Managers may be afraid to embrace simplicity. In business we are all scared of being called “too simple.” People confuse simplicity, which is hard to achieve, with simplistic, which is easy and usually lacking value. When in doubt, a manager may add a layer of complexity where it is not needed just to be safe. It takes courage to be simple.
Have you seen Food, Inc? Not that we need another health care problem, but this one, at least on the surface, seems to be a potentially mighty one. (Disclosure: my bias is high as my sister is a food scientist.) This exchange about genetically modified, mass produced food and increased caloric consumption leading to a higher incidence of diabetes is interesting:
Robert Kenner: When I was a kid we spent something like 18% of our income on food, today we spend about 9%.
Jon Stewart: So we’ve won!
RK: That’s great. The fact is we have really inexpensive food which is great news. The problem is now, when I was kid health care costs were about 5% of our paycheck and today they’re about 18%. … We’re not going to be able to fix the health care system until we fix the food system.
Peter pointed out that in large organizations where these practices are used, it is inevitable that individuals will be promoted until they reach their level of maximum incompetence. The unavoidable result is the runaway spread of incompetence throughout an organization.
Now Pluchino and co have simulated this practice with an agent-based model for the first time. Sure enough, they find that it leads to a significant reduction in the efficiency of an organization, as incompetency spreads through it. That must have an uncomfortable ring of truth for some CEOs.
Solution? Two show promise:
The first is to alternately promote first the most competent and then the least competent individuals. And the second is to promote individuals at random. Both of these methods improve, or at least do not diminish, the efficiency of an organization.
Or a third, luck?
The idea is to take the mind-boggling process of shopping for insurance and make it a little more like buying an iPod. Customers are greeted by a concierge. There are work stations for do-it-yourselfers and private rooms for meeting with salespeople.
Last week’s Wal-Mart health care announcement was another step in its progressive image-altering effort (or just a shrewd business move). It also happens to be a big deal. And not just on the employer mandate front. Or on the partnering with a union issue either. Or how the move increases the likelihood of reform.
It’s a big deal because it signals the rising influence of business in the day-to-day delivery of health care. From The Wall Street Journal:
The company says it supports the employer mandate because all businesses should share the burden of fixing the health-care system. Wal-Mart also said the mandate will only work if it is accompanied by a government commitment to rein in health-care costs that is guaranteed.
“…all businesses should share the burden of fixing the health-care system.” Not the burden of paying for health care, but the burden for fixing the system. Why not? Health care, on the whole, has proved year after year its ineptitude for fixing itself, its inability to reduce the cost of care, or at the least, prove its increased value. The annual dollars business spends on health care gives it the right to muddle. Business needs health care reform.
The second sentence in the WSJ paragraph above is the how: a guaranteed reining in of health care costs. Whether that’s possible is irrelevant, it’s going to happen. Reducing reimbursement is a cost cutting mechanism: CMS leads, private payers follow.
Business has efforts in place to improve quality. Improving efficiency and distribution of resources is a logical next step. It’s not necessarily a bad thing. It just is. (It may even be welcomed.) The impact on decision making at the delivery level will be significant.
Now that college is over, you may have noticed that many of you and your pals are suddenly uninsured. According to a report by the Commonwealth Fund, young adults are disproportionately represented among people who lack health insurance, accounting for nearly 30 percent of the 45 million uninsured people younger than 65, even though they comprise just 15 percent of the population.
Once you organize and take a head count, go price group health-care coverage. And after you calculate the rate at which the larger the group the cheaper the insurance, go out and gather up everyone else you can–through your massive social networks–who might be interested in the cheapest health insurance. It will only be a matter of time before your organization is so large that you can become your own underwriters. Then you can really throw some weight around.
And if you can remember that you started this venture not to make a buck but to obtain affordable health insurance–if you can stay on the nonprofit side of things and avoid antitrust laws–you might just have the motivation and support that corporations and the government are lacking to provide universal health-care coverage.
Remember pay for performance? Incenting physicians based upon quality measures or patient outcomes or productivity? A real good idea on the surface; also an idea proving difficult to implement. Anyway, new research says pay for performance compensation packages in the general business world may not achieve its intended benefits.
Dr. Bernd Irlenbusch from the London School of Economics:
We find that financial incentives may indeed reduce intrinsic motivation and diminish ethical or other reasons for complying with workplace social norms such as fairness. As a consequence, the provision of incentives can result in a negative impact on overall performance.
Something to pay attention to in this era of reformation.
Morgan Clendaniel makes a lot of sense. Enough incremental garbage. One way or the other, do something that is going to have an impact:
So, we need to forget free-market solutions, forget the public option. Enough marginal change. If someone is sick, they should get treated. Let’s accept that as our starting point and then figure out how to pay for it.
This is, of course, totally naive and politically nonviable. It also happens to be the right thing to do, and I’m confident that with enough smart people in the room, we could find a way to treat everyone. It’s really hard to argue that because something is too difficult to implement, we have to let people die, but that seems to be the point to which we’ve gotten ourselves.
Organizations (especially those in health care where high-priced, educated talent is required for existence and continued operation) who are able to leverage this reality by building internal, comprehensive education opportunities will win. Talent = everything. Education programs created by the organization to complement workers’ skills and abilities will help build and reinforce the culture necessary to create tomorrow’s (today’s? yesterday’s?) health care delivery system.
As I write this, Google is putting every book ever written online. Apple is offering video college lectures for free download through its iTunes software. Skype allows free videoconferencing anywhere in the world. The Massachusetts Institute of Technology and many other schools have made course materials available for free on their Web sites. Tutors cost as little as $15 an hour. Today’s student who decides to learn at 1 a.m. should be doing it by 1:30. A process that makes him wait 18 months is not an education system. It’s a barrier to education. (Jack Hough, MSN Money)