I just attended Greystone.Net’s Healthcare Internet Conference in Las Vegas. It’s an excellent program covering a lot of territory from social media strategies to portal products and EMR integration.
In a couple of presentations, the speakers have been picking on various social media failures, and United Airlines has twice gotten mocked for its lack of social media prowess. (Note: I have no reason to defend United, though I flew them to Las Vegas and my flights out were just fine.) But listening to the presentations about United got me thinking about hospitals and airlines. And I find myself concluding that hospitals are more like airlines than most of us realize.
How? Take a look at two of the recent shifts made by United.
1) Price discrimination: United and many other carries have placed surcharges on various “extras” that used to be included in the price. Southwest Airlines likes to poke fun at the surcharges placed on checked luggage, for example – to great comic effect. But United and the other carriers are actually trying to provide numerous options for customers who value different things. Some customers want more legroom, and are willing to pay for it. Some want the luxury of not having to carry on suitcases, and are willing to pay for it. Some want food on the flight, and are willing to pay for it. It really is a major mindset shift. We were paying for all that stuff before; it was just hidden.. Now, we can opt-out, so to speak.
The anecdotal evidence I see is that most people choose to carry on their luggage and sit in the smaller seats. It’s not worth paying for, apparently. I wound up flying to Las Vegas on United because my primary buying criteria were schedule and price. United beat out the direct flight on Allegiant Airlines, and I couldn’t care less about legroom or luggage polices if the schedule is wrong or it’s substantially more expensive.
2) Coordinating complexity. I’m a CEO, so I read silly stuff that most rational people probably ignore, like the “Message from the CEO” letter in the front of United’s Hemispheres magazine. This month’s article was about their new relationship with Continental Airlines as part of the Star Alliance. It pointed out that their goal was to provide a single, coordinated experience across any partner airline, even across complex international travel itineraries.
At the end of the day, these two changes: 1) the ability to price discriminate and 2) their desire to coordinate complexity, points to the sea change happening in the airline industry. In my view, United perhaps doesn’t see itself as a fleet of bus drivers hurtling through the air at breakneck speeds in tin cans. And they’re not freight carriers, designed to move your suitcases to your destination. (In fact, I saw something about how United might be encouraging you to use FedEx to ship your luggage!). Nor are they chefs who are going to feed you (as if there aren’t dozens of restaurants in every major airport).
United seems to be positioning itself as an experience coordinator. They’re a logistics company. They organize schedules. The rest they outsource (FedEx) or charge extra for (legroom).
Healthcare faces similar challenges
Clayton Christiansen has written a book called The Innovator’s Prescription, which in my view essentially says healthcare is too complex to have everything under one roof and pretend that every healthcare organization can be everything to everyone.
For most hospitals today, having almost every service under every roof is just part of the deal, and the patient sees few, if any, direct cost impact of the hospital’s desire to be everything to everyone. And we wonder why the cost of healthcare is rising! Christiansen, rightly in my view, points out that this approach is not sustainable in the long term.
What patients really need is coordinators of care – organizations that can facilitate the complex transactions and movement of healthcare data from primary care doctors to specialists, and make it all feel seamless to the patient.
And to succeed, hospitals will have to partner for care with specialty hospitals and other organizations that do particular things especially well, rather than try to do everything themselves. This implies some very painful changes in healthcare delivery. The role of hospitals would presumably shift from providers of everything: heart and cancer and OB and a hotel-like private rooms and gourmet food kitchens and retail and Internet access providers – to one of coordinating the complex pieces. And perhaps the change will involve charging more for some of the specific services?
This happens to be precisely what’s behind the Patient Centered Medical Home movement. If hospitals don’t figure it out, someone else will. Perhaps a competitor. Perhaps an overseas medical tourism company. Perhaps the government.
I know the obvious rejoinder is: Oh my, healthcare should be run like the airlines?! What’s that guy in Iowa thinking? I’d argue back: healthcare already is run like an airline… an airline in 1980.
You should note that today you can make your airline reservations online in real time, check-in without talking to anyone via kiosks, and for a couple of hundred bucks, get almost anywhere in the US. You can be notified via text or automated messaging when your flight is delayed. You can coordinate trips across multiple airlines with multiple stops, with rental cars, hotels, tickets to events, all in one place.
Compared to most healthcare organizations, airlines are far more advanced in terms of delivering these kinds of capabilities to their customers. And still they’re having to make the shift to price discrimination and coordinating delivery of complex services. There’s more to this comparison than I think we’re willing to admit.