While no one was looking, Pittsburgh moved out of the rust belt into the knowledge economy.
Today, Pittsburgh is all about Meds and Eds. Pittsburgh is chock full of great home grown companies and plays host to dozens more smart visitors that provide A) direct health care services, B) services to control costs and optimize the value of health care, and C) think about new paradigms for how health care is delivered. Some of these companies want to relentlessly improve how we do things, others want to completely reimagine healthcare and press the reset button.
The evolution and future of our Steeltown was on full display this week at the Pittsburgh Business Group on Health’s (PBGH) annual symposium. This year’s topic was “Health Care at the Crossroads: Where Opportunity and Preparation Meet.” Kudos to PBGH CEO Jessica Brooks and her team for putting on a great event and providing the 350+ registered attendees with some great information and insights. Be sure to be there next year if you missed it this year.
I won’t rehash the symposium itself. If PBGH is true to form, the presentations from this year’s symposium will make their way onto the PBGH website much as 2016’s did (see here). Instead, I thought a couple of observations might be more useful.
1. Holy cow things are getting complicated! Folks like us at Tonic Advisors live the complexity of this world–its “what we do.” If you are running a business this probably isn’t the core of what you do, its a chore that you have to manage. There are times that I think an MD might be more useful to the CEO of a large company than an MBA. Figuring out what to pay someone is simple compared to figuring out the right set of benefits that person should have. It used to be just “which carrier should I use and should I self-insure?” Now days, it’s:
· Which network?
· Which specialty network?
· How do I select benefits to control costs?
· What are my options to make sure that my employees get the care they need?
· How can I mitigate the discouraging effects of high deductibles on high value care while continuing to discourage low value?
· How can I recognize the socio-economic disparities in health care and my employee base?
· How can I account for that in my benefits?
· Should I provide my own care (have clinics and phlebotomists, and MRIs and X-Rays) on site?
Helping employers navigate this very complex world is becoming increasingly important. The more globally and expansively that your benefits consultants think, the better. Fortunately, there are a lot of smart folks at smart companies locally ready to help.
2. Discernment and Perseverance matter: There are a lot of bright and shiny objects coming to market. No, not literally—I don’t mean that someone is marketing a new line of “Genuine Diamelles!” I mean that Healthcare is such a big part of the economy (about 1/6th of the ENTIRE Shebang) that everyone is trying to crack the nut on “how to provide more value at lower cost.” The result is a hundred different products and services ranging from wellness (which itself ranges from behavioral to dietary to lifestyle to mindfulness), to network selection (only the best doctors at the lowest prices), to enhanced technologies such as Artificial Intelligence, and ever better medical records and charting. I sincerely believe that there is a lot of merit to most, if not all, of these products and services.
The challenge for the CEO is two-fold. Which path will the company pursue (because you can’t pursue them all) and how long will the company give the plan to succeed or fail?
a. Discernment. You can’t pursue everything. In my experience in the African Bush (watching The Learning Channel), I know that when a lion approaches a herd of gazelle, it singles one out. If it goes after all of them it doesn’t catch any. You can’t pursue an all-of-the-above strategy. You should make choices. Not all solutions work for all companies. Culture, economics, geography, history etc. all play a role. The smartest option to partner with isn’t necessarily the company with the most probable IPO, it’s the one that fits best with your company’s needs and capabilities.
b. Perseverance. Change takes time and results are not immediate. You can’t go to the gym once and then be disappointed that you don’t have six-pack abs (believe me I’ve tried and been disappointed). Sustained effort is needed and patience is required. Find the right markers of success that indicate you are moving in the right direction, even if your bottom line hasn’t suddenly changed for the better.
3. New gee whiz technology will play a role but for the time being it will be supporting character. In the past, it was EMR’s, then it became telemedicine, and now its Artificial Intelligence. EMRs have been around long enough that they have had a big impact over time, but the impact was more of a gradual shift than a thunderbolt. I think it will be the same with smart systems and AI. I don’t think that there will be a seminal event, like turning on Skynet, that will signal the arrival of AI as a major player in the health care scene. AI and deep learning will begin to get used more and more (likely in the largest and most sophisticated types of clinical settings such as academic medical centers). We will all learn from the trials. We will learn what AI does well and what it doesn’t. The immediate challenge, for those attracted to AI, will be to find applications in which there is short term financial viability. No doubt there are such cases and the leading firms will root them out.
If you didn’t make it to PBGH this year you missed a great event but don’t worry there is always next year. In the meantime, we would be happy to help provide perspective, help evaluate options, and generally provide advice and guidance as you navigate an increasingly complex health care infrastructure.
Source: Tonic Advisors