Ecosystems Panels

Healthcare has always consisted of ecosystems (payers, providers, regulators), but few companies have tried to leverage it intentionally. Is there an opportunity to leverage these ecosystems more productively, and how does it differ from tradition?

• Claus: The answer lies in the nature of healthcare. In last 100 years, we’ve become much more capable. Capability means specialization, which has driven fragmentation. Players become categorized (payors specialize in certain products, providers specialize in conditions.) I spent two years working with MSKCC—highly specialized in dealing with cancer. 100 years of specialization and fragmentation has formed a highly complex scenario—ecosystems of providers and roles. As long as we become more capable, we will have specialization. Institutions need to answer the question: Is there a role to play to amplify the larger healthcare value? Take on the role of orchestrating and amplifying. I think this is happening because when we were forced to embrace a hybrid care model, some of the barriers broke. There is an oppty for a company to step up to be an amplifier instead of a disruptor. 
• Sukanya: The opportunity is to move the market and the industry from focus on sick care to improving people’s health. Moving from the break fix to working upstream—lifestyle and choices. Diet, exercise, drinking, prescribed medication, stress have a material impact (70% of the healthcare cost dollar.) We have the oppty to understand and influence behavioral motivational profiles of individuals and offer interventions to make healthier decisions. Oppty is going from US $3.5T market in primarily sick care to double the value around greater health. We have seen a lot of specialization. Clayton Christensen’s theory suggests that when industries are more nascent, they are more integrated, and as they become more sophisticated, they become more specialized. In healthcare, we’ve gone through the arc. We have a lot of sophistication and bifurcation. We are entering a new era, an inflection point where there is a desire to integrate and pull together. And many are angling to become the orchestrator.

What do companies need to change in order to be successful?

• Lieke: The main issue is the mindset. We can come up with rational structures, new products, business models—these are the external tangible assets of what is happening inside. We tend to ignore the inside in the greater goals we are trying to achieve. If we keep thinking linearly as we’ve always done, that we need to grow and do more, then we will always stay on the same track. We need to become aware of the forces that are driving us, the way we rate our employees, or nothing changes. You’ll keep coming with new deals but you’ll be trying to get a square peg to fit a round hole. It will never fit—trying to fit new solutions into your old system will always give you friction. We need a quest for more consciousness. We need a spiritual development—not religion, but letting go of traditional thought systems and conventions, returning to ourselves and reevaluating our relationships and environment. Only then can we emerge in a new way and really change. 

Teladoc has been successful in setting new standards and setting up new ventures to tackle healthcare. What has been the main challenge in changing that mindset?

• Claus: It really is a mindset shift; you have to redefine the problem. The problem so far has been becoming more capable, but the problem is changing. Now we have to do a better job of integration. Customers want a whole-person health experience. Not just about shifting from sick care to healthcare. That’s important, but it’s also about the whole person—primary care to chronic care management to mental health to any other specialty need. To an individual, that’s one problem. The whole premise for Teladoc Health is to solve that problem, to give people a different whole health experience. This requires a couple paradigm shifts:
  • 1) Acknowledge that care happens in different settings, physical and virtual. For some things, virtual is good and for others it’s not. 
  • 2) Whole person health means whole person orchestration. We need to make the system better, not replace it. You have to sell your value proposition three times if you want to be an amplifier—sell to payor part of the ecosystems, sell to provider part, sell to health consumer. Need the right value prop for payors, providers, consumers. If you look at every other industry that has successful ecosystem platforms, there isn’t one in healthcare because it’s more complicated. Need a fundamental shift in the thought model around the problem and how you go about solving it. 
  • If you actually want to deliver amplified whole person health, you need 5 sciences: 1) clinical 2) technology to reach people where they are 3) logistics in a really complicated ecosystem 4) behavioral 5) data science. We can’t address the problem without a multidisciplinary approach. 

Blue Cross Blue Shield has been trying to innovate for years as a traditional, legacy company. There is a lot of pain in transitioning—people need to change the way they operate and their learning curve. How has that experience been?

• Sukanya: We’ve been trying for a while and BCBS Massachusetts did drive a revolutionary change in the industry over a decade ago. Pioneered the alternative quality contract which shifted the payment model for providers from a fee-for-service to fee-for-value. That was a major shift. It has been successful but there is a lot more to be done to deliver whole value, holistic health (physical, mental, emotional, social, spiritual, financial all interdependent). BCBS Mass is trying to make a dent in the application of our work relative to eliminating health disparities—equity work. 
  • Example: Magnolia Model is a framework for understanding various levels of systemic bias that can influence a situation. We’ve made public commitments to how we deploy interventions using that lens– including paying providers. Change is hard for traditional incumbents, we can’t underestimate that. It can be powerful to tap into purpose to help overcome fear. Our org has rallied around equity. That makes it easier to talk about doing things differently. It’s about shifting to a growth mindset. If we want to grow the pie, we have to think about how we interact with others—not elbow them out but work together. That requires building trust and aligning on shared purpose and vision. Need to align incentives and trust, or it will be impossible to get things done. 

As an outsider looking across many companies, there is a huge shift from competition to collaboration. What other challenges and experiences have you faced?

• Lieke: FLOOW2 makes sharing marketplaces. We create digital environments that healthcare orgs use to create transparency of supply and demand for goods, services, and equipment to trade between each other or internally. We started in 2012, the circular economy was and is still very young. We’ve been on a mission of spreading the WHY it’s smarter to share and collaborate rather than the everyone for themselves mentality that we’ve inherited from the industrial age. Then the crisis in 2020 happened and it became so clear that everyone for themselves mentality has made us vulnerable. There were new demands on the system and they were not finding each other. Demand for an informal network—we created a nationwide platform for the Dutch healthcare system hospitals and long-term elderly and disability care (who weren’t included in government initiatives.) We created one platform that everyone can use. In a time of crisis, suddenly collaboration and transparency were the only solutions. Outside of crisis, it’s a beautiful vehicle to stimulate collaboration, reduce healthcare costs, and work more sustainably. 
  • For the current situation in the Ukraine, we are using our platform for help organizations advertise the things they need so we can ask hospitals if they have. Targeted aid to the right people to the right place. The value of collaborating and creating win-win situations is very effective.

COVID drove a lot of interest in new technologies to solve pandemic-related problems. How is that evolving as we move on from the pandemic? 

• Lieke: The pandemic has catalyzed that mindset change. When we launched the marketplace, the reaction was “How is this new? Why didn’t we have this five years ago?” You can imagine my frustration since we have been doing this for years. But I’m actually glad at this reaction because it shows that the mindset has come a long way. Now orgs are using it to save on procurement costs or they can do something with what they don’t use anymore. In the Netherlands, possibly in other countries, there are strict targets on reducing your CO2/carbon footprint so it helps orgs to prove what they are doing.

Moving onto management… there are so many areas to tackle and integrate. What is changing in the way traditional healthcare systems manage their operations?

• Claus: I’ll jump off from Sukanya’s comment about purpose. Purpose drives how you set up your operating model and how you think about managing your resources and relationships. Teladoc’s mission statement is to empower all people everywhere to live their healthiest lives by transforming the healthcare experience. It doesn’t say give everybody virtual care or replace the existing system. It says help people live their healthiest lives. If you start with that and then ask the question, “what do you have to do from a resource and management perspective?” you get to a different place than if you started with treating people. You get to answer the question, “what can I do to help people live their healthiest lives?” ~80% of healthcare outcomes are derived from primary care, chronic condition management, and mental health. This is a huge chunk of what needs to happen. If it was possible to deliver an integrated, holistic experience just among those 3, that would make a difference. Management systems change according to the problem you’re trying to solve. Our scope is based on those 3 systems. We have a 100-year-old problem and it’s time that we solve it together.

Purpose needs to be reflected in incentives, KPIs, and management. Blue Cross Blue Shield was a pioneer in this area—focusing on patient impact rather than traditional outcomes. How has that shifted management for the organization?

• Sukanya: When trying to do new things as an incumbent, you’re trying to sustain the way things have been done and simultaneously trying to find ways to do something really different, which often requires a different operating model. The challenge is to have both. The work that gets done in the traditional way of operating typically follows straightforward swim lanes. When we’re trying to do new things, we start talking about boundary-crossing, multifunctional teams. Discarding the old way of working. Currently, we have both—the old model to sustain ourselves to meet our members’ needs efficiently, and the new initiative that cuts across the org. We have to organize in a different way, incent in a different way.

What would you want your clients to change? You have a perspective of talking to so many players who are collaborating. What would make them more effective in using your collaboration tools?

• Lieke: Sharing interferes in the procurement process. The easiest way to buy things is through your own org’s ordering portal. We’ve seen some orgs make a new policy if they have an internal sharing marketplace. So, if you want to buy something, you have to first go check if a colleague or someone outside the organization has it. If they don’t, you can go through their regular process. 
  • Top-down usage also works, but it’s not my favorite. I prefer bottom-up when people use the platform and experience the advantage. For example, we have a platform pharmacists use to exchange medication that is approaching the expiration date. This is typically expensive medication that was ordered for a specific patient but now won’t be used. It sits on the shelf and eventually has to be discarded. The medication production process is the number 3 most hazardous ecological production process in healthcare. Saving medicine from unnecessary destruction is helpful. We started this but it’s actually illegal in Europe. We did it under the radar had huge success, saved 50,000 euro in six months. Then the mainstream awarded us a prize, and then realized it was actually illegal. But it got us a seat at the right table. We went through a 1.5 year process to change our process so that it falls in the “grey area” of the rules. Now we get responses that it’s easy to use—pharmacies do well and save 30-50% from the wholesale price. We’re crossing the corner of critical mass where the experience starts to spread.

Regulation can sometimes be a big constraint. What needs to change in the general approach to regulation? 

• Sukanya: In the last few years in the US we’ve actually seen positive transformations in healthcare regulation. For example, the data interoperability rules that emerged enable consumers to access their data and grant access to other 3^rd parties as they see fit. That unleashes a lot of potential in the marketplace, because the US has had an incredible amount of data silos, shrouded data. We’re at a point where there is enough recognition of the problem that there is pressure on the gov’t to solve. We would like to be able to preemptively address some of those issues before regulators prescribe a solution. Sometimes regulation can become very restrictive.

Teladoc has historically struggled with regulation by pushing and making an example of how regulation could change. What would you add?

• Claus: It comes back to the purpose. What is the purpose we’re trying to solve for? All regulation usually comes from a good heart. Sometimes it’s a little out of tune. The pandemic accelerated trends that probably would’ve happened anyway and regulation hasn’t caught up. We need to figure out what happens when emergency measures expire. Ex: There are state level rules in terms of what you can/cannot do with virtual care. We need the regulation to catch up to hybrid care. We need regulation that supports a “front door” to health needs—timely, convenient, effective for consumers and physicians and consumers. We make choices every day to give people the experience that actually makes a difference. We’ve been able to deliver mental health support in days, weeks to Eastern Europe during the current crisis.

What advice would you give to healthcare players for joining ecosystems?

• Lieke: Just give it a try. Stop coming up with reasons not to. Usually, it’s hiding behind conventions and fears. See how it works for you.
• Sukanya: It’s hard to bring out the crystal ball to see what’s going to be successful and what won’t. It requires trying things and learning from that. 
  • There are a few different factors critical for success 1) Addressing an underlying need and that the ecosystem can address multiple needs in a cohesive way, 2) Ensuring that your vision aligns with the ecosystem’s vision. Mindset, shared culture, governance, 3) Have the right incentives in place and understand the value levers for every party in the ecosystem. How does my piece fit in and reinforce? 4) How will you get to scale? One of the biggest challenges in healthcare right now. We have islands of innovation disconnected from each other. Most of the action is still happening on the mainland of large incumbents. What’s your strategy to get to scale quickly?
• Claus: Be really crisp about the problem you’re trying to solve—holistic, whole person health. Understand your part and what you contribute. Mindset: I’m not replacing healthcare; I’m making it better. And you need a road to scale, which always means working with other orgs. Scale requires collaboration, that we are trying to amplify and orchestrate each other.