What is your business?
In 1901 the American Locomotive Company said it was in the train engine building business. Twenty years later, when more than 100 automobile manufacturers were battling for market presence in the United States, the American Locomotive Company was gone. In 1958 the Remington Rand Company said that it was in the typewriter business. By 1982 it was gone—swamped by the first computer word processing software, WordStar.
Peter DruckerPeter Drucker, the iconic business philosopher, asked a simple question of each client: What business are you in? Railroads, he said, are in the transportation business, not the train business. Typewriter companies are in the word processing business, not the machine business.
When homeowners buy their first house they typically take out a 30-year mortgage. What percentage of people actually stay in the same house 30 years? Almost none. On average, say statistics from the U.S. Census Bureau, Americans stay in the same house 4.7 years.
Finally, why is it that most money managers on Wall Street underperform the broader stock market while some guy in Omaha and a handful of other guys in places like Little Rock, Arkansas, or Claremont, California, pay practically zero attention to the vagaries of the Dow Jones Industrial Average and still outperform the stock market? As one of them said to me some years back, “All we want is a good 30-year investment.”
Funny thing about those 30-year investments. Like the 30-year mortgage, they have this tendency to transfer ownership 5–10 years down the road—usually at remarkable premiums.
So, average orthopedic surgeon, what is your business?If hospitals and surgeons in the United States can’t answer the question, “What is your business?” then they will become as relevant as Remington Rand.
So, average orthopedic surgeon, what is your business? Is it to become a coding expert? Is it to maximize diagnostic tests or procedures performed? Is it, in other words, to maximize your revenues? If you say, “Yes, we must maximize our revenues, ” then you probably will for a while. Some money managers, for example, who attempt to outguess the stock market succeed for a year or two. Maybe three. But for 10, 20 or 30 years? It has never happened and never will.
The business of surgeons is to repair patients. That’s the tangible output. (And surgeons have a powerful ally who does not charge an hourly fee—Mother Nature). The extent to which that output has become disconnected from costs is THE central issue pushing healthcare reform legislation through Congress.
The current system is deeply flawed and there is no assurance that the new system taking form in Washington will be better—it could be worse. Having MedPAC determine physician incomes, for example, is jarring and scary.
Where is the high ground in this debate? It lies with the patient. Efficient surgeons and hospitals are, ironically enough, deeply vulnerable in Washington today. Effective surgeons and hospitals are not. One of Peter Drucker’s most famous sayings is “Efficiency is about doing things right, effectiveness is doing the right things.”
Are train companies in the train business? Are typewriter companies in the click-clack business? Are stock investors in the stock market business? No. They are not. They are all in the solutions business.
Is the business of surgeons to perform abstract tasks on a computer screen? No. It is time, we think, for a philosophical manifesto aimed at tangible, old fashioned output. Nothing less, we believe, can cure this industry’s economic and spiritual woes. The torpor of insurance and Medicare paperwork is inevitably degenerative to the healing spirit.
Could we, in the midst of what increasingly appears to be wholesale revamping of healthcare delivery in the United States, be getting to a Call for Craft? Whoever centers their arguments around the fulfillment of patient outcomes will be, we expect, unassailable. In the lexicon of Wall Street, it’s getting back to looking for a good 30-year investment.
In medicine, what constitutes a good 30-year investment? It is, we suspect, tangible work that is straightforwardly useful. It is, we think, an exhortation to mindful patient care and seeing clearly or unselfishly the experience of being fully engaged and excellent—either personally or institutionally.
Could healthcare reform create the conditions for better, happier, more productive physicians? If, by productive, we mean better patient outcomes with more efficient diagnostic tests and procedures, then that is possible. Of course, the best way to predict the future is to create it.
Here are 15 aphorisms about the business of medical craftsmanship that lead in this direction and which we’d recommend to post on the wall, tattoo on your forearm or commit to memory (thanks and apologies to Peter Drucker):
- There is nothing as useless in medicine as doing efficiently that which should not be done at all.
- Innovation is the specific instrument of medical progress. It is the act that endows physicians with the capacity to repair patients more effectively AND efficiently.
- Medical product suppliers and especially manufacturers have market power because they have information about a product or a service—information that the physician does not and cannot have and does not need if the brand is trusted. This explains the profitability of brands.
- Few clinics that go digital to reduce the employment of clerks realize their expectations…instead they need more and more expensive clerks even though they call them “IT professionals.”
- Clinical management by objective works—if you know the objectives. Ninety percent of the time you don’t.
- Most of what regulators and payers call reporting consists of making it difficult for physicians and nurses to get their work done.
- Never mind your happiness; do your duty.
- No clinic or hospital can possibly survive if it needs geniuses or supermen to manage it. Clinics must be organized in such a way as to be able to get along under a leadership composed of average human beings.
- Physicians who don’t take risks generally make about two big mistakes a year. Physicians who do take risks generally make about two big mistakes a year.
- Clinic or hospital rank does not confer privilege or give power. It imposes responsibility.
- The computer is a moron.
- Medical knowledge has to be improved, challenged, and increased constantly, or it vanishes.
- Time is the scarcest resource and unless it is managed nothing else can be managed.
- A surgeon is responsible for the application and performance of knowledge.
- Checking the results of a clinical decision against its expectations shows surgeons what their strengths are, where they need to improve, and where they lack knowledge or information.
