Making an Impact in a VUCA World. Health Data Summit NAHDO 28 th Annual Conference December 11, 2013
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1 Making an Impact in a VUCA World Health Data Summit NAHDO 28 th Annual Conference December 11, 2013
2 Leadership and Change The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function. F. Scott Fitzgerald, "The Crack-Up", Esquire Magazine (February 1936) 2
3 Today s Agenda Living in a VUCA World Complexity: Knowledge and Beliefs Tsunamis of Change in Healthcare Data and Creating Impact Providing Value and Insight 3
4 Living in a VUCA World Volatility Uncertainty Complexity Ambiguity Developing Leaders in a VUCA Environment Kirk Lawrence UNC Kenan-Flagler Business School 4
5 Evolutionary Disconnect: Our Brains and Complexity Drowning in Data and Options Medical Information is doubling every 5 years, and much of it is unstructured To keep up with the state of the art, a Dr. would have to devote 160 hours a week to perusing papers 81% of physicians report spending 5 hours or less per month reading journals The Watchman s Rattle A Radical New Theory of Collapse Dr. Rebecca Costa 5
6 What happens when complexity outpaces our ability to make sense of things? When complexity makes knowledge difficult to attain We substitute knowledge with beliefs The Watchman s Rattle A Radical New Theory of Collapse Dr. Rebecca Costa 6
7 But the world does not stand still 7
8 The four tsunamis that are reshaping everything (not just medicine). Dr. Jay Want Want Healthcare, LLC 8
9 You are here: HC and the American economy Health care cost is consuming the American economy. 9
10 The first tsunami: red ink HC 6% of GDP in 1960, 17% in 2013 HC eats up nearly all productivity gains in the 2000s 10
11 Costs are Unsustainable Average spending on health per capita ($US PPP) Total expenditures on health as percent of GDP Data: OECD Health Data 2005 and Schoen C, Davis K, How SKH, (6):w457-w
12 Health Care Costs Have Wiped Out Real Income Gains $9,000 Monthly Income for Typical U.S. Family of Four $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ $ 870 for inflation $ 945 for health care $ 95 for spending $1910 more income Inflation on Non- Health Care Goods Health Care Taxes, Premiums, Expenses Net Available Income Source: "A Decade of Heallth Care Cost Growth Has Wiped Out Real Income Gains For an Average US Family," Health Affairs, September Center for Healthcare Quality and Payment Reform, Network for Regional Healthcare Improvement. 12
13 Value: What s $2.8 Trillion Buy? Quality: U.S. 37 th in overall quality, between Costa Rica and Slovenia (World Health Organization, 2000) Medical Inflation 2-3 X the general rate of inflation Experience: Patient Satisfaction inversely correlated with regional spending Note: Estimated waste of $750 Billion (25% of spend) per Institute of Medicine,
14 The Second Tsunami: Information and Big Data Moore s law Information is increasing at an exponential rate We are loaded with data but no information. Need Business Intelligence to manage populations 14
15 Big Data is Everywhere 15
16 Big Data Creates Value in Several Ways Creates transparency Enabling experimentation to discover needs, expose variability, and improve performance Segmenting populations to customize actions Replacing/supporting human decision making with automated algorithms Innovating new business models, products, services 16
17 Big Data in Healthcare Comparative effectiveness research Predictive analysis Clinical decision support systems and advanced analytics Transparency Personalized medicine 17
18 Five distinct big data pools exist in the US health care domain today with little overlap in ownership and low integrations. Pharmaceutical R&D data Owner: Pharmaceutical companies, academia Example datasets: clinical trials, high throughput screening (HTS) libraries Integration of data pools required for major opportunities Clinical data Owners: providers Example datasets: electronic medical records, medical images Integration of data pools required for major opportunities Public Datasets Public Health Government (Local, State, Federal) Community Data Activity (claims) and cost data Owners: payers, providers Example datasets: utilization of care, cost estimates Patient behavior and sentiment data Owners: various including consumer and stakeholders outside health care (e.g., retail, apparel) Example data sets: patient behaviors and preferences, retail purchase history, exercise data captured in running shoes 18
19 The Third Tsunami: Technology Less of: More of: Moving beyond latest tech to offer solutions to enhance health care experiences, contain costs, and improve the health of Coloradans. 19
20 Watson Goes to Med School 20
21 Big Data and Technology Come Together 21
22 The Fourth Tsunami: The Empowered Individual Individuals take on more financial responsibility Web decreases information asymmetry Consumer Reports comes to health care--literally 22
23 Patient engagement is the Blockbuster Drug of the Century. Leonard Kish Forbes, September 9,
24 The Fourth Tsunami: Consumerism in Healthcare 3.0 World Customer expectations are rising exponentially Other industries have taught Americans to expect their experiences to be individualized and automated Disruptive innovation: minute clinics, other professionals, telemedicine, remote monitoring, personal health records, communities of care; geography increasingly irrelevant 24
25 Tsunamis are Leading to Mass Customization BIG MED: Atul Gawande New Yorker August 13, 2012 Getting to Healthcare 3.0 combines quality control, cost control, business intelligence and innovation. It will test all of our skills and values. 25
26 Looking to the Future: Population Management Source: University of Rochester Medical Center 26
27 Antidote to VUCA: VUCA Prime Volatility Uncertainty Complexity Ambiguity VISION Understanding Clarity Agility 27
28 What you are being asked to do: Embrace a larger vision and understanding of your business Take a systems and team approach; individuals working alone cannot keep up with the flood of information generated in accordance with Moore s Law Create Insight not Data Demonstrate humility while being brave and bold 28
29 Einstein The significant problems we have cannot be solved at the same level of thinking with which we created them. 29
30 Contact Information Phil Kalin, President and CEO Pinnacol Assurance Contact: 30
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