Charting a Course for Value Innovation: Practical Tips for Adopting Blue Ocean Strategy in Your Practice

Transcription

1 Charting a Course for Value Innovation: Practical Tips for Adopting Blue Ocean Strategy in Your Practice

2 Today We re Gonna.. Explain Blue Ocean strategy and how it can be applied in a medical practice setting Demonstrate tools to employ the concepts of Blue Ocean strategy Identify innovative opportunities which transcend competition and add value to patients, referral sources, and payers Employ relevant aspects of Blue Ocean strategy into your own strategic planning framework

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4 Differentiating Goals, Strategies, and Tactics

5 A goal without a plan is just a wish Antoine de Saint-Exupery ( )

6 Strategies are Roadmaps To Help Us Reach Our Goals

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8 Tactics are Individual Plays

9 Tactics are the art of using troops to win a battle; strategy is the art of using battles to win wars. Carl von Clausewitz

10 What Exactly Is Strategy? A conscious and purposefully developed PLAN A PLOY to outmaneuver competition A PATTERN in a stream of actions (intended or not) A POSITION defined with respect to either competitors or markets; or A PERSPECTIVE (ie, a worldview) Mintzberg, H. (1987). The Strategy Concept 1: 5 Ps for Strategy. California Management Review 30(1) Fall:

11 So what is Blue Ocean Thinking? (And what makes is it strategic?)

12 Perhaps Best Described By What It s Not: A RED OCEAN Competing in the existing marketplace Fighting competition for existing demand Trading added value for cost saving And what do you find waiting in a Red Ocean marketplace?...

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14 Blue Ocean Thinking/Strategy At its core it is identifying what the customer/patient needs before they know they need it.

15 Blue Ocean Thinking/Strategy Making competition irrelevant by focusing in uncontested space Creating new demand through offerings not yet considered Differentiating through added value and efficiency of operations

16 Blue Ocean Thinking/Strategy Or put another way You can t ask customers what they want and then try to give it to them. By the time you get it built, they ll want something new Steve Jobs

17 Examples of Blue Ocean Companies

18 Examples of Blue Oceans in Health Care Creating interventions for conditions we didn t even know existed.

19 Paths to a Blue Ocean From Competing Within Industry Strategic Group Buyer Group Scope of product/service offering Functional-Emotional Orientation of the Industry Time To Competing Across The six conventional boundaries of competition Kim & Mauborgne

20 Six Principles of Blue Ocean Strategy Formulation Reconstruct Market Boundaries Focus on Big Picture Not just numbers Create Desire Beyond Existing Demand Set the Correct Strategic Sequence Execution Overcome Organizational Obstacles Build Execution Into Strategy Adapted from Kim & Mauborgne s Blue Ocean Strategy

21 Formulation

22 Show me the SWOT analysis Hint: There isn t one

23 Planning Strategy on a Canvas Strategy Canvas Diagnostic Tool Allows the development of a compelling picture Captures Current State of the Red Ocean Market Asks Where is competition investing? What are patients/ customers receiving for their $

24 YouTube Strategy Canvas YouTube not able to compete in the Red Ocean Blue Ocean where YouTube redefines market Source: annecastillo.hubpages.com, accessed 1/31/12

25 How do we create value in a Blue Ocean?

26 What is Health Care Value?* Defined as the health outcomes achieved per dollar spent It should define the framework for performance improvement in health care Rigorous, disciplined measurement and improvement of value is the best way to drive system progress In a well-functioning health care system, the creation of value for patients should determine the rewards for all other actors in the system It depends on results, and is measured by outcomes achieved, not volume of services delivered Shifting focus from volume to value is a central challenge. The process of care used, measurement, and improvement are important tactics but are not substitutes for measuring outcomes and costs Value encompasses efficiency * Porter, ME. (2010). What isvalue in Health Care? NEJM. Retrieved from 4/28/11.

27 Value-Based Purchasing CMS creating a link between payment and quality Health care value will be defined as demonstration of quality improvement Following a demonstration period Payment incentives and penalties will be assessed based on demonstration of value Acute Care program started 7/1/2011

28 Value Equation Quality Costs Value assumes a balance between Quality & Costs

29 Value Equation Optimal

30 Value Equation Unacceptable

31 Cost Health Care Value Matrix Unacceptable Realistic Goal is to perform on the right half of the matrix Sub Optimal Optimal Quality Feeley JHM 2010 Porter & Tiesburg 2006

32 Value Innovation In A Blue Ocean World Retail Consumer Focus The simultaneous pursuit of differentiation and low cost Focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space Value to buyers comes from the offering s utility minus its price, and because value to the company is generated from the offering s price minus its cost, value innovation is achieved only when the whole system of utility, price, and cost is aligned Patient Centered Focus The simultaneous pursuit of quality service delivery and maintenance of tight expense control Focuses on creating value-based partnerships with referrals sources that are mutually beneficial (ie, optimize CMS/payor incentives) Value to patients comes from minimizing uncertainty and focusing on their unique needs, while at the same time recognizing and meeting the needs of referral sites as they strive to meet their individual goals Adapted from Kim & Mauborgne s Blue Ocean Strategy

33 Innovation and Value Drive Each Other Value Innovation

34 Conceptual Framework for Innovation Eliminate Reduce COSTS Raise VI Value Innovation Create Adapted from Kim & Mauborgne s Blue Ocean Strategy VALUE

35 Important Considerations to Create Value The Four Frameworks Reduce What else can be reduced well below industry standards? Eliminate What do we take for granted that should be eliminated? VALUE Create What can be created that the industry doesn t offer? Adapted from Kim & Mauborgne s Blue Ocean Strategy Raise What can be raised well above the industry standards?

36 Value Creation Exercise Eliminate Create Reduce Raise

37 Marianjoy s Value Creation Exercise FY 2012

38 SLIDE NOT INCLUDED

39 Getting The Sequence Right Buyer Utility Patient Utility Is there EXCEPTIONAL utility for the buyer? Is there sufficient added value for the patient? Price Billable Charge Is your price accessible to the mass target of buyers? Cost Consumer Focused Patient Focused Will it cover added value offered? Cost Can you attain cost targets at the strategic price? Can economies of scale make it cost effective? Adoption Adoption What hurdles prevent you from actualizing the idea? What stands in your way (eg, logistics, regulations)? VIABLE IDEA VIABLE PATIENT OFFERING Adapted from Kim & Mauborgne s Blue Ocean Strategy

40 Buyer Utility Buyer Experience/Utility Map Buyer Experience Purchase Delivery Use Supplements Maintenance Disposal Customer Productivity Simplicity Convenience Risk Fun & Image Environmental Friendliness Adapted from Kim & Mauborgne s Blue Ocean Strategy

41 Buyer Utility Buyer Patient Experience/Utility Map Buyer Patient Experience Purchase (Referral) Delivery (Admission) Use (Stay/Visit) Supplements (Support/Ed) Maintenance (Ongoing Tx/ Outpt) Disposal (Discharge) Customer Productivity Simplicity Convenience Risk Fun & Image Environmental Friendliness Adapted from Kim & Mauborgne s Blue Ocean Strategy

42 What Do Patients See As Utility? (hint it s all about expectations)

43 qual i ty (kw l -t ) n. An inherent or distinguishing characteristic; a property. A personal trait, especially a character trait Essential character; nature Superiority of kind Degree or grade of excellence

44 Quality I am careful not to confuse excellence with perfection. Excellence, I can reach for; perfection is God's business. Michael J. Fox Actor, Activist (1961-)

45 IOM s Six Elements of Quality Care Safe Effective and reliable Patient centered Timely Efficient Equitable

46 CMS Mandated Quality Measures Acute* Foreign object retained after surgery Pressure ulcers Stage III and IV Falls and trauma Vascular catheter association infections Catheter associated urinary tract infections Manifestations of poor glycemic control Post Acute* Catheter associated urinary tract infections Pressure ulcers New or worsened 30-Day comprehensive all cause risk standardized readmission measure Others FIM Other infections Falls Etc. *Applied in FY 2014

47 ser vice (sûr v s) 1. n. 2. Employment in duties or work for another 3. The performance of work or duties for a superior or as a servant 4. Work done for others as an occupation or business 5. An act or a variety of work done for others, especially for pay 6. A facility providing the public with the use of something 7. Assistance; help 8. An act of assistance or benefit; a favor 9. Active devotion to God, as through good works or prayer. 10.A religious rite.

48 Service Sow good services; sweet remembrances will grow then. Madame de Stael French author ( )

49 CMS Mandated Patient Experience Measures Acute care measures (2013) Communication with nurses Communication with doctors Responsiveness of hospital staff Pain management Communication about medicines Cleanliness and quietness of hospital Discharge information Overall rating of hospital Outpatient measures anticipated in the future *HCAHPS Measures Applied in FY 2013

50 in no va tion ( n -v sh n) n. a creation (a new device or process) resulting from study and experimentation The act of introducing something new. Something newly introduced (the act of making) a change or a new arrangement etc the creation of something in the mind

51 Innovation Whenever you are asked if you can do a job, tell 'em, 'Certainly I can!' Then get busy and find out how to do it. Theodore Roosevelt 26th president of US ( )

52 Potential Innovations in Medical Care Delivery Bundled payments ACOs Medical Home In-home monitoring Tele/internet health

53 Execution Principles

54 Patient Experience and Referral Source Expectation Cycle Referral (purchase) Admission (delivery) Stay/Visit (use) Support/ Education (supplement) Ongoing Tx/ Outpatient (maintenance) Discharge (disposal) Quality Service Innovation What can we do to facilitate the process? How long is process? What are other industries doing that we can adopt or enhance? What red flags exist to help us redirect inappropriate referrals? How difficult is the admission process? What tools exist to streamline process? What can be done at admission to manage expectations for quality & service? What monitors of performance can we leverage? How can we ensure adherence to quality/ service protocols? Does the team have all the information and tools it needs? What other services are required to enhance the stay? Which departments need to interact in order to support patient or referral source? Can this activity be billed? What other levels of service are available to existing patients? How are external services linked to internal? What added value can be identified through ongoing support? How do we monitor or follow patient after discharge? What type of outreach should/can we have? What metrics can help us monitor performance after release? Adapted from Kim & Mauborgne s Blue Ocean Strategy

55 Patient Experience and Referral Source Expectation Cycle Referral (purchase) Admission (delivery) Stay (use) Support/ Education (supplement) Ongoing Tx/ Outpatient (maintenance) Discharge (disposal) Quality Service Innovation Adapted from Kim & Mauborgne s Blue Ocean Strategy

56 Building Execution Into Strategy Marianjoy s Patient Expectation and Referral Source Matrix

57 SLIDE NOT INCLUDE

58 SLIDE NOT INCLUDE

59 How Do We Overcome the Obstacles?

60 We Need to Address Key Questions Head On What do we need to do to: Break the status quo? Motivate key associates and leaders to move forward with change? Identify internal and external roadblocks to our progress throughout the year?

61 Marianjoy s Approach To Overcoming Hurdles Invited the Monday Morning Quarterbacks to participate Engaged them in the process up front Freed them up to speak Kicked the CEO out during the 4 Frameworks discussion Tied outcomes to their performance goals FIM Scores are on my scorecard Demonstrated progress early and often Quick kills were publicized as were challenges to status quo

62 Some Early Successes for Marianjoy Our Journey to Discharge program has maintained our high patient satisfaction 90 th + percentile of Press Ganey A new physician call schedule template was developed Resulting in less overall call for MDs while still meeting needs of referral partners New MD & RN electronic documentation platforms have been developed Rolled out in February of this year with outpatient electronic records to follow in a few months PI teams were established to address mandated quality measures and overall function improvement Early results demonstrate modest gains

63 What Should Your Next Steps Be? Buy the book It s a simple read I m getting nothing for saying that Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant W. Chan Kim, Renee Maubornge, Adapt the model to your practice It wasn t written for you, but it s flexible enough to work for you Chart your own Blue Ocean

64 What We Learned Probably best summed up by Arthur C. Clarke The only way of finding the limits of the possible is by going beyond them into the impossible.

65 Man cannot discover new oceans unless he has the courage to lose sight of the shore Andre Gide