vice president and executive director of the North Shore-LIJ Medical Group, and a professor of Cardiology and Population Health at Hofstra North Shore-LIJ School of Medicine. He is Board Certified in Internal Medicine and Cardiovascular Diseases and was in the private practice of cardiology before joining the full-time faculty of Massachusetts General Hospital. He then held a number of senior positions at Mount Sinai Medical Center prior to joining North Shore-LIJ. He is married with two daughters and enjoys cars, reading biographies and histories, and following his favorite baseball team, the New York Yankees, when not practicing medicine. This post originally appeared at his blog, Ausculation.