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What Makes an ACO Work – part 2

What Makes an ACO Work – part 2

This post is part 2 in a series of 5 that looks at Accountable Care Organizations and what will make them work as intended this time around, unlike managed care in the 90s.  For this post, I wanted to focus on why we even need payment innovation in healthcare. Innovation for its sake, when so much of the fundamentals in the healthcare system are in need of repair, would be superfluous. But changing the way we pay for care, which changes the incentives for practicing necessary medicine in a fixed capacity market, is vital to the survival of the system as a whole.

Unnecessary Medical Services The Atlantic
Source: The Atlantic

Innovative Payment Ideas May Save Healthcare

In a post healthcare reform world, there will be a primary care provider shortage.  Regardless of the number of primary care providers existing pre-healthcare reform, this shortfall was bound to be inevitable when you add millions of new patients into limited bandwidth. There is only so much “care” to go around, and while technology can automate some of it, not all medicine practiced today is needed. The Institute of Medicine estimated that in 2009 approximately $210 billion was spent on unnecessary medical services.  This cost becomes a great place to start – by removing what we do not need.

The other deeply relevant factor in this equation, probably even more so than care availability and cost, is that the overall health of Americans is in steady decline. This likely bodes for a sick, and expense, future.  As you can see from the graphic below, the trends in diabetes diagnosis alone have become alarming. Keep in mind that an average diabetic cost their insurance plan approximately $6,000 to 10,000 per year. Also, based on a recent survey conducted by Consumer Reports Health, diabetes patients spend an average of $6,000 annually on costs for treating their disease.

Source: CDC – The Growth in Cases of Diabetes from 1990 to 2010
Source: CDC – The Growth in Cases of Diabetes from 1990 to 2010

So, let’s jump in a little deeper and discuss how healthcare is paid for today and into the near future. To get a background on what we will cover in this discussion, please refer to my previous post here.

The payment model spectrum

payment model spectrumThe adjacent image shows a spectrum of how healthcare is managed and paid for in the United States. The area in lighter blue represents the monies paid into the “system” for care, while the darker blue shows the amount “at-risk” by the care providers.  The intent is to move away from a fragmented fee-for-service model that only responds to volume, has limited integration across care providers, and treats health in a reactive model. Many label this as “sick-care.”

The goal then would be to move toward an integrated model that aligns incentives around what is really valuable and aims to provide a great patient experience, quality care, and controlled costs. Let’s refer to this as true “health-care.”

To understand why this spectrum must move from the traditional model to a shared-risk model, I want to explain the misalignment of the current model through an allegory.  Think of your health and your doctor through the lens of your automobile and your car mechanic. You want your mechanic only to fix what is broken, quickly, and at a good price. You also expect him to spot trouble before it arrives and be honest with you in how much things cost.ACO Explanation - mechanics working on a car


This model is essentially a la carte, pay as you go. So for every service given, a fee is added to the bill. Many would look at that statement at face value and claim that it is just market economics, and people will only “buy” what they can afford. I have a few retorts to that thinking.

First, buying health is not like purchasing consumer electronics – when it comes to their health or life, consumers want only the best and often – more is considered better. Statistics are frequently cast aside because everyone wants to be the recipient of the expensive and potentially unproven care regimen regardless of its efficacy. In behavioral economics, this is known as the “bandwagon” effect.

Second, consumers are not paying for the service – their insurance company is.  Or in the event they are uninsured and receive care at a hospital emergency room, the government or another entity is likely paying for it. I make no issue with government sponsored or government reimbursed care. I simply point out that in either case, the purchase decision consumers make (the patient) are not the same thing as the buyer – so there is a discounting that is applied in consumer’s minds. The result is more services, more fees, and a spending trend that will bankrupt the country.ACO Explanation - mechanic diagnotic test

So using our car mechanic model, the consumer wants to get every diagnostic test run on her car, regardless of their proven effectiveness and sends the bill to her auto insurance company. And if the tests were not useful, or unnecessary or did not yield results, it would still have to be paid.

By the way, in real life, this scenario would be a fallacy as auto insurance only covers accidents, not routine maintenance or “wear and tear.”  There is a clear reason for this – it is financially untenable.  Why then should healthcare be forced into this payment model when it has proven to be unsustainable?

Pay-for-Performance / Quality-Based Incentive Programs

This model is a step in the right direction.  Here health care providers are being paid more for services when they achieve desired outcomes in efficiency, quality and patient safety measures.  This approach is a smart modification to the open market model of fee-for-service in that it creates the right incentives. But the misaligned incentive of more services for more money, unfortunately, still exists.ACO Explanation - mechanic working on a car with customer

In our car mechanic example, the consumer would still get every diagnostic test run on her car, but the mechanic would be paid more when the tests were proven to yield results. Consumers would only go to the best mechanics that have proven their quality.

In a world where only those who can afford insurance get it and the rest pay cash, this model would work very well. Insurance plans would negotiate with the providers that offer the best performance and highest quality. But healthcare is about our entire population. And under healthcare reform, many more patients will be entering into the system. Therefore, any form of care financing that encourages more cannot be sustainable across a population. It is the classic tragedy of the commons.

Bundled Payments for Episodes of Care

The bundled payment model creates a set of high-efficacy, evidence-based services for a given episode of care. A single payment is then given to the care providers for all clinically related services.  The actual providers assume the clinical risk for items such as complications and readmissions. This coordination creates a sharing of the risk between insurer and provider and establishes a baseline of “accountable care” for a given health episode. “Bundles” are created for many of the most common episodic health needs.

ACO Explanation - mechanics lots of mechanics on a carGoing back to our mechanic example, this is equivalent to going into a well-established chain that has fixed prices for known services, like changing out brake pads on your type of car. How is this done profitably in the auto world? Simple, the mechanics are experts at certain types of services on specific types of cars and have honed their skills to the point of being highly accurate in their estimate of time and materials. In as much, they can offer a known cost to the consumer, which is much more attractive than an open-ended “we will get back to you.”  Healthcare should be no different. Whether it is the insurer, government or individual who is paying, we all need to know how much it is going to cost up-front to make a smart decision with fixed resources.

But like mechanics, not all providers are equal. Some are quite good at certain services and have developed “centers of excellence.” One example is the great orthopedic surgeons that have 10,000 “scoped knees” under their belt. They have mastered this procedure and are confident in their ability to deliver it at a fixed price. So just because a hospital wants to provide a service, does not mean they should or that they should be paid as much as the center of excellence. If hospitals would focus more on developing these strong disciplines, the market would very likely respond by generating more business in the areas they are the best at serving.

Patient-Centered Medical Homes (PCMH)

Bundled payments work very well for episodic care. But not all care is episodic. How do we treat the every day acute illness and ongoing wellness with the same financial consideration? This situation is where Patient-Centered Medical Homes come into the picture.ACO Explanation - mechanic chain

In a PCMH, a “primary” person, usually the patient’s primary care physician (PCP) coordinates a team of care providers who share responsibility for a patient’s care. Moreover, when required, the PCMH can arrange for the patient to receive care from other qualified physicians. This situation includes caring for the patient at all stages of their life including end-of-life care. A PCMH also assumes responsibility across the spectrum of care needs: acute, episodic, chronic, and preventive.

In our ongoing example, the primary technician at your local automobile garage would take responsibility for your car, and coordinate getting it fixed and keeping it running, as needed, with other auto technicians as necessary. You, of course, would be willing to pay an on-going fee to the mechanic to ensure it happens. If your car goes bust, the risk is on the mechanic who was being paid to ensure it was running smoothly.

To me, this model makes tremendous sense as a consumer. I want to have one guiding voice across all of my needs and all of my life stages. It would result in a deep, trusting relationship with my primary care provider. However, it does have its drawbacks. Coordination is expensive and time-consuming and requires the infrastructure to pull it off. This fact means PCMHs are out of the realm of possibility for small practices. It would take a vertically integrated hospital network, an independent physicians network, or a large practice to afford the necessary capabilities and be able to handle the financial risk.  Does this mean the end of the solo doctor? Perhaps. It may be one of the consequences of providing healthcare to everyone.

Accountable Care Organizations (ACOs)

So now we come to ACOs. These entities, which include both PCMHs and other providers, deliver coordinated care across a set population, which can be geographic, disease, or condition specific. The ACO is evaluated against, and subsequently paid upon, a benchmark for the total cost of care across the population, which incents them on their efficiency. Moreover, they are provided quality bonuses for superlative care. From a risk-sharing perspective, ACOs range from partial risk to full-risk.  With the higher risk comes much higher potential for profit.

So how are the benchmarks set? They are calculated using historical and trend data across a patient population.  Within the ACO, the lead provider is paid and is then responsible for distribution to all downstream providers. Like the PCMH, this requires another level of infrastructure that solo practitioners can likely not afford. But the point of population management is to aggregate the patients and their care in the most effective manner. The independent physician just does not make sense in this for care financing.

In our final car mechanic example, the ACO would be equivalent to your local garage being responsible for the maintenance of all the cars in your neighborhood. Each neighbor would pool their funds to pay the mechanic, who would take responsibility for all of the cars. Of course, you would all need to agree on the set fee, which is the hard part. It would be easier for the mechanic to take on risk if all of the cars were of the same model, or the same maker, or of a similar year.

Likewise, ACOs are most easily established around a disease state or chronic condition, due to the homogeneity of the patient population for which the ACO is assuming a risk. A fundamental success point for an ACO is that a population’s “risk” increases as it becomes more heterogeneous.

As you can see in the adjacent image, ACOs requires coordination across the ecosystem of stakeholders. The country has seen ACOs created around oncology, cardiology, and diabetes care. This case is because most of the care is provided through a set group of specialists, thus reducing the need for more coordination. ACOs will prove their worth when they are capable of being formed around a standard population of patients based on geography. This fact is where tremendous coordination will be required.

ACO Operating Model
Source: Risk Managers Blog


What will make Risk-Sharing Work?

So whether it is bundled payments, PCMHs, or ACOS, or a combination of all three, an infrastructure needs to be in place to enable them to be operationally sound and financially successful.  The healthcare system needs to invest capabilities that align incentive models around the Triple Aim (cost, quality, patient experience).

To your health,

The Team at imagine.GO


ROI in Healthcare

ROI in Healthcare

I had two unrelated experiences in the last 2 weeks around return on investment in healthcare. One was a question from a social media follower on how I approach ROI, and another was reading a BLOG entitled “ROI in Health IT is More Than Just the Pricetag.”  I disagreed with the BLOG’s premise as I feel that Healthcare IT projects are some of the most costly and poorly executed across all industries. I decided to write up a short post on this subject.

Can healthcare have a return on investment?

The cost of healthcare should be a primary concern for all of us. Healthcare Reform, while providing access to more consumers, does not address the underlying problems of escalating costs.  And costs are most certainly rising. In the 2008 Robert Wood Johnson Foundation publication entitled High and Rising Health Care Costs: Demystifying U.S. Health Care Spending, you can clearly see that unless the model changes, and cost controls are implemented, the healthcare system as we know it today will implode.

RWJ High and Rising Health Care Costs
Source: Robert Woods Johnson Foundation

I responded to the BLOG author that cost matters more than anything else. If we do not reign in cost, we will bankrupt the system given its current trajectory. In my experience, many – if not most healthcare models do not produce a viable patient health outcome compared to their cost.

Likewise, we are often misguided to make statements like technology will solve our problems. Healthcare companies produce loads of unused and unusable technology. It is now the time to invest in creating an experience that produces known outcomes – and whatever technology is required to create those experiences, and then go forward. But to lead with the constant battle cry of “technology will save” us, whatever the cost might be, takes the care out of healthcare.

Healthcare Does Have an ROI Equation

I like to think ROI is quite definable for healthcare.  ROI is the production of value as compared to its economic cost.  Value is very definable in healthcare. “Value” is the patient health outcome achieved per healthcare dollar spent.

So more value is achieved when you get:

  1. Improved patient engagement,
  2. Improved patient experience and patient outcome, and
  3. Reduced aggregate cost of care.

How Do I Create ROI for Clients?

I have based my work in this area on Clayton Christensen (Jobs-to-be-done), Tim Brown (Customer Experience), Eric Reis (Minimum Viable Product), Alex Osterwalder (Business Model Innovation), Peter Senge (Co-creating Shared Vision), and Harvard Business Review (Decision Design).

I combine these premises with deep and varied healthcare experiences to deliver collaborative business modeling, decision driven organization design, and agile communication techniques to ensure that your great ideas have momentum, and meet the market ready to accelerate profitable growth for your company.

My operating premise related to creating ROI for clients is two-fold:

  1. Information about what markets, products and/or services NOT to pursue is valuable. And as such, the minimum cost in time and resources spent on obtaining that information is vital.
  2. Business Models cannot keep up with the rate of change brought on, and accelerated by consumer empowerment. As such companies must invest in R&D, innovation, or what ever you want to call it and in customer experience.


Within these guidelines, the search for new business models is in-and- of-itself valuable and often a good return on investment. Care must be take though, to lessen the cost and time commitment in finding and proving out new models – this is what I call The Drawing Room.

So I encourage and teach companies to validate ideas and advance them to the market in the fastest and most cost-efficient manner possible. I advocate for the “NO” in innovation – so many, perhaps most, ideas are appropriately killed or sidelined. Using the tools and techniques in “The Drawing Room,” I show you how to do it quickly and painlessly.

Once a good idea passes certain stage gates, it needs a real business plan to match its prototyped business model. Calculating the staging of expected return on investment in a collaborative fashion, and communicating it to all stakeholders is the second part of the equation. I have built many businesses and business lines for companies – so there is a lot of art and science I have discovered in getting everyone on the bus and then communicating pre-decided progress against goals in an effective way.

I hope this helps.

To your health,

The Team at imagine.GO


What Makes an ACO Work – Part 1

What Makes an ACO Work – Part 1

I decided to tackle the subject of innovation in healthcare financing, or how Innovative health plans are looking to disrupt their payment models. One reason I am focused on this subject is that healthcare reform while providing access to more consumers, does not address the underlying problem of year-after-year of escalating costs. Take Massachusetts for example, where all citizens can receive healthcare coverage – yet medical spend has continued to increase more than 7% year over year.


Rising Health CostsInnovative health plans are looking to disrupt their payment models.

To help control costs, payers and providers are increasingly agreeing to share risks by entering into innovative payment contract arrangements called Accountable Care Organizations, or ACOs. This concept is an important first step, and will produce a “first cut” of reduced healthcare costs as the incentives to practice only necessary medicine will be much stronger for all parties involved. However, to sustain the cost savings and produce a profitable and efficient healthcare system, payers and providers must invest in the enabling capabilities and experience framework that is necessary for parties to take a risk position and produce a “wins” for all stakeholders. The intent of ACOs is to move away from the traditional pay-for-service model to one that better aligns care with the holistic needs of the patient all within a more affordable cost structure.

WIKI defines ACOs as

“a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers forms an ACO, which then provides care to a group of patients. The ACO may use a range of payment models (capitation, fee-for-service with asymmetric or symmetric shared savings, etc.). The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided. “

The Centers for Medicare and Medicaid Services, or CMS defines an ACO as

“an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.”

By either definition, it boils down to Insurers and Providers agreeing on how to share risk and the cost that is associated with that risk. Make no mistake; this has to be as much about cost savings as it is about care. The math insists on it, and I am fine with that. Continuing the trend in the current healthcare cost model, which shows no signs of stopping, coupled with many requirements mandated by the Affordable Care Act, in all likelihood would bankrupt the system.

What Drives Our DebtFor example, based on the Affordable Care Act, an ACO must agree to manage all of the healthcare needs for a minimum of 5,000 Medicare beneficiaries for at least three years. If we apply the current model to this new payment structure, I advocate that participants cannot break-even, let alone produce a profit. To ensure that ACOs work, the entire healthcare system needs to commit to a new model.

This approach includes helping Providers create a better model of care that is defined by more than just cost, yet allows them to be in agreement with how they are compensated and how they practice medicine. It also must result in more patient access to care inside and outside of the actual doctor’s office. And finally, Plans and Providers must work together to create meaningful patient experiences that result in behavior change or all of this is for naught. All parties involved in an ACO must be aligned and coordinated in their incentives and transparent in their distribution of risk.

A framework for sustainable ACO enablement

But risk-sharing contracts in and of themselves are not enough. After that begins the hard part. For ACOs to last, unlike managed care in the 90’s, they will need a sustainable framework to achieve cost, quality, and patient experience. ACOs will only succeed if participating healthcare providers have the people, process, and technology they require to collaborate on care amongst themselves, and with patients.

My position can be summed up as follows:

  1. ACOs are necessary for a sustainable healthcare system
  2. ACOs start with good risk-sharing
  3. ACOs require investment in enabling capabilities for:
    1. Data collection and analysis (data analytics)
    2. Practice workflow management (care delivery)
    3. Patient engagement (consumption)

What is the role of informatics in ACOs?

At the heart of effective risk, control is an intense investment in informatics. Imagine a hedge fund with the same level of risk tools and insight as what payers and providers have now. ACOs need enhanced information systems to track patients, coupled with economists and physicians that can make sense of the data and use it to determine how to deliver more effective care. I will cover this in more detail in a future BLOG.

What does improved care delivery mean?

Improved care delivery is not just the view of the Health Plan in regards to “necessary medicine”. It also means the provider believes they are practicing better medicine, and most importantly the patient confirms it. This approach requires a patient-centered approach to care management that focuses on quality, cost & the patient experience. Plans might consider helping finance provider practices in regards to providing improved capabilities for delivery of care. I will cover this in more detail in a future BLOG.

Can you create a winning care consumption experience?

Think of this as patient relationship management. This statement means creating engagement models that use carrots and sticks to get members to comply with evidence-based protocols, and enrich ties with their provider. It means creating an experience that ensures the patient is ready to receive care and leaves the provider committed to a plan of action that is manageable and traceable. I will cover this in more detail in a future BLOG.

Who is Leading the ACO Effort?

Hospitals and ACOs

ACOs are primarily about care, so most of the efforts are being driven from the hospital side. But Insurance Plans realize they must also get into the game or be left to live with its outcomes – whether they are advantageous to the Plan or not.

Here is a well produced 5-minute video on the Arizona Connected Care, an ACO based in Tucson, Arizona that is comprised of for-profit and non-profit practices, a hospital system, and a government qualified health care facility. The video, while somewhat of a commercial for Optum, highlights how several disparate provider practices have come together to create a better care model that incorporates informatics, experience, and risk sharing.

The Arizona Connected Care program was awarded participation in the Medicare Shared Savings Program by CMS, which rewards ACOs that lower the rate of growth in health care costs for Medicare beneficiaries while meeting performance standards on quality of care.

Insurers, Hospitals, and ACOs

Hospital systems are not the only ones putting together ACOs. According to The Commonwealth Fund, the majority (56.3%) of hospitals participating or planning to participate in an ACO said they were actively pursuing ACO contracts with commercial payers, including self-insured employers.

In the opinion piece “The End of Health Insurance Companies”, Ezekial Emanuel argues that Insurers will be disintermediated from the healthcare system. Some people believe that he is on the right track. The smarter insurers see this possible outcome as well and are doing something about it – mainly in trying to partner with regional care providers and create ACOs of their own.

Here are some examples of Plans and their ACOs.

  • WellPoint acquired clinic operator CareMore for $800 million last summer to make the transition into the ACO business.
  • HMSA, the largest blue plan in Hawaii, launched a new PCP pay for performance program that is supported by a member engagement portal known as Cozeva.
  • UnitedHealthcare, part of UnitedHealth Group, owns Optum who has invested heavily in developing the informatics services needed to enable ACOs.
  • Aetna announced a partnership with Banner Health Network to provide technology that will support a health information exchange within an ACO.
  • Another source at Geisinger Health System relayed that this well-respected health system is exploring their ACO enablement model, which is focused on data analytics and interpretation and clinical redesign, to sell as a co-branded product or consultative practice.
  • GuideWell launched 4 ACOs in 2012, starting with an oncology partnership in Miami between its parent company, Baptist Health South Florida, and Advanced Medical Specialties (AMS).
  • In California, a plan under the blue umbrella is experimenting with a new health plan, called Blue Groove that offers members a personalized, coordinated and collaborative approach to healthcare coverage.

Blue-GrooveDo ACOs Mean Less Money for Providers?

It is still early in the “reform era”, and like all innovations, ACOs are receiving some mixed press. According to J. Thomas Rosch, the Federal Trade Commissioner, Accountable Care Organizations will likely lead to “higher costs and lower quality health care”. Avik Roy reports that Rosch notes that the Centers for Medicare and Medicaid Services (CMS) have been running an ACO pilot (Physician Group Practice Demonstration) for several years and that the “even after five years of the project, a majority of the participating practice groups did not achieve any cost savings.”

Statements like this have generated concern for many doctors and hospitals that are looking at ACOs as a way for insurers to reduce their risk at the expense, and subsequent revenue loss, of the providers. Does this mean that ACOs will lower the profits for providers? Not necessarily.

According to the Health Research and Educational Trust, Hospitals will certainly see a change in revenue mix. Looking at the potential for a 10.7% drop in fee-for-service revenue looks disconcerting at first glance. But keep in mind, this is not a matching drop in profit. It costs money to apply fee-for-services, which are also reduced from the equation as those unnecessary services are removed. But take a look at the plus shared savings – this is where ACOs can conceptually shine. By practicing better medicine, and less of it, hospitals can reduce their operating expenses and actually improve their bottom line at the same time.

Final Words

ACOs do not have to be HMO 2.0. Capitation has already been tried before – but without the informatics, care delivery changes, and experience improvements that I advocate are necessary to make an ACO work. This time around can be very different, and we are only at the beginning of this journey.

Our next blog will look at understanding the payment model spectrum.


To your health,

The Team at imagine.GO

Learn from Your Competition

Learn from Your Competition

What Can You Learn from Your Competition?

I will be giving the keynote at the Pre-Event Kickoff for Jacksonville Startup Weekend today and I am going to speak on a simple, but valuable concept – learning from your competitors. Last year at the Startup Weekend for North East Florida I was honored to give the keynote. I am proud to say that I am slated to give it again this year at the 2013 Startup Weekend on January 25th.

2013 Startup Weekend

Understanding of the Consumer’s Need of Your Product

This is obviously of the utmost importance. If you cannot clearly and simply identify your consumer, you do not have a product. I speak in great depth about this in other BLOG posts so I will not go into detail on it here. But I will refer you to the following blog posts for reference:

Understanding the Market’s Need of Your Product

At Last Year’s Startup Weekend I focused on how start-ups need to consider the larger market ecosystem surrounding their product. At the time, I was the Chief Innovation Officer for GuideWell and we were making plans to build our own start-up accelerator. We also had an active pipeline of ideas that we were watching the market for with the intent that we would make an informed build, buy, or ally decision on how to proceed.

During the discussion at Startup Weekend, I attempted to elevate the attendees thinking about their product so that they considered how it fit inside the prioritized needs of the existing marketplace. This is especially true in the healthcare space, where market entry is difficult and reliance on the existing infrastructure is of utmost importance. I asked them to consider if the product had viability to a large insurer like the one I worked for, and if so, would the best path forward be as a vendor or to outright sell it. I cautioned them that being a product vendor of a multi-billion dollar, highly-regulated company is high on the impossible side for a start-up, and could ultimately bankrupt them trying to get up to compliance with a long list of requirements and regulations. While this can be viewed as very unfortunate, it is nonetheless true.

Instead, I planted a seed for them to consider approaching large companies with the intent to sell their product and its IP in its current state. This form of exit strategy, I believe, will become more viable over the next several years. It allows the entrepreneur to acquire cash and most probably a retained contract to further develop it for the legacy company. Of course, that too comes with its’ own set of difficulties.

Understanding Your Competitors Position Against Your Product

Henry Ford
Henry Ford

I wanted to make some additional points on the need to have a greater understanding of the market and your product’s place in it. Today we will look at what we can learn from our competition. Here again, I advocate that if you cannot clearly and simply identify your competitors, you do not have a product. Even product category inventors like Ford and Apple have competitors.

Henry Ford, the inventor of the automobile, was once quoted as saying “If I had asked people what they wanted, they would have said faster horses.” While this may contradict the points I make around properly identifying your minimum viable product, at least it points to the fact that there is always some form of competition. I add to that the notion that you can learn a great deal from them.

My absolute favorite writing on this subject is from the blog of Marc Hedlund, the founder and CEO of the failed start-up Wesabe. His cautionary tale is entitled “Why Wesabe Lost to Mint .” Both Wesabe and Mint were/are online financial tools that puts the users’ bank accounts into one place, sets a budget, tracks their goals, etc. In 2009, Mint was acquired by Intuit (the makers of Quicken) for $170 million – not bad. Even with a year head start, users, press, and revenue – Wesabe lost to Mint and closed its doors forever. Why?


In his post, Hedlund bravely looks at the mistakes he made that led to being beat by Mint. In essence, he boils it down to Mint’s superior efforts in creating a simpler and more automated tool for consumers. Wesabe’s product features went deeper but required more user input and manipulation. Mint’s product features started at a much higher level but gave the appearance to the user of full automation. Hence, Mint was easier to use – so more people used it. By the way, since 2007 Mint has added all of those “deeper” features, and so much more. The lesson here is (in my opinion), it is better to win today with less, and add more tomorrow. This is the heart of the minimum viable concept model.

Hedlund and the team at Wesabe were mistaken in their interpretation of what their consumer’s minimum viable product actually was. They learned it by watching their competitor, but they learned it too late. Today’s start-ups must be nimble enough to quickly recognize market needs and pivot to ensure they always serve the customer best.

Final Words

So I ask all you entrepreneurs out there, particularly in the healthcare space, to take heed of my words and think extensively not only about who are your customers, but who your competitors are and what you can learn from them. You can see the deck I presented with here.

To your health,
The Team at imagine.GO


Speaking on ACO Enablement

Speaking on ACO Enablement

January 15-16, 2013 in Austin, TX

I will be giving a talk at the ACOs Summit in Austin, TX on January 16, 2013 starting at 8:55 am.  The program is “A framework for sustainable ACO enablement”. You can find more about it here.

ACOs Summit: A framework for sustainable ACO enablement

Insurers and Providers must first agree on how to share risk. After that collaboration begins the hard part. For ACOs to last, unlike managed care in the 90’s, they will need a sustainable framework to sustainable achieve of cost, quality, and patient experience.

In this session, you will learn about the essential ingredients in a value-based ACO framework that supports risk-sharing contracts long-term.

Key takeaways include:

  • Starting with a foundation of data and analytics
  • Ensuring care efficacy and evidence-based medicine
  • Improving care delivery and payment coordination
  • Creating a care consumption experience for patients/members

To your health,

The Team at imagine.GO


Retail Healthcare and its Implications for the Future of Health Insurance

Retail Healthcare and its Implications for the Future of Health Insurance

Join me as I give a talk on Retail Healthcare and its Implications for the Future of Health Insurance this Tuesday, January 8, 2013 from 2:00 PM – 3:15 PM EST.

Retail healthcare—from convenient care clinics in drugstores to the emerging insurance exchanges mandated by ObamaCare—has the potential to reshape the provider and payer markets in the U.S. Health plans are taking a leading position by investing in exchange technology, assisting members with price and quality information, and developing innovating networks that broader member access. This webinar will outline how you can best position your organization for success in the burgeoning retail healthcare sector.

What You Will Learn

Attend this webinar to:

  • Explore the origins and evolution of retail healthcare with an eye toward emerging trends that will impact your business.
  • Understand how retail healthcare coupled with consumerism can impact member behaviors—improving quality and cost.
  • Assess the impact of retail clinics on member access, costs and quality.
  • Formulate a retail healthcare strategy that encompasses market-based initiatives couples and reform-driven mandates.

To your health,
The Team at imagine.GO


New Webinar on Retail Health

New Webinar on Retail Health

Retail Health and the Future of Health Insurance

I invite you to attend a webinar I will present this week on The Implications of Retail Health and The Future of Health Insurance on Tuesday, January 8, 2013, from 2:00 PM – 3:15 PM ET.

Retail health— from convenient care clinics in drugstores to the emerging insurance exchanges mandated by healthcare reform—has the potential to reshape the provider and payer markets. Health plans are taking a position by investing in technology, assisting members with price and quality transparency, and developing innovative care networks that broaden member access.

This webinar, in brief, is about how consumer-directed healthcare empowers “shoppers” by providing them with information about price and treatment options so that they can pursue cost-saving opportunities. As a result, a growing number of managed care organizations are adding retail health stores and clinics within their networks. Consumers want convenience in their health care options, which is right in line with retail channels.

The Evolution of Retail Health

What You Will Learn

This webinar will outline how you can best position your organization for success via retail health.

  • We will explore the origins and evolution of retail healthcare with an eye toward emerging trends that will impact your business.
  • I hope to show you how retail health coupled with consumerism can impact member behaviors—improving quality and cost.
  • We will also look at the impact of retail clinics on member access, costs, and quality.
  • Finally, we will examine how plans might formulate a retail health strategy to encompass market-based initiatives coupled with reform-driven mandates.

I hope to see you there.

To your health,

The Team at imagine.GO


Here is the deck on SlideShare.

What Can Health Plans Learn from Retail?

What Can Health Plans Learn from Retail?

Podcast on Retail Health and Its Future

Listen to a podcast I gave where I discussed why health plans have a lot to learn from retailers. In this discussion, we cover many topics related to retail health, its evolution and its trajectory. We also discuss some upcoming talks I am giving.

What You Will Learn

  • This drive towards consumerism is spanning all industries – how are health plans reacting?
  • How can plans continue to attract and retain members in a competitive marketplace?
  • What are some of the key takeaways that attendees can look forward to this March?

Sketch Video

To your health

The Team at imagine.GO


Innovation Takes Excitement

Innovation Takes Excitement

A Visit to CAMLS

I believe that Innovation Takes Excitement and Collaboration, and Should Be Fun too. I made this decision based on a visit to a very innovative medical facility in Tampa, Florida.

In 2012, I had an opportunity to visit the Center For Advanced Medical Learning And Simulation (CAMLS). It was a rewarding experience and I was highly impressed at how much had been invested in innovation around both medical practices and collaboration. More than just a cutting edge surgery training facility, CAMLS the physical place – is designed to facilitate adult learning and team collaboration. The idea stemmed from coupling the USF medical department with the innovation department to create something new that allows for a disruptive way to teach new doctors about care, as well as help other healthcare partners to think differently about building medical devices.

Center For Advanced Medical Learning And Simulation (CAMLS)

According to their website, CAMLS is “a 90,000 square foot, state-of-the-art, three-story facility with every possible form of health professional education and training, for individuals and teams, under one roof. CAMLS integrates simulation technology, aviation science, team training, and evidence-based best practice into innovative programs with measurable outcomes.”

What Did I Learn?

The lessons I took about innovation from visiting this wonderful new facility are three fold.
1. Innovation takes (and creates) excitement,
2. Innovation takes collaboration, and
3. Innovation should be fun.

1. Innovation Takes Excitement

What struck me right off the bat was the level of excitement among the faculty at CAMLS – about the building itself, and the enterprise that they were engaged in.  Seeing that much focused excitement and commitment by the leaders of the organization gave me great hope that this enterprise was going to have sufficient staying power.

This is not always so with many of the innovation efforts I have seen. Often times, innovation is an afterthought to what is considered most important to a company’s core strategy. In as much, the work is assigned to existing team members who are led by the classic big company manager. This model almost always ensures that you will get mediocre results. It takes a lot of effort to sustain a disruptive innovation practice and most legacy managers do not have it. They are too concerned about their status, and do not want to rock the boat and truly push the envelope. This translates into a fear to take chances and a reluctance to push for innovation’s needs over and above the rest of the company’s wants.

2. Innovation Takes Collaboration

Next, innovation takes collaboration. The notion of the lone scientist thinking up how to change the world is really a fallacy. As discussed in the book Where Good Ideas Come From: The Natural History of Innovation, big ideas are really a series of smaller ideas coming together to form something that is meaningful to the market. Edison had a team of professionals working with him to determine the right size filament for his light bulb. CAMLS itself is a co-laboratory that brings multi-disciplinary thinkers together on a common problem. True to the concept of The Medici Effect: Breakthrough Insights at the Intersection of Ideas, Concepts, and Cultures, I was glad to see that CAMLS was designed to bring together scientists, doctors, academics, business people, and students to work on innovative medical ideas.I advocate that every company should have its own innovation space – a place to think and train on new methods like rapid prototyping. A place to have customers provide feedback on our products and services and a place that will fuel an organization’s movement to a more innovative system.If your current training facilities do not invoke/inspire interest and a spirit of learning – consider extending them to be part of the imagination space.

Think of it as a Library where you are allowed to talk, experiment, and interact on topics of importance to your company.  At CAMLS they treat their training as a means to have doctors and care providers walk thru the life of their patients. They use their simulation centers to teach how to deliver both good and bad results to a patient and video it to review in private. Here they extend what the doctor is learning beyond just medicine; they are teaching connectivity to humans in need.
But a word of caution on this idea – companies and the people that work for them change – what is needed today will be old hat tomorrow. If you are going to build your own innovation center – don’t pour it in concrete. Meaning, save room for new ideas and build it modularly so sections that are no longer relevant can be removed.

3. Innovation Should Be Fun

One last point I want to make is that innovation should have a strong dose of fun in its’ application. After all, what’s the point of changing things if you not changing them for the better. Nothing to add here specifically other than when you find yourself taking your innovation efforts too seriously – you may want to find something else to do.

In Summary

I believe CAMLS is set-up for success and I will be following them and watching their progress throughout the next couple of years. I invite you to do the same. Here is a quick video that I put together of what I saw.

To your health,

The Team at imagine.GO

Can an old dog learn new innovation tricks?

Can an old dog learn new innovation tricks?

Innovation at Microsoft

I had the opportunity to spend some time at Microsoft recently toting their new retail stores and their innovation center. They seem to have a laser focus on the consumer and their new product lines are exciting. Here is to the old dog learning new tricks.

Here is a quick video that I put together of what I saw. I was impressed to say the least.

To your health,

The Team at imagine.GO