The Crystal Ball 7

“As promised, Jaded Julie, today we are going to share the highlights of Clayton Christensen’s observations regarding chronic diseases. The spectrum of chronic diseases is extremely wide, ranging from myopia (nearsightedness), which I have had since age 13, to Alzheimer’s, which one of my friends will likely die from before this blog is posted.”

“I understand that Christensen divides chronic diseases into two major categories: (1) Intuitive chronic diseases. Their lack of clarity in diagnosis and treatment necessitates the type of medicine practiced in a multidisciplinary solution shop. (2) Rules-based chronic diseases. A single practitioner can diagnose and prescribe evidence-based or rules-based therapy.”

“Let’s look at the first category, Julie. Dyspnea (difficulty breathing) is a symptom common to several pulmonary diseases that could involve interdependent molecular pathways, genetic differences, and environmental factors. A definitive diagnosis might require extensive tests interpreted by a team of experts who can knit together their extensive experience. Their judgment would guide the decision between rigorous but unpleasant therapy and palliative care. For pulmonary medicine, highly regarded solution shops include Mayo and National Jewish Medical Center.”

“Let’s be a bit more up-beat, Curmudge, and talk about the second category, the rules-based chronic diseases. With these diseases, diagnoses and treatments are usually straightforward, but a common problem is getting the patient to comply with the prescribed therapy. For some, the effects of noncompliance are evident and unpleasant. Celiac disease is an example; if the patient doesn’t avoid eating foods containing gluten, he/she most often will have gastrointestinal problems. At the other extreme is obesity, where the results of noncompliance are more subtle and usually delayed.”

“There is also a reimbursement issue for the provider. He/she will be reimbursed for diagnosing and prescribing but not for calling the patient to remind her to take her medicine, watch what she eats, and come in for her periodic check-up. More generally, there is no procedure code for keeping the patient well. According to Christensen, ‘the fault is the misapplication to chronic diseases of a business model that was developed for the practice of acute medicine long ago.’”

“It seems to me that Christensen has laid the groundwork for eventually solving some of the problems that are plaguing health care. In short, how are we (not you Curmudge; this may take longer than your expected lifetime) going to pull this off?”

“Christensen has described the so-called ‘integrated fixed-fee provider.’ ‘They don’t need to orchestrate a disruptive value network; they can create it.’ Obviously, this must be a very large organization like Permanente in California and Intermountain Healthcare in Utah. Most of the essential elements of health care that we have discussed—the disruptors and the disruptees—are under the corporate umbrella. Care is provided in the most cost effective venue. The annual fee paid by each patient provides an incentive for the organization to maintain their wellness—not to just treat their illnesses.”

“Don’t forget, Curmudge, Christensen’s criteria of an ideal entity for managing a health care system: (1) have a long-term perspective, (2) make money by keeping us well, not beginning when we become sick, (3) care about us personally, (4) be geographically nearby and convenient, and (5) be able to make needed changes decisively. Hey, that sounds like something an employer could do.”

“And some do, Julie. Christensen’s example is Quad/Graphics.”

“Of course. They’re next to highway 41 just south of Fond du Lac.”

“They operate four medical centers—free to employees and their families—offering family practice, internal medicine, pediatrics, OB/GYN, minor surgery, lab work, rehabilitation , and physical exams. Quad is self-insured and contracts with local hospitals and specialists for advanced care. Their emphasis is on wellness, and they have programs to combat chronic illnesses. Their physicians and nurse practitioners are salaried employees.”

“I read about another company in Wisconsin, Serigraph, that ‘took the problem of employee health insurance costs into its own hands.’ Their CEO even wrote a book about it, The Company That Solved Health Care (1). For your continued study, Curmudge, there’s a pretty good review of the book in Amazon. The important teaching is that these companies have found ways to make the ‘employers as integrators’ concept work.”

“A more general conclusion is Christensen’s five- to ten-year forecast regarding integrated fixed-fee (IFF) providers. ‘Where they use disruptive business models to provide better care at lower cost, they will prosper; and overall health-care costs will drop without a compromise in quality or convenience. This is because quality comes from correct integration, and lower costs come from low overheads that are enabled by focus.’ ”

“I think his examples are easier to understand than his summary. By the way, is there more to this story?”

“Actually, Julie, there is. And we should be able to wrap it up next time.”

Affinity’s Kaizen Curmudgeon

(1) Torinus, John. The Company That Solved Health Care.