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What do the Ford Model T, retail clinics, and MACRA have in common?

Albert Einstein was once quoted as saying that the definition of insanity is doing the same thing over and over and expecting different results. The principles of innovation also tell us that doing the same things the same way will produce the same outcomes.

Today, many in health care are seeking ways to improve quality and lower the overall cost of chronic care, which makes up a whopping 86 percent of health care spending in the US.1 Moreover, research suggests that as much as 29 percent of the current costs for chronic care in the US could even be avoided.2 Many have tried to remedy this situation. But, most have tried the same tactics over and over, expecting old habits to lead to new breakthroughs.

How might this cycle be broken? Convergence and collaboration could be the innovation principles that, when applied to health care, could create more value for less cost and complexity.

Henry Ford invented neither the automobile nor the concept of an assembly line. Yes, there were many car manufacturers in operation when he started the Ford Motor Company. But, his competition produced cars that only the very rich could afford. By using convergence and collaboration, Henry Ford made the automobile affordable ($825 in 1908) for the masses.3

Ford borrowed from the meat packing industry. He perfected the assembly line by standardizing the process through simplicity, quality controls, integration of the suppliers, and rigid discipline to reduce unplanned variations. This convergence of different elements dramatically lowered production costs. He created “more-for-less-innovation,” which enabled him to serve a larger market. So large a market, that unlike the other competitors, Ford needed a way to reach his customers. This need spurred a new business collaboration between the Ford Motor Company and local car dealers who would sell and service the Model T and promote automobile ownership. The Model T was a successful automobile for almost 20 years and ranked in the top ten for the most cars sold at the time at 16.5 million.

Borrowing from lessons Ford learned in convergence and collaboration, today there exists an example of this in health care that could create more for less, specifically when it comes to serving the needs of people with chronic conditions: Retail clinics.

Historically, retail clinics have not been viewed as a valuable partner to health systems or primary care physicians. In a fee-for-service system, the loss of revenue and patient continuity is a barrier to collaboration.

But, findings from our recent research, “Beyond the acute episode: Can retail clinics create value in chronic care?” suggest that this emerging trend is an example of collaboration that could benefit patients and health care providers alike.

In a “fee-for-value” payment model, retails clinics offer greater access and convenience to patients in a lower-cost setting. These settings can also create an opportunity for health systems and primary care physicians to lower the overall cost of caring for their patients and improve treatment adherence and quality. And, the elements of success can be leveraged to deliver more for less. Examples include:
• Well-defined clinical protocols
• Sharing of clinical data
• More frequent patient touchpoints
• Greater opportunities for patient engagement
• Analytical tools to provide deeper insights into patients’ behavior and medication adherence
• Convenient locations and hours

This model can work effectively with many types of chronic diseases, including diabetes, high cholesterol, hypertension, and asthma. Once the partnership operating model is in place, many more chronic care programs could be added.

Of course, collaboration of this nature cannot work effectively unless there is a mutual commitment to work together to prioritize data sharing, measurement and alignment around patient outcomes, and leveraging each other’s strengths.

Henry Ford was a disruptive innovator whose Model T may not have been as fancy or powerful an automobile as his competitors’ models. But, he perfected his innovation to break the existing constraints and create a lower-priced, but good enough, car to become the market leader. In the realm of health care, many retail clinics have successfully managed to make minor acute health episodes more convenient and lower cost.

With changing consumer expectations, growing out-of-pocket costs, and an aging population, the chronic care model could be the next natural step in the evolution of retail clinics. In the fee-for-service model this might have been viewed as a disruptive force. But, with the Medicare and CHIP Reauthorization Act of 2015 (MACRA), health care providers now have an incentive to find ways to improve quality and lower overall cost of chronic care treatments. Now, through the growing focus around resource use, quality, and advancing care information, the retail clinic can be an innovation though convergence and collaboration.

Sources:
Centers for Disease Control and Prevention, “Chronic diseases: The leading causes of death and disability in the United States,” http://www.cdc.gov/chronicdisease/overview/index.htm, accessed September 28, 2016.
2 Francois de Brantes, Amita Rastogi, and Michael Painter, “Reducing potentially avoidable complications in patients with chronic diseases,” Health Services Research 45, no. 6 part 2 (2010), DOI:10.1111/j.1475-6773.2010.01136.x; Kathryn Fitch, Bruce S. Pyenson, and Kosuke Iwasaki, “Medical claim cost impact of improved diabetes control for Medicare and commercially insured patients with type 2 diabetes,” Journal of Managed Care and Specialty Pharmacy 19, no. 8 (2013)
3 History.com, “1908: Ford Motor Company unveils the Model T”

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Author bio

Bill Copeland, Vice Chairman of Deloitte LLP, is a 27-year Deloitte veteran and leads the US Life Sciences & Health Care Practice. Previously, Bill was practice leader for the health reform initiative, focused on serving clients’ needs around the incredible changes resulting from the Affordable Care Act. He was also National Managing Director of our Life Sciences & Health Care Industry Consulting Practice and managed the Health Plans Consulting Practice.