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Innovation for Healthcare:

Creating Opportunities to Explore, Expand & Excel!

Kenneth A. Rethmeier, DrPH

European Health Management AssociationAnnual Conference

June 25, 2009

Goals for the Day

• Excellence in uncertain environments… the mandate for critical thinking, creativity & innovation…for performance!

• On-going healthcare reform efforts lead to exploring market choices…exploring organizational performance, competitive advantage…creative & critical thinking… introducing tools to “rethink our thinking!!”

• Implications for leading others to take risks & manage innovations…”success is a journey”…!

• Excellence in uncertain environments begins with the journey…

Context

E3 used by permission from The Rethmeier Group, LLC

Ideas Relationships Processes Systems

explore™

expand

excel

Shaping minds to build business.™

Payoff of innovation…performance!

Top performers generate 75% revenue fromproducts &/or services…did not exist 5 years ago…

poorest performers…10%….if you’re into mediocrity, then try 41%...PriceWaterhouseCoopers

Innovation Survey, undated

Payoff of innovation…results!

performance! = f(trust…idea management…+)idea management is about…

•seek & gather ideas/knowledge

•ideas/knowledge…freely accessible

•encourage diversity of thought

• delayed premature judgment

A brief exercise

“Best in Class”…who?…why?…. Who’s 2 or 3…difference?

How did they survive? Competitive advantage?

What do these results mean for health care reform?

Assumptions for our time…• Healthcare….cuts to core & manifests a country’s social values• Demographics….work against future funding of healthcare systems…

ratio >65/labor force • Healthcare costs….rise exponentially w/out constraints…never

enough funds regardless• Policy makers….set the tone & parameters of the environment for

opportunities of change• > Paternalism in systems constrains creativity & ideation….ergo, less

optimism for reform • Healthcare consumers …smarter & more demanding of their role in

managing their health• Innovation….critical leadership competency… sustained superior

performance• Time is now to explore options & focus on innovative solutions to

create your future & NOT take one from strangers!!

Operating definitions….

• “In-no-va-tion”…15th century– Introduction of something new…idea, method or

device…”novelty”– For our context, as long as it is new to you or your

system…it is an innovation

• Healthcare “re-form”…14th century– To put or change into an improved form or

condition…removal of faults or abuses…changed for the better

– For our context, any change designed to improve the current state is “reform”…(Hint: there are “degrees”)

• “Cre-a-tiv-i-ty” …14th century– To produce through imaginative skill

Areas for exploration…be willing to go where no one has gone before!

• Coverage…• Services in the program…• Cost sharing…• Management of the benefit package…• Processes of care & outcomes…• Structure of the “plan”…• Expenditure control…• Payment structure & guidelines…• Primary care physicians…• Degrees of system integration…• Spectrum of providers…

A Model of reference… Innovation!

….it’s all about creating value!

IDEATIONIMPLEMENTATION

DEVELOPMENT

Creative

Thinking

Testing Evaluation

Convergent Thinking

Tool #1… “Vision vs. Current Reality”

Tool #1…

Tool #1…

THE

V IS ION

Forces Forces supporting against

Tool #1… Practice Fields:

Identify & define the “vision” for healthcare reform

Productive dialogue to promote understanding & aligned thinking

Recognize & discuss/uncover what is the “today”…do we really know?

Brainstorm potential strategies & focal points for innovations…to close the “gap”! Promotes awareness, reflection, understanding attitudes & beliefs

Visions…Organizing, Learning & Environments for Changing

VISION

ORGANIZATION DESIGNTO DELIVER THE VISION

THINKING INTERACTING

Visions Develop... Capacity for Learning

• Perceive reality through open-mindedness, observation & feedback

• Make meaning & create knowledge• Take effective action toward the vision

LEARNING includes the ABILITY to:

Bottom Line? …avoid the trap of “mental models”…not transparent!

Perspectives on re-thinking healthcare reform….time, space, & clinical-policy…..!• Time…defined in terms of the focus of the

model of “clinical” intervention…primary, secondary or tertiary prevention…i.e. the earlier the “time” the greater the impact on “quality & cost”…

• Space…defined in terms of the depth of potential reform…i.e. the deeper the effort bores, the greater the impact on “transformation”…

• Clinical – Policy ….each one affects the other…

Time & Space…..! (Hint: this is all about “our” thinking)• Time…. Prevention Primary Secondary Tertiary

+ risk factors +early detection & + Tx pain & treatment discomfort

• Space…. Events………………………React

Patterns/Trends……….Anticipate

Systemic Structures…….Design

Mental Models………………Transform

Time & Space…..! (Hint: this is all about “our” thinking)

• Time…. Prevention Primary Secondary Tertiary

+ risk factors +early detection & + Tx pain &

treatment discomfort

Time & Space…..! (Hint: this is all about “our” thinking)

• Space…. Events………………………React

Patterns/Trends……….Anticipate

Systemic Structures…….Design

Mental Models………………Transform

The 3rd Dimension…policy vis-à-vis clinical continuum…..! (Hint: this

is all about “our” thinking)

Policy Clinical

Meaning…some “innovations in healthcare reform” are primarilydirected at clinical medicine…(e.g. advances in technology), whileothers are driven by changes in governmentalpolicy (e.g. DRG’s & prospective payments)

What gets in our way of thinking…?

The card exercise…

“Begin Here”!

The basic proposition…today’s thinking based on philosophers of 2,500 years ago... • “Gang of three”…Socrates…Plato…Aristotle…

– the brain is self-organizing– intellect is driven by “relationships” or “patterns” & connecting the dots– “ultimate truth” is somehow found by removing all that is wrong

• Consequently, most thinking is based on:– events & lessons of the past…quickly repeat– knowledge of standard situations & the ways of dealing with them is sufficient…oriented around stable systems– “argument & debate”...primary idioms for current thinking…– need to develop “design” or “constructive” thinking

Hx of Thinking…the origins...

Vertical & Lateral Thinking…key characteristics….

• Vertical…– selective– moves if direction to move– analytical– sequential & follows patterns– correct at each step– uses negative to block off

certain pathways– concentrates & excludes

irrelevant– categories, fixed labels– most likely paths– finite process

• Lateral…– generative…disruptive…– moves to generate

direction– provocative– makes jumps & cuts across – does not need to be correct– no negative– welcomes chance

intrusions– no fixed labels– explores least likely– probabilistic process

As William James, philosopher said once…

“A great many people think they are thinking

when they are merely rearranging their prejudices.”

American Philosopher

1842-1910

CANCONTROL

CANNOTCONTROL

PROACTIVE

INACTIVE

MOVEFORWARD

WASTEDTIME

GIVINGUP

LETGO

Tool #2… “Can –Cannot”

CANCONTROL

CANNOTCONTROL

PROACTIVE

INACTIVE

MOVEFORWARD

WASTEDTIME

GIVINGUP

LETGO

Tool #2… “Can –Cannot”

CANCONTROL

CANNOTCONTROL

PRO

IN

CANCONTROL

CANNOTCONTROL

PROACTIVE

INACTIVE

MOVEFORWARD

WASTEDTIME

GIVINGUP

LETGO

Tool #2… “Can –Cannot”

Practice Fields:

Clarify & confirm Help setting areas for potential “brainstorming”

Furthers your learning agenda

Exposes “blind spots” +/-

Promotes critical thinking

Let’s stop for a minute….!

Stand up…stretch…turn to someoneat different table…

Introduce yourself…

Ask them what their “most critical healthcare reform issue is”…tell them yours…

Tool #3… “Brainstorming”

Brainstorming For Innovations

Tool #3… “Brainstorming”

Brainstorming For Innovations 1.Select one of the “Move Forward”

critical issues you identified…

2.Timed idea generation…three sets… 1 ½ min…1 min…30 seconds

3.Write down as many ideas you can…

4.Collectively review all of the ideas separating out best to one side

5.Be prepared to report to the group what you identified as the top “3”…

6.Why those “3”? Now pick only “1”…

Steps to Follow:

Tool #3… “Brainstorming”

Brainstorming For Innovations

Practice Fields:

Anytime you need creative thinking

Approaches & techniques can vary…

Keys to successful efforts:• do not judge ideas in process• promote extreme thinking• all ideas are good ideas• takes 100 ideas for “1” good one• set clear expectations & goals• leaders…take off your “leader” hat!

Have some fun! (Hint…yes….!)

Tool #4… “Blue Slips”

For Capturing &Organizing Thinking…

Practice Fields:

Capture ideas, collective wisdom & knowledge

Stimulate balanced thinking…

Minimize narrow-mindedness

Debrief meetings

Keys for success…• facilitator provides “keyword”• key word in upper left corner• one idea per blue slip• as many ideas as possible• substitute “post-it” notes to stick on walls….

“Balanced thinking in an unbalanced world”…

Tool #5… “the Ice Berg”

Concepts for Use:

Deeper means more effective outcomes…

Seek to uncover causes…

Ultimate exploration & discovery moves us toward exposing our mental models…in healthcare that will mean our “core social values” of our system…

Let’s see what we find!

Tool #5… “the Ice Berg”

An example:

England & Wales – “World Class Commissioning”… decentralized contracting for primary care services…what does this mean?

React………………Central to Local Contracts

Anticipate………Provider Certification

Design…………….Curative to Preventative

Transform………Performance Based on Health Status

- person-centered= patient - “consumer” driven - MD as facilitator/coordinator - improved health status

Tool #5… “the Ice Berg”

An example:

Germany… “free pricing” of pharmaceuticals to “best care” assessment…what does this mean?

React………………Cost-Benefit Analysis Determines Reimbursement

Anticipate………Rational Model for Management of Future Costs

Design…………….”Take More Self Responsibility”

Transform………”Times of Abundance Are Gone…Prioritization”

- significant implications - “unspeakable”…there’s an elephant in the room…! - how do you prepare & change for success?

Tool #5… “the Ice Berg”

Your turn:

1.Your best idea….

2.Walk through the “ice berg” & see where it takes you…

3.What level of “reform” could you achieve?

4.Take the next step…

Tool #5… “the Ice Berg”

Your turn:

Tool #5… “the Ice Berg”

Practice Fields:

Explore & expand a dialogue re current health care reform efforts to uncover the thinking behind the initiative

Examine & identify opportunities for innovations in response to OR proactively pursuing reform efforts

To test how far you can create systemic change

Challenge your mental models…in this case…the business model

Tool #6… “Space-Time –Policy”

Your ideas for “reform”:

1.Match your ideas by Stage of Prevention & Level of Reform.

2. Where do they “fit” in the table? What implications?

3.Select the one “you” feel has the best opportunity for successful imple- mentation.

4.Take the next step… testing, evaluation & implementation/ diffusion…measuring impact…!

Level of

ReformPrimary Secondary Tertiary

Event

Trends

Design

Transform

Stage of Prevention

Tool #6… “Space-Time –Policy”

Practice Fields:

Scenario planning to test moving down & left…

Uncover current thinking of stakeholders in the process

Illustrate for decision- makers value of a different “business” adding value

Foundation for strategy development…

Level of

ReformPrimary Secondary Tertiary

Event

Trends

Design

Transform

Stage of Prevention

Levels of Prevention

Primary Secondary TertiaryLevel

Of Reform

Events

Trends

Design

Transform

Time – Space Assessment Matrix

A Call for Leading Innovation…

McKinsey survey of 700+ executives…globally reveals their thinking & actions….

70% say innovation one of the top “3” drivers for growth in next 3-5 years

65% report gap between “aspiration for innovation” & “execution” …imitation of others not the answer

No “best practice” to seed/cultivate innovation… 94%

3 key fundamentals: strategy agenda, tap existing talent, & build trust within organization

Culture…ideas valued…safe/encouraged to express those ideas… oversee risk collectively!

So, then how do we embed creativity, critical thinking, & innovation…?

• Introduce & diffuse new knowledge, skills, & create practice fields…

• Explore our creative styles…to leverage new perspectives on “old” problems & new opportunities

• Maximize our capacity as leaders…to guide others toward new levels of performance…an exercise of quiet yet persistent will…!

• Senior management team development…

Creativity: Getting to the “Open” Mode

• Space…undisturbed & quiet area…make it special to encourage lateral thinking…!

• Time…specific period…start…stop• Time…play with the problem… defer the decision to later…• Confidence…avoid fear of making a mistake…morph “org” DNA to “this is how we do things!

• Play…humor…accelerates us to the “open” mode…leadership sets the tone!

“It is impossible to estimate how many good ideas are abandoned each and every day, the results of difficult to manage lateral relationships.”

--- John Kotter Power and Influence: Beyond Formal Authority

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A final question… an equation for success…but, what does it mean???

CQ + PQ > IQ

Hint: Tom Peterson…author of The World is Flat!

The power of one...

“Leadership is…having the courage to act. To do what is right, not to wait and see, not to wait and hope. But the courage to get involved, now.”

Author, unknown.

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