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‘Resistance is futile. Death is irrelevant.’

OK, so it’s a geeky reference. Indulge me and I’ll get to the title in a minute.
By Dr. David C. Pate, News and Community
March 13, 2012

I’ve asked St. Luke’s Health System Chief Transformation Officer Tony Tomazic to share his experience and thoughts about organizational change. His perspective is presented here. I’ve introduced Tony in a previous post, and you’ll be hearing more from him and other members of our executive team as our journey of transformation continues. 

If philosopher Nate Branden was right to suggest that “the higher the level of self-esteem, the more likely one will be to treat others with respect, kindness, and generosity,” then Boise is chock full of exemplary self-confidence! Everyone has been warm, open, and generous to me. Sincerely nice people have ensured that my relocation from Kentucky has been painless and even pleasant. 

Still, the region is as new to me as it is to my family. The work environment is somewhat new; I came from the for-profit, big health insurance space. The company I worked for, Humana Inc., is a leader in thinking differently about the health care industry. As such, it instituted its Innovation Center, led by a chief innovation officer, in 2000. 

Conservative as the industry is, it’s hard to believe that the organization was willing to make that kind of commitment back then, but it did. The CEO believed in disruptive and positive change, and he expressed that intention to the enterprise by establishing a role and a department committed to that kind of change. The department is doing a good job and the strategy continues to work for them.

I left my role as director of consumer innovation with the center in November and started working at St. Luke’s as the new chief transformation officer. While I was in my prior role, the function of our department was to act as a business catalyst, to infuse core business with new thinking, new ideas, and new products. We sought to establish understanding and relationships with consumers in genuine and meaningful ways. The real test came in how we delivered value to consumers and to our business.  It wasn’t easy, but we did.

The center’s programs built a leading reputation for Humana, but also bespoke true value for consumers of health care. Big surprise: People don’t care about their health insurance brand. 

Perhaps more accurately, people care about their health, not their health insurance. That insight led us to consider what “health,” or “healthy,” really means to consumers. We decided it means “being able to do the things you already like to do.” That is, when you get to enjoy your life, you’re healthier.  

This opened the door to whole new business models and services for Humana, and paved the way for the organization’s strategic approach to deliver “lifelong well-being” to consumers. Well-being, in this case, meant products and services that render health, physical and emotional; security, personal and financial; belonging, identity and relationships; and purpose, the things you do for their own reward. The catalyzing character of the Innovation Center at Humana evolved over 11 years, and when I left, the institutional knowledge and practice was well-seasoned and highly adaptive.

At St. Luke’s, the world of innovation practice is brand new. There’s no army of innovation specialists, trained consultants, or annualized budget. When I arrived, I was an evangelizing staff of one. That internal champion role calls for lots of discussion with as many stakeholders as are willing to share their expectations for the future. 

Some conversations have been inspired with momentum and vision, but in many cases, folks have been confused. They wonder about this new transformation that the System is calling for, why we need something like that, and what exactly am I going to transform, anyway? 

That’s neither surprising nor unwelcome. I like being challenged, and I enjoy getting a new perspective on my intentions. At the same time, it has become clear to me that, while in some places in the System we recognize a need for dramatic change, other areas don’t see change as an imperative. 

This is a common challenge for successful businesses. What’s more, it’s human nature. As a species, we are inherently adaptive and effective in problem-solving. But we thrive on stability. That’s when growth occurs. It is our responsiveness to change that ensures our survival, but our ability to maximize returns from an ecosystem that makes us robust. 

The most successful businesses have licked the problem, addressed the challenge, beaten the competition, and have the “right” answer; there’s no need to question their approach, because it’s already the best. This position is also what makes the most successful businesses complacent, and results in a very short list of Fortune 500 businesses that have survived more than 50 years. This is the innovation imperative.

St. Luke’s Health System made a great move in bringing in Dr. Pate. Not only does he recognize the need for institutional change, he also sees the stormy horizon of health care. 

And now, with all apologies to Gene Roddenberry, we’re beginning to address the title of my blog post.  What’s about to happen to the industry is a radical shift in the care delivery model, the revenue model, and the way industry participants conduct business with one another. It’s a major paradigm shift in our country, and it’s going to impact every single American. Our CEO is calling for a proactive posture in the context of this change, instead of a reactive one. The change is coming, resist it though you may. And either way, the change will continue to drive forward.

“Now, just hold on,” you say. “You mean to tell me that the entire health care ecosystem will suddenly shift on Jan. 1, 2014?” 

No. That’s not what will happen. But the system will change, and the final scope and impact of that change will be tidal. To ensure we thrive in this new ecosystem and competently deliver on our mission, we need to be proactive, lead the wave, and surf above the churn.

What’s needed? 

Aha! Transformation.

Dr. Pate was kind enough not to endow me with direct responsibility for all the transformation that we need to undertake. Thank you, Dr. Pate! Instead, he asked that I engage leaders in the System in a personal mission of collaborative and positive disruption, infuse our work with a consumer ethos, and champion consumer interests. I also have the privilege of heading up our marketing and public relations teams, where a consumer focus can have a profound effect when it comes to our internal identity as well as our brand image and perception.

I see transformational needs in three main areas. 

First, in the “systemization” of St. Luke’s. St. Luke’s has served the community for more than a hundred years. Its brand and identity are deeply embedded in the community, and represent sincere and honorable value to Idaho residents. 

Throughout the first century of service, community needs were met by incremental growth and the expansion of disparate and independent facilities across the region. It is only in the past decade, and arguably, the past five years, that the identity of St. Luke’s has been challenged. The scalability and efficiencies gained as a result of “systemization” are obvious, and include reduced costs through the reduction of redundant support services, technology and infrastructure, standardization, etc. The challenge is a cultural one. Shifting from an affiliated network model to a single System requires a new mindset. I see culture change as a great opportunity to positively transform the System.

Second is the challenge posed by the title of this post. Industry transformation is profound and inevitable. Our ability to wrest a successful outcome from a vague and volatile future depends on our capacity to embrace transformative change in our business model, not shelter behind and reinforce a vulnerable position. 

The implications of the new model will touch all aspects of the System. In this new model, the consumer can be empowered and satisfied through our progress toward the Triple Aim: better health, better care, and lower cost. Solutions that deliver accessibility, security, flexibility, quality, transparency, and personalization will ultimately differentiate the experience of the consumer and enable our success.

Finally, we have an opportunity to capitalize on a generational consumer transformation and evolve our business at the same time. This third transformation is already under way, and I’m sure some reading this post are actively engaged in this change. 

I propose that many of us today would sooner take the advice of 100 untrained strangers than the voice of a single expert. If, for example, you were preparing to purchase a bicycle for your 7-year-old son on his birthday, as I did recently, and wanted to make a selection on Amazon.com, you’d rather evaluate based on strangers’ experience with the product than the manufacturer’s expert opinion. 

Increasingly, our interpretation devalues the expert opinion, because we think they have something to gain. We perceive more accuracy in the public assessment because the public has nothing to gain or lose by being transparent. 

This is the key to the power behind social media, and the heart of our cultural will to adopt and use it. It isn’t the emergence of social media tools that’s profound, but rather, the radical change in consumer perception and value creation that comes from the use of these tools. The use of health care and consumer perceptions of value, quality, security, and transparency will all rely on this emerging mindset, and St. Luke’s needs to be part of that transformation along with them.

My work is only just getting started, and I offer my appreciation for the opportunity to make my introduction to the St. Luke’s family in this way. I hope to get the chance to contribute another post on our transformational efforts in the near future. 

In the meantime, I’d welcome your thoughts and opinions on how best to go about positive disruption on behalf of our patients and our consumers. I promise to respond to comments through this blog. I’m a fan of the Japanese approach of “genchi genbutsu,” “go and see,” that to fully grasp the situation, you need to see for yourself. To do that, we need guides to lead us to the right places. 

Where do you want to positively transform?

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.