Lessons On Healthcare Disruption From The Strata Decision Summit

At the “Lift 19” Strata Decision Summit in Chicago, I had the opportunity to speak to an audience of more than 800 healthcare executives and industry experts.

Led by dynamic CEO Dan Michelson, Strata delivers cloud-based financial planning, analytics and performance optimization to 1,000 hospitals and more than 200 healthcare delivery systems in the U.S., including Advocate, Aurora Health Care, Cleveland Clinic, Intermountain, Kaiser Permanente, MD Anderson and Mercy Health.

In my conversations with Strata executives, I came away particularly impressed with the company’s work in the field of data science. Specifically, their ability to leverage machine learning to quickly normalize and analyze trillions of data points from across their customer network, which represents close to 25% of the spend in U.S. healthcare, to understand both the cost of care as well as where opportunities are to reduce waste. Given that close to 30% of everything done in healthcare is considered unnecessary, Strata is doing important work in helping to bend the cost curve.

On stage at Lift 19, I spoke to the power of technology to transform the American healthcare system, emphasizing:

1. The need for comprehensive electronic health records that ensure medical information is immediately available at every point of contact
2. How data analytics can save lives and improve performance
3. Opportunities to use video to make care more convenient, easy to access and more affordable
4. The future of artificial intelligence to augment care delivery.

I concluded my remarks by contrasting two future scenarios.

In the first scenario, I posit that healthcare’s biggest players will refuse to embrace change, opening the door to a trio of potential disruptors. They include:

1. Haven, the medical nonprofit led by the esteemed Dr. Atul Gawande, which was founded to provide medical care to the 1 million+ employees of Amazon, Berkshire Hathaway and JPMorgan Chase. Once these industry giants grasp the ins and outs of the U.S. healthcare system, I predict they’ll quickly turn their attention toward monetization.
2. Large, self-funded businesses, such as the Wisconsin company that has begun offering employees $5000 to have their total-joint surgeries performed in Mexico by a Mayo Clinic orthopedic surgeon. Or Walmart, which is now funneling its employees to high-volume centers of excellence for certain types of care. If big businesses band together and demand change, the delivery system would have no choice but to comply.
3. Offshore innovators like Dr. Devi Shetty, who’s building a 2,000-bed hospital in the Grand Cayman Islands that offers heart surgery at half the standard U.S. price with results that match the best in the world. This facility is located one hour by plane from Miami. If today’s purchasers can’t find affordable options on U.S. soil, they may just decide to outsource the work.

If this first scenario came true, healthcare’s biggest players—hospitals, doctors and insurance companies—would all get left behind.

The second scenario I presented involved all these parties embracing the need for change, before it’s too late. As difficult as it may be to right-size the healthcare workforce, drive productivity and weed out inefficiencies in the short run, these changes will create a superior model for medical care delivery—one that is built for the future.

Fulfilling this potential would require medical groups and hospitals to consolidate, not for market control and price jacking, but to improve the quality of care and lower prices. This scenario would require the industry to use of modern technology, data analytics and artificial intelligence to solve medical issues and lower costs, rather than as revenue generating approaches. And to achieve success, physicians and administrative leaders will need to work together to eliminate wasteful services, reduce medical errors and implement the most efficient and effective systems possible.

I left the Strata meeting optimistic that those in attendance will return to their organizations committed to fulfilling this second scenario. I’m confident Dan and his team will be at their side, eager to provide the information and services needed to turn this vision into reality.

Dr. Robert Pearl is the former CEO of The Permanente Medical Group, the nation’s largest physician group. He’s the bestselling author of “Mistreated: Why We Think We’re Getting Good Health Care–And Why We’re Usually Wrong” and a Stanford University professor. Follow him on Twitter @RobertPearlMD and sign up for his free monthly newsletter.