Big Biz Reforming Healthcare Where it Hurts

As Washington fights an uphill battle, corporate players McKesson and GE deliver the health care reform the Nation desperately needs.


Most Americans eagerly await healthcare reform. According to a poll of the general public conducted earlier this year by CBS and The New York Times, 90 percent of people believe the U.S. healthcare system needs to undergo fundamental change or be rebuilt completely. Unfortunately such restoration might come at a high cost to taxpayers – $1 trillion over a decade, according to the new bill.


In an appearance at the Children’s National Medical Center this week, President Obama urged support and quelled concern over the huge expense of covering millions of uninsured Americans. “There are some in this town that are content to perpetuate the status quo,” said the President. “There are others who recognize the problem but believe, or perhaps hope, that we can put off the hard work of healthcare reform for another day, another year, another decade.” 


In response, The Republican National Committee launched a counter attack consisting of a new TV ad andwebsite that accuses the President of “rushing through a grand experiment that will have serious consequences for future generations of Americans.” Republican Senator Jim DeMintthey pledged: “If we’re able to stop Obama on this, it will be his Waterloo.”


Political grandstanding aside, there are underlying systemic problems that affect every patient, and that neither the government’s bill nor individual party leaders can possibly fix singlehandedly. Take quality, for instance. 


Although the U.S. spends a bigger chunk of its wealth on healthcare than any other Nation, we have far less to show for it. Most people aren’t getting the kind of care they need. Studies from research and policy think tanks including Rand Corporation and the Commonwealth Fund indicate that healthcare is broken at the patient level. It’s not just that we lag behind many Nations in terms of infant mortality and life expectancy, it’s that our healthcare bureaucracy inadvertently puts people last.


Most patients leave physician’s offices without a clear sense of what they have just been told or what they must do in order to manage their condition. Emergency rooms and doctor’s offices are overcrowded and patient-physician relationships, if they exist at all, tend to be cold and abrupt. Twenty-three seconds is the average time that a patient gets to talk before being interrupted or cut off by a physician, while less than 15 percent of patients are able to ask all the questions they have. 


“If you’re sick and you need care, it doesn’t matter how far healthcare has come in its evolutionary history,” says says McKesson CEO John Hammergren in his 2008 book Skin in the Game. “You just worry about the last two feet – the distance between you and your doctor as you sit and discuss your condition and how best to treat it.”


Another problem eclipsing many attempts to drive change and improvement is fragmentation. For instance, each of the major stakeholders in healthcare – physicians, pharmacies, providers, payors and manufacturers – operate essentially as a cottage industry of independent players, unconnected by workflows, business processes and information systems. This creates a huge level of inefficiency, and potentially dangerous and costly consequences for patients and insurance companies. The needless or erroneous paperwork, tests, treatments, medicine, side effects, fears and misinformation adds up to millions spent – and eventually lost.


“What’s becoming better understood is that our healthcare crisis is fundamentally a business problem,” writes Hammergren. “The system is overstrained and is breaking down due to outdated information technology; poor application of the basic principles of market economics; overall inefficiency in terms of work flow, care delivery, and the spreading of best practices; a lack of transparency around quality and cost; and blocked access to making informed consumer choices.”


For those interested in the sobering statistics and staggering inefficiencies of healthcare, Hammergren’s book is a must-read. But for those not as inclined to pick up the book, here are a few key facts worth remembering the next time you visit the doctor’s office:


  •  Owing to the fragmented and non-standardized nature of healthcare, 500,000 people die every year
  •  Medical errors cause 100,000 deaths and one million injuries every year
  •  Whether you enter an emergency room, a physician’s office or a scheduled surgery, you have a 55 percent chance of receiving the best quality care
  •  There are 1.5 trillion health claims written each year, 30 percent of which are erroneous, and 15 percent of which are lost
  •  There are 140 million illegible prescriptions written each year
  •  Thirty percent of our healthcare dollars are spent on treatments that do not improve our health or that are completely redundant


Talk about your serious social problems. As the Nation’s oldest and largest healthcare company, McKesson has been effectively – and profitably – taking on these challenges for over 175 years. 


“McKesson’s goal is to help empower a better healthcare system—one in which healthcare is higher quality, more efficient, more personalized, and ultimately, more human,” says McKesson VP of Corporate Communications, Andy Burtis. “We have an unmatched breadth of products and services and deep, long-standing customer relationships with thousands of hospitals, physician offices, retail pharmacies, and payors. We are the only company that touches every aspect of healthcare – enabling us to see the issues first-hand and provide the necessary solutions.”



Systemic Care

McKesson’s business model hedges on a concept it characterizes as a forthcoming “bold new era of healthcare.” The company paints an interesting portrait: In the near future, healthcare companies will begin competing for business not on the basis price, but on the basis of delivering better value, quality and convenience. Meanwhile, fully integrated digital technologies will simplify workflows while eliminating paperwork and errors, thereby enabling collaboration and making “systemic healthcare” possible for the first time. As a result of the newfound digital freedom, consumers will have more choices, more access to information, and more control over where, when and from whom they seek treatment. In various ways, McKesson is creating this “bold new era” today.


“We’ve designed a system that fosters innovation, connectivity, renewed efficiency and evidence-based best practices,” says Burtis. “In partnership with our customers, we’re implementing the cutting-edge healthcare information technology, processes efficiencies, reimbursement solutions and connectivity tools that create a better healthcare system for everyone.”


Every day McKesson distributes one-third of the medicines used in North America, supplying more than 40,000 U.S. healthcare locations from Wal-Mart to local community pharmacies. It is the Nation’s leading healthcare Information Technology (IT) company, with software and hardware technologies installed in the vast majority of the Nation’s hospitals. McKesson’s electronic systems eliminate the need for paper prescriptions and paper medical records while providing physicians with easy and secure online access to patient information. One new offering along these lines, McKesson’s Advanced Diagnostics Management, addresses personalized medicine, helps physicians identify the right diagnostic tests and care options, and keeps patients informed about exactly how much out-of-pocket expenses to expect in real-time. 


Innovations like these lead to both lives and money saved. For instance, at John Muir Health, a 324-bed acute-care health center in the San Francisco Bay area, McKesson’s solutions resulted in a 30 percent mortality rate reduction and a 40 percent reduction in adverse drug events that result in re-hospitalization or death. According to McKesson, John Muir now has more efficient pharmacy services, increased patient safety, enhanced compliance and reporting capabilities, as well as reduced preventable adverse drug events – all as a result of working with the company. 


Similarly, McKesson’s solutions have saved the Illinois Department of Healthcare and Family Services over $138 million, while “helping people with chronic illnesses live fuller lives,” according to HFS director Barry S. Maram. “People are staying out of hospitals and emergency rooms because they are learning how to manage their diseases and stay healthy.”



Performance Cultures

The relentless focus on results is what differentiates corporate-driven healthcare reform from the bureaucracy that wastes billions and stifles innovation. Performance cultures are plainly evident in many publicly traded companies focused on healthcare like McKesson and also GE. With it’s newly minted and heavily promoted Healthymagination initiative, GE aims to channel $6 billion toward medical systems, technologies and services that are designed to drive down healthcare costs while expanding access and improving quality. The company’s goals are relatively aggressive. 


By 2015, GE intends to bring down the cost of many health procedures and services by 15 percent using GE technologies. It also plans to increase access to health-related services and technologies by 15 percent, reaching 100 million people every year. In addition, GE aims to improve quality and efficiency issues by 15 percent by refining healthcare procedures and standards of care.


“This is the right time to reposition our healthcare business, given the changes and challenges in the industry,” GE Healthcare President and CEO John Dineen said in a statement. “Our customers are looking for productivity and solutions. We will focus on the products, the process excellence and the partnerships that broaden access to healthcare and reduce its cost.”


Healthcare isn’t a sexy industry. But it is a vitally important one. And the fact is that incremental improvements within the corporate healthcare sector can have huge implications for every one of us. According to McKesson’s experience of processing more than a trillion dollars in financial transactions every year, the overall cost savings associated with moving from a paper-based system to an electronic one could potentially add up to as much as 75 percent. Think about that.


By simply establishing a stronger IT foundation, America can significantly improve its healthcare woes quickly, affordably and most important, safely. It could very well out that McKesson and GE – with their vast reach, established relationships, sophisticated technologies, systemic approaches and performance-driven cultures – are the players best suited to deliver the healthcare reform we so desperately need.


Seems like that’s change we can believe in.






About the author

Christine Arena is an award-winning author, brand strategist and trend forecaster. She is co-founder and CEO at GENEROUS, a creative marketing agency for visionary startups


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