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Corporate Interest in the Delivery of Care

Now that the iProtean, now part of Veralon Symposium has concluded and we have a rich source of new material from our experts for the upcoming courses, we will from time to time feature select abstracts from our experts’ interviews. Subscribers will see new courses such as Health Care: We Have a Problem; Doing More with Less; Due Diligence on Deals; Alternative Sources of Revenue; Physicians and Value/Risk-Based Reimbursement; Involving Finance in Strategic Planning; Physician Burnout. Our experts include Dan Grauman, Marian Jennings, Nate Kaufman, Anne McGeorge and Brian Wong, M.D.


Today’s feature is from Dan Grauman and his thoughts on the recent interest by corporations in taking on healthcare.


Interviewer: Why is corporate America seemingly interested in taking on healthcare? Whether it be Amazon, Wall Street or Berkshire Hathaway or CVS/AETNA?


Health care continues get a lot of attention on a national scale by corporate America. Primarily this is because how significant a percentage of our economy goes to healthcare—nearly 20 percent. This includes hospitals, physicians, health insurers, pharmaceutical companies, medical device manufacturers, etc.


So when you have an industry that big and there’s disruption and change, all of which characterize our industry, there’s also opportunity. At the same time, large employers for years have been concerned about the cost of healthcare, the cost of the premiums that they have to bear for their work forces. So these large employers are paying attention as purchasers of healthcare services; they want to influence the delivery system and make sure it’s providing care in the most efficient way possible. They want to pressure the insurers and the pharmaceutical companies that are in the middle, if you will, and at the same time corporate American thinks it can do it better if it gets involved in a more meaningful way.


The new disruptive technology-driven companies are very sophisticated in terms of supply chain and other business processes and they look at their core competency and expertise and ask, “What if we translate and deliver this and apply it to healthcare delivery? Perhaps we can help this industry do better and at the same time help ourselves.


Interviewer: Will they better manage care and cost than the traditional players: hospitals, physicians and insurers?


There has been a long-term debate and discussion about whether anyone could help hospitals and physicians practice medicine in a better and more efficient way. Are the physicians, who have so much control about what care is rendered and how it’s delivered, the only ones who could really change the delivery of care?


The traditional model has been for health insurers, by threatening to deny payment for certain types of care, to try to influence care. It hasn’t worked very well and one of the well-known facts is that there are significant variations across the country in how medicine is practiced. There may be some valid reasons for some of those differences, but some of the differences are so stark that it doesn’t really make sense.


But the fact is that if you look at the way a particular disease or healthcare problem is handled in one market versus another across the country, you see significant variations. And the argument goes that if corporate America—the Amazons and Berkshire Hathaways and Googles—could reduce those variations and get more consistency about how medicine is practiced, then care and cost would be more favorable.




The Board’s Role in Leading Through Transition, iProtean, now part of Veralon’s latest advanced Governance course, now appears in your library. It features Karma Bass and Marian Jennings on issues such as dealing with uncertainty, new elements for evaluating the CEO, prudent risk-taking, critical questions, recommended practices, destination metrics and changing over time.



For a complete list of iProtean, now part of Veralon courses, click here.



For more information about iProtean, now part of Veralon, click here.