CHIME: Leavitt: Dispassion now drives healthcare decisions

SAN ANTONIO--Global economic dispassion is a force that has injected itself into the healthcare debate in a powerful way, said the Honorable Micheal O. Leavitt, founder and chairman of Leavitt Partners, former administrator of the Environmental Protection Agency and secretary of the U.S. Department of Health and Human Services and three-time elected governor of Utah, during his speech at CHIME11, the Fall CIO Forum.

“We have been at the doorstep of healthcare reform before,” Leavitt said. "Now, we are driven by a sense of global economic dispassion, rather than the passion that governed healthcare for the past several decades."

Leavitt also said that networks are an important aspect of the current system. “The world is reshaping itself to emulate a group of networked PCs. It now takes a network to survive.” This concept of networks is a new entry in this debate driven by global economic dispassion, he said.

Leavitt also foresees different types of service offerings and each healthcare entity has to decide which they are– taxi, limo or bus. Taxi is the current system, limo service is concierge care, and bus service is anything that drives greater integration and efficiency. “We will begin to differentiate not on the basis of quality but of convenience.”

Three competitive entries are now forming, Leavitt said. The market is in the process of determining who is the general contractor because there isn’t one right now. One entry is multispecialty practices which view themselves as having the important asset of patient control and can control how spending takes place. The second entry is hospitals which have the incumbent position, a big brand, and generally have access to capital. Hospitals don’t have a lot of patient control and don’t know how to manage risk or how to aggregate lives. The third entry is insurers which have a brand, can manage lives and risk, but don’t have patient control. All are incomplete on their own but physicians and payors are saying that together, they come close to a complete package. “It’s a scramble for who can commoditize and who will become the general contractor.”

Leavitt admitted that switching from passion to dispassion is a difficult adjustment. And, “a big part of the transition is how long it will take. One year or 10?”

Forces at play now are strong enough to demand changes in delivery models. “Innovation has been the hallmark of U.S. healthcare whether it’s a new molecule, new device or new protocol,” said Leavitt. “I would argue that we’re entering a new era of innovation where we’re developing a new category which is all about finding value. The future will belong to people who have learned to innovate in that space.”

Those who can demonstrate the value of new innovation will succeed, he said, and others will be a victim of global economic dispassion. A high collaborative IQ will be vital to that success.

“This is real change, not rhetoric,” Leavitt said. “If we want to remain a great nation, we have to accomplish this change. Our choices are to fight it and die; accept it and have a chance to survive; or lead it and prosper. Position yourself to become an innovator.”