I’m a big fan of Clayton Christensen. In fact, I just got done reading his latest book, How Will You Measure Your Life. I’m concerned, however, with how people might interpret his  opinion piece about Accountable Care Organizations (ACOs), recently published in The Wall Street Journal. Some might read it and think that ACOs are a complete waste or because success isn’t guaranteed, the new approach isn’t worth trying.

Some ACOs will fail, some will succeed

I agree with a lot of the challenges that Christensen points out. However, Pioneer ACOs were launched with the intent that they would start from a more advanced position than other providers and teach the industry what works and what doesn’t in moving to the next phase of technology application – not that they would all be 100% successful. The CMS Medicare Shared Saving Program and private payers wanted to find new ways to provide the same or better quality care at a lower cost. To do that, they provided some basic outlines and let innovators go try different things.

Christensen himself once said, “Innovation almost always is not successful the first time out.” The same is true in the healthcare industry. Some ACOs, or perhaps many, will fail. But some will also succeed. And that’s the point: to identify what works so others can learn and replicate it. (We already have several insights from ACO Pioneers.)

No guarantees of success in any industry

After I read this article I remembered an important lesson I learned early in my career as a consultant advising clients on marketing and growth strategy. Many clients would often challenge data analysis and conclusions, asking if there was “99% confidence.” The implication was that they only wanted to adopt a new strategy or program if they were 99% sure it would succeed.

A more experienced mentor of mine, now leading analytics work at Google, helped me and clients understand why that perspective was too restrictive. A business that is successful with 80% of its programs and investments is doing very well*. If businesses and leaders will only try new things when they’re 99% certain they’ll succeed, we’ll never get anywhere.

So, back to ACOs. Chistensen is right that a good portion of ACOs will likely fail. But that’s okay, and it shouldn’t stop people from trying. Because if a few do succeed — and it’s likely to be those that incorporate some of the things Christensen  mentions like pushing more care to low-cost venues — then we’ll have successful models to replicate.

Please don’t wait until you are 99% certain of success to try new innovative things.

What have you learned from the ACO journey, whether you are actively participating or are just interested in the future of healthcare?

*Note: I’m talking here about business strategies and investments, not patient care or clinical research. Higher thresholds and confidence obviously play a critical role when lives and patient well-being are at stake.

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About the author

Michael Loesel, director, strategic marketing, is responsible for managing and growing deep, productive relationships on behalf of Allscripts with industry analysts including The Advisory Board, Gartner, KLAS, IDC, and others. Michael also oversees market research functions, with the goal of delivering actionable insight to the organization. Michael’s team provides the market perspectives to senior management and the board in support of annual strategic planning. Prior to Allscripts, Michael worked at GE Healthcare and started its Analyst Relations function. Prior to joining GE Healthcare, Michael worked as a marketing strategy consultant helping clients such as SBC, Allstate, Whirlpool, and Grainger grow through marketing and innovation investments.

1 COMMENT on

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Greg says:

02/27/2013 at 12:59 pm

Hey Michael – I remember that conversation.

I found that the standard confidence levels for forecasting and decision making we were taught in school of 90, 95 and 99 drive us toward a conservatism that does not work in business. Most decisions are made on intuition alone so having data that proves you are more than likely reading the situation right is powerful. Even true at better than 50% confidence along with your instincts lead to better decisions and better outcomes.

Anyway – great to see a quote from a conversation a decade ago!

Greg Green

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