Analyzing the “Big Idea”: Extending the Success of the Marketplace Collaborative

An Interview with Robert Mecklenburg, MD, Center for Health Care Solutions, Virginia Mason Institute

In Harvard Business Review’s article “The Employer-Led Health Care Revolution,” coauthor Robert Mecklenburg, MD, describes his work with Intel to create a successful health care collaborative in metropolitan Portland, Oregon. In 2007, Dr. Mecklenburg encouraged Intel to lead market-based health care reform and provided Virginia Mason Institute’s clinical content and processes, known as Clinical Value Streams, to ensure that Intel’s efforts produced higher-quality, patient-centered care at a significantly lower cost. The outcomes were laudable: medical costs dramatically declined, patient satisfaction was high and patients returned to work faster. The results were so striking that Intel is now extending its work to benefit its employees outside Portland. Dr. Mecklenburg sees the Intel model as a road map and inspiration for numerous employers who want to rein in their costs and produce healthier employee populations.

Why is the HBR article important?

RM: First, it shows that the Healthcare Marketplace Collaborative model that Virginia Mason developed in 2005 can be scaled and transported to a different market, different provider groups, a different health plan and multiple employers, which is very exciting. It also shows that employers can drive market-based health care reform to purchase care of the highest quality for their employees, with high patient satisfaction at a much more affordable price. By effectively using their purchasing power, they can bring out the best in providers and health plans. For providers, this model can help lower their cost of production substantially while capturing market share.

The article further shows that Virginia Mason Institute’s clinical content and processes, our Clinical Value Streams, can be readily adopted outside of Virginia Mason by provider groups with different cultures and different organizational structures.

In the article, you discussed your role in the landmark health care transformation at Intel. What were the key components that made it work so well?

RM: The purchaser, Intel, agreed to use its purchasing power to manage its health care supply chain. To make it effective, I presented to Intel the five market-relevant quality indicators we had developed with Seattle employers that could be used as purchasing requirements. I also assisted Intel leaders in understanding the methods, process and structure of the Marketplace Collaborative model to ensure that providers would produce quality, employers would purchase quality, and health plans would pay for quality in health care.

Another key component was Intel’s use of Virginia Mason Institute’s standardized, evidence-based care pathways. This enabled diverse groups of providers to deliver very high-quality, affordable care, while ensuring high patient satisfaction.

Change management was crucial, too, in implementing a different approach to delivering and purchasing health care. It had to include clinicians in all three provider groups as well as Intel and Cigna leaders. It was essential to interact with a full range of personnel — from executives to frontline workers in the provider clinics — to explain how successful implementation of Clinical Value Streams requires application of the methods of change management, lean thinking, cost accounting and evidence-based medicine.

What lesson did you learn that would make this journey worthwhile for another top employer like Intel?

RM: I’d advise employers to manage their health care supply chain with the care they would for any goods or services they purchased. We’ve been showing employers how to work directly and productively with providers for more than 10 years.

What types of organization is this model suited for?

RM: This model is well suited for providers who wish to reduce their cost of producing health care while capturing market share with a high-quality product. It’s for employers who want higher quality and high employee satisfaction while reducing health care costs.

As a physician, what advice do you have to make this model appealing to physicians? Is this just another form of cookbook medicine?

RM: This approach has been appealing to physicians for a decade. The big pull for physicians is that they have the opportunity to apply their expertise and experience to create a more satisfying method of delivering health care. They have the opportunity to engage directly with their employer/customers and they learn effective tools to improve their financial performance. They also get home in time for dinner.

Do employer-led health care models produce healthier populations? If so, shouldn’t governments tap into these models?

RM: State governments are currently adopting elements of these models to create purchasing standards. As these states achieve sustainable health care costs and high employee satisfaction, more public sector purchasers may follow their lead. Producing best outcomes for patients nationally — even internationally — is why Virginia Mason Institute exists. It’s not theoretical anymore; the health care collaboratives are doing what they set out to do and stakeholders are seeing the results.

What’s your advice for a company that’s struggling with employee health care expenses right now?

RM: Do your research, come together as a team and follow the 7 Steps to Affordable Health Care: Using Purchasing Power to Drive Market-Based Reform.

To learn how to create better, faster, more affordable health care, see Virginia Mason Institute’s work on health care collaboratives and Clinical Value Streams.

Robert Mecklenburg, Medical Director, Center of Health Care Solutions at Virginia Mason Institute, has authored over 50 scientific articles and has been lead author on two studies published in the New England Journal of Medicine. He has studied the Toyota Production System in Japan and is a certified instructor in these methods. His work with employers on the production, payment and purchasing of quality in health care has been featured in The Wall Street Journal, Health Affairs, the Harvard Business Review and Institute of Medicine’s publication, The Healthcare Imperative: Lowering Costs and Improving Outcomes.

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