Digital Innovation

Funding Solutions, Not Vendors is the Key to Innovating Healthcare

April 17, 2018  |  Providence Digital Innovation Group

In our last piece we talked about the role of digital as powering a transformational strategy by always starting with a clearly articulated and well-quantified problem or opportunity area, then putting that problem through a digital problem solving cascade. In short, make sure you understand the problem, if it’s a “needle mover”, if you already own a solution, and if you don’t, find the “best of breed” vendor that is the best in the market in solving that problem. What often happens though, is that health systems don’t go through the digital problem solving cascade, and skip to the middle of the process by falling in love with solutions and vendors. They often don’t understand the problem, whether or not they already own a technology solution to that problem, or whether or not the vendor in front of them is “best of breed” based on a scan of the market.

Instead, they fund the vendor and don’t fund solving the problem.

Whether the vendor in front of them is best poised to address customer needs and solve the health system’s problems can be glossed over when a disciplined problem prioritization approach isn’t in place. Health systems often buy the solution offered by the vendor in front of them because it appears to be the most direct way to hit the organizations’high expectations on the financial stewardship, speed, and scale of impact. This thinking puts the organization on a path based upon a flawed assumption: the causes and effects of the problem are well understood at the outset. In reality, for each vendor, there are operational, business model, or technical challenges that must be tested and evaluated against customer needs through a discovery process.

What are the symptoms of funding a vendor?

Kleenex vs. Tissue vs. Runny Nose. When you start calling the project by the name of that vendor (SAP) vs. the class of problem (Supply Chain) vs. the actual problem (low inventory turns), there’s a pretty good chance you’re funding a vendor and not a problem. How many times have you talked about a project by referencing the lead vendor’s name? That’s music to a vendor’s ears. This means you’re starting to think more about them versus the problem you’re trying to solve.

Pilotitis. Another symptom of funding a vendor is ‘pilotitis’. This is when providers fall into a seemingly endless pilot phase with a given solution without transitioning to enterprise scaling and implementation. With ‘pilotitis’, there is no clear articulation of when a pilot is no longer a pilot, no establishment of KPIs or targets, and no plan/budget for implementing at scale taking into account the operational requirements and business model. Pilots go on indefinitely, ultimately either fizzling out or limping along at small scale without moving the needle on solving big organizational problems. This is bad for the customer and even worse for the vendor. This is poor stewardship in the context of limited and pressured health system resources.

So does this mean we should stop running pilots? In a way, yes. Pilots are an essential part of the process in searching for digital tools that solve our problems, demonstrating they work, and bringing them to scale throughout health systems. The problem is they’ve also gotten a reputation as a lack of commitment by the health system…we’ll “try it out” and see how it goes. What we should be doing is launching clearly articulated, time- and results-bound projects that have a plan in place for success and are based on needle moving problems or opportunities for the health system.

We should also think about vendors pilots no differently than a software development product team might using lean product development. In lean product development, one always starts with an MVP (minimum viable product). An MVP’s scope should be narrow enough to be resource friendly but broad enough to create enough “signal to noise” to determine if the solution will solve the basic problem as measured by a metric. After the initial MVP, the team works with the vendor iteratively and quickly to determine adjustments will need to be made to make the solution more effective and scalable. We also should always ask these questions: What is the MVP scope? What is the definition of done? What is the definition of success? How do we scale?

Blindness. Health system leaders have difficulty doing significant due diligence on the solution they are contemplating. As we discussed previously, going through the process of: 1) really understanding the problem and quantifying it 2) seeing if you already own the technology to solve that problem 3) then, and only then, going out into the market and looking for a “best of breed” solution to that problem is critical. Because of the lack of bandwidth health system leaders have, they typically skip these steps, misunderstand the problem and how big it is, don’t determine if they already have solution, and then start working with the vendor who first approached them. The lack of due diligence on the vendor is an important point. The vendor may be able to solve the problem but they may not have the best solution or they may not have a sustainable business long-term. The market scan of the vendor’s competition, their long term viability, etc. are crucial. At PSJH, we rely on a partnership between IS, Digital, Providence Ventures, and AVIA, our innovation partner, to help us find “best of breed” after we’ve exhausted the possibility that we already have solutions internally.

The Urban Legend. Some problems gain “urban legend” status because of a particularly striking anecdote. They actually may be problematic but may not be the next thing on the list in terms of the impact on the quadruple aim. We’re resourced constrained so we want to make sure we’re having the biggest positive impact possible when prioritizing problems and opportunities.

Dr. Amy Compton-Phillips, PSJH’s Chief Clinical Officer reminds us “no stories without data, and no data without stories.” This is sage advice. Her point is that stories without data may mislead you, they may be anecdotal or just wrong. However, the opposite is just as bad in health care. You can’t motivate people with charts and graphs alone; you need to make an emotional connection around the patient or caregiver impact of the data.

To be clear, this process can get into “analysis paralysis”. Ask the question, is this a “needle moving problem” from a quadruple aim standpoint. Don’t ask the question “Is this the most important problem we should be working on?” Answering that question is a lot more exhaustive, time intensive, and probably ultimately not answerable. I always try to make sure my team is working on “important needle moving problems” not “the most important problems.”

Finally, vendors have an interest in convincing you that the problem they are talking to you about is important and large. Because there are no shortage of problems in health care, they are probably right that the problem is material, but does it rise to “moving the needle” for the organization?

Low-Oxygen Environment. Often, when the vendor is being funded vs. funding solving the problem, the vendor receives the lion’s share of the funding for the project. They “suck all of the oxygen out of the room” and take up most of the resources. Rarely is it true that a technology solves the problem alone. Usually there are process redesigns, change management, etc. that go well beyond the technology. Fitting good technology onto a bad process is never a good plan. Enterprise sales people, however, are trained to determine the size of the budget for the customer’s project and to maximize their share of that budget. This may ultimately be self-defeating for the vendor but it’s just a fact that this is their incentive.

Creeping Scope. One way vendors “suck the oxygen out of the room” is by convincing customers to deploy new features or products that are orthogonal to the problem you’re trying to work on with the vendor. The new features may be incrementally free even, but the cost in distraction and complexity may be large. A lot of these features are driven by the vendor’s interest and not the health system’s priorities.

Ownership. All of the above symptoms lead to the most terrifying symptom. Loss of control over the project. The vendor or implementation consultant starts to own the project front to back. This should always be a partnership. It’s therefore important to put in guard rails, roles, and controls around the relationship and enforce them.

Most of the symptoms above are, to be clear, the health system’s fault, not the vendors. It’s a self-inflicted ailment. The vendor in all of these cases is following the path of least resistance to commercializing their product. It’s our responsibility as a health system to keep our focus on the problem.

Why is it so hard to fund a problem?

We don’t really understand the problem we’re solving. This is root cause to a lot of the issues around funding solving a problem vs. funding a vendor. We are at an information disadvantage when we start working with a vendor. The vendor, because they have (hopefully) solved the problem elsewhere, has such an information advantage that we rely too much on their knowledge and analysis. We should use vendors as partners to help us to further think through a problem. Ideally, we should have done plenty of analysis around the problem or opportunity before we’ve engaged the vendor.

We all have day jobs. Because health systems are focused on achieving the quadruple aim, which means dedicating resources to improving day-to-day patient care, an intangible notion of funding the solving of a longer-term problem is difficult to prioritize against the real-time care delivery challenges that systems are facing. This will become more pressing as resources become more constrained in the future. We also don’t have infinite resources and we have to make tradeoffs between what’s in front of us and solving longer term problems. Since most systems don’t have the breadth of resources to invest in everything they’d like, they must make difficult tradeoffs between what’s in front of them now and a discovery process for solving problems. So what are we doing to overcome this challenge and promote the digital problem solving process?

There are five main ways we are getting alignment within PSJH:

1.   Quantifying and prioritizing the value of problems and opportunity areas up front in terms of the impact to the quadruple aim. This attaches some tangibility to what we’re hoping to achieve by prioritizing solving problems or going after opportunities.

2.   Building business cases for the expected impact of solutions against size of problem. This is about matching the problem with the cost of the solution. This demonstrates the potential value we can get out of deploying different types of solutions and what the corresponding investment will be.

3.   Educating our system about the time and resources we ultimately save by investing in up-front testing / learning and carving out those resources.

4.   Being clear about problems we know are important but we’re not yet ready to work on and that are in our backlog. This is a very difficult part of leadership. That said, triaging the biggest problems first versus the pursuing the fiction of working on them all “a little” always delivers better results in the long term.

5.   If the problem/opportunity is large and complex enough, we may assign a “single-threaded leader” to it. This is a concept borrowed from Amazon and other tech companies. This is when the problem/opportunity is highly complex, hits multiple organizations, has many dependencies, will take greater than 12 months to resolve, and is critical to the organization. The “single-threaded leader” is someone fairly senior who’s only job is to go after this problem/opportunity. This is a big risk for the organization and the individual, so both need to be committed.

Misalignment with vendors. All technology vendors by definition are in the business to sell technology. There’s nothing wrong with that. The great tech companies, big and small, want to help their customers solve problems and build on those successes. The management teams from vendors I’ve been most impressed with have been ones who are focused on important problems and will be the first to turn down work that is outside of their core mission. Those are keepers. However, vendors, even the best, can intentionally or unintentionally distort the problem solving process. It’s important to keep an eye this and put into place objective guardrails.

It’s easy to slip into the trap of funding a vendor vs. funding solving a problem. It’s a hard discipline as an organization to develop but it will be absolutely necessary as resources in health care become scarcer, customers become more demanding, and change accelerates. Keeping an eye on the problem we’re solving, asking if the problem/opportunity a “needle mover”, and “what’s the definition of success” is key.