The Big Short and healthcare

affordable-effective-healthcare

“The healthcare industry is very much like the financial industry before the crash,” said Michael Lewis, author of The Big Short, addressing the American Hospital Association (AHA) in July 2015.

“It is opaque, complex and run by experts serving a group of consumers who don’t understand how the industry really works.”

I recently finished listening to The Big Short and shortly after had the pleasure of seeing the movie. If you have not read it, I strongly urge you to consider reading the book and then seeing the movie. They make a nice pair.

You might never expect such a great story about a financial meltdown, but the characters, the story and its application to our healthcare marketplace are compelling. Much like the author’s comment above.

If you choose not to read or listen to the book or see the movie, here is the book in a sentence: Several unrelated and eclectic groups of financial outsiders thought the housing market was going to go bust and made billions betting against conventional Wall Street “wisdom” in 2007.

The big short, healthcare style

What is the conventional wisdom of the day in healthcare?

Here is how I would paraphrase conventional thinking today about healthcare: Americans may be getting less healthy, but we must be making great progress because our local hospital seems to be adding another parking garage.

At the AHA meeting, the moderator asked Lewis, “How do you apply Moneyball to healthcare?”

Moneyball is another excellent book from Lewis. It details how the manager of Oakland Athletics Major League Baseball team built a successful franchise out of undervalued professional baseball players and executives.

Lewis answered bluntly, “Prevention is the whale in the room, but incentives are arranged badly.”

Wow! In the audience, I could not write this stuff down fast enough. Then, while I looked around expecting all these C-Level Hospital executives to be calling for Lewis’ head, there was a subtle nodding and murmur of agreement.

Huh?

Lewis was keen to mention that he really had no idea how the healthcare marketplace worked, yet had no problem telling these execs that their king had no clothes. Even more unbelievable, the executives seemed to agree.

Here is my take: Healthcare profits are going up while the number of Americans that are overweight, sick and medicated is going up at a similar rate. We cannot fix healthcare until we heed Lewis’ comments and address the whale in the room, prevention.

By focusing on what we can do better, as both patients and health professionals, we can always improve. For patients, that means taking advantage of information on healthier lifestyles. For us in the industry, it means making information more accessible and easier to use.

From automated enrollment processing to mobile apps, we should be using cutting-edge healthcare software to optimize every process and improve patient care – even before we see them.

After all, we don’t want to short our most precious resource – our health.

Mike Hurley

Mike Hurley is the industry manager for Health Insurance at Hyland, helping health insurance organizations transform business processes that drive value for members, providers and employees. Mike works with current and prospective customers to use our award-winning product, OnBase, to drive business transformation. He is also responsible for our high-value, high-impact health insurance solutions, the like Mobile Medicare Enrollment Solution for OnBase. Prior to joining Hyland, he was the founder and president of Swim Lane Software, LLC. Hurley founded Swim Lane in 2007 to create a solution that leveraged Software as a Service (SaaS) technology to automate the processing and adjudication of Medicare Claims through unique use Business Process Management (BPM) and Business Rules Management Systems (BRMS) technologies. Preceding Swim Lane, he founded Green Square in 1997 as a national consulting practice that connected technology with business strategy. As a boutique services firm, Green Square was aimed at driving stakeholder value at over 25 BlueCross BlueShield plans in the U.S. Prior to Green Square, Hurley founded Avalon Technologies, Inc., an award-winning systems integrator focused on Enterprise Content Management (ECM), workflow and Optical Character Recognition (OCR) technologies.

1 Response

  1. Scott McCabe says:

    Exactly! Right on. I have been saying this for almost 20 years! If you look at the financial industry back in 1980-1990 That is where healthcare is today. Back then there were many community local banks. Then the advent of the ATM card which actually was developed by Sanchez Computer Systems, ultimately purchased by FISERV in Malvern PA. This required a national network of connected banks and financial system, the Birth of the Federal Reserve as the clearinghouse at the national level to manage this national network. The community banks had to be rolled up into the larger institutions like Wells Fargo and others. Now we had access to our money whenever and wherever we wanted with our ATM cards. I remember a friend being summoned to the Bank of Chicago from Philadelphia to demo this amazing card –the MAC (Money Access Card) card that would enable you to access your money from anywhere and anytime.

    The same is happening in healthcare today. We are connecting our health information through exchanges ultimately to one national exchange and all the local physician practices are being rolled up into the larger health systems. Eventually over the next 10-15 years we will see a national healthcare exchange and then we will start to see the big players crumble again and we will go towards the middle again and see regional and local healthcare providers once the larger ones aggregate all the systems. It is a fascinating thing to watch and evolve.

    We have come a long way but in many ways we have a long way to go.

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