Turning the Titanic

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Preserver

How to stay afloat in today’s health care industry.

By Michael Eisenhart, PT

Most people know the grim story of the Titanic. Whether or not you prefer the love story version with Leonardo DiCaprio may say a lot about your choice of movies but does not change the end result—a slow horrific demise of a “modern” marvel.

Perhaps it is not a leap to liken the U.S. health care industry to the infamous ship. Both were massive: The Titanic was 833 feet long, weighing 50,000 tons, and the health care industry costs almost three trillion dollars per year, representing more than 17 percent of the Gross Domestic Product. Both were technologically advanced. The Titanic had communications equipment and a massive control panel. And today’s health care has magnetic resonance imaging for seemingly every ache or injury, is spending billions of dollars developing devices that prolong life, and offers drugs that promise to tune chemistry to the unique needs of our genetics. However, both have proven to be slow moving and hard to turn, even when an iceberg lies ahead.

So if you could go back in time with the mission of changing the fate of those aboard the Titanic, how would you do it? Solve that riddle and you might just be able to turn the Titanic we all seem to be cruising on as well.

One theory is to band together to build bigger, more solidly crafted lifeboats. This way, if the folks at the helm do not turn in time, you and your friends can avoid the icy waters and survive the crash. Although this strategy sacrifices the ship itself, it seems plausible and many in our industry appear to be moving in that direction. Medical practices are consolidating, hospitals are buying everything their credit-feeds allow, and practice owners are either checking out entirely (hopefully not opting for the Hindenburg line instead) or defining what their “job” in the new vessel will be. Yet many physical therapy practice owners, especially those with smaller operations, are being left out of these discussions, making this theory less likely to be a winner for all.

A second theory is to pack more life vests or in more common business-owner parlance, to “diversify revenue streams.” Similar to the first theory, this strategy acknowledges that the ship is likely to sink, but greatly increases the odds of survival for those without a lifeboat. It is not uncommon, for example, to hear practice owners talking about the latest and greatest revenue builder that they expect to add buoyancy to their bottom line. Perhaps this includes adding a new technology (e.g., equipment or new technique) or ancillary services that can be provided by a lesser professional group such as massage, personal training, or wellness, related services within their walls. Again, this theory is plausible but perhaps not strong. Although there is hope that this new thing will outpace and eventually eclipse the current thing, the demands of running the existing business are intense. Pushing fundamental change to the “when I have time” category for many owners, a second full-time job for those not otherwise involved in service delivery, and a third for the owner who still delivers clinical care: Working “in” and “on” the (existing) business1 while building a platform for the new business is a heavy lift for even the most committed entrepreneur. This second theory, although no formal reference I know of, appears to be a common, but still less than ideal, approach. Beyond the workload required and the difficulty reconciling it with such (now) conventional wisdom as Jim Collins’s “Hedgehog Concept,”2 it seems, for a profession that is so deeply entrenched in not allowing itself to be “owned” (in both the literal and profit generation sense) by others, actively seeking out profits using similar tactics may be a violation of integrity. Thankfully, this appears to be an obstacle that the Private Practice Section (PPS) is poised to address with its emphasis on acceptable business models.

A third theory, which is rooted in disruptive innovation, fueled by entrepreneurial passion and cloaked in unrelenting hard work, is to get the behemoth to turn; to prevent impact and change the current course. Now this is not for the faint of heart. Admittedly, the theory hinges on something that sounds more idealistic than realistic, with a timeline that seems impossibly long. Undoubtedly, that sentence alone will scare the vast majority away from even trying. Yet the stories of low-end disruptors, companies who attacked from the bottom after cracking the code on how to deliver “good enough” results at a lower price while catering to the largely ignored bottom of the market, can easily be found.

These companies applied lessons learned at the bottom to begin climbing the market-segment ladder, gaining momentum (and eventual market dominance) along the way. Perhaps the most famous of such stories is Toyota, the Japanese carmaker who started with a largely ignored model called the Corona and then moved up and eventually over General Motors, Ford, and Chrysler, the big players of the day, as it introduced higher quality, larger, and more profitable models to its lineup. Autos of course are not the only example of an industry disrupted. From steel manufacturing (using mini-mills like those of Nucor) to low-cost airlines (e.g., Southwest), examples are easily found. Despite critics of the theory,3 proponents of Clay Christensen’s disruptive innovation model point to fairly strong evidence, in some cases thousands of blind tests and billions of dollars exchanged, that it withstands scrutiny.4

So if other big, lumbering industries such as autos, steel, and airlines can get disrupted, what about health care? Could a lower cost provider figure out how to deliver a “good enough” product to the mass market to displace the larger, well-heeled players that are focusing on higher margin items like drugs, devices, and advanced technologies?

In short, the answer is yes and many experts on the subject are counting on it. However, there are major hurdles that must be overcome: standardization (experience, message, cost, etc.) to drive simplicity, transparency to drive trust, a strong emphasis on quality with process improvement, and, perhaps above all else, the will to enforce an adapt-or-die mindset—high hurdles that as a profession we may not be ready to get over.

However, if we believe that health, as the World Health Organization (WHO) stated so eloquently in 1946,5 “is not just the absence of disease” but is rather “the feeling of total well-being on the physical, mental, social, and spiritual levels of a person’s life” then we have a powerful reason, and perhaps even an obligation to try.

To those who attended the 2014 PPS annual conference in Colorado Springs and especially those who attended the educational session I was a part of with C. Jason Richardson and Jerry Durham, thank you for the amazing response to the idea. Whether evidenced through the attendance in the room or by the tweets using the #disruPT hashtag, a far greater response than in December 2013 when I first tried adding it to the conversation, your willingness to embrace the ideas and put your energy behind them is uplifting. It makes the existence of a group within the profession that is ready for a next step abundantly clear and confirms that the idea of “transforming society” is one we are not afraid of. Clearly, however, there is more to tackle than can be done in a 90-minute session; only the start of what I hope will be a lasting and meaningful conversation. Conversation drives belief, which drives us to take action…and action, when delivered consistently over time, is what results are made of.

Take a break from building lifeboats or packing vests if you can. Push the #disruPT conversation forward with your colleagues, member and nonmember alike, as well as your friends and family. Play an active role in answering the fundamental question in front of us, “How can we influence the movement habits of the maximum number of people at the lowest possible price?” It will not be easy to solve, but it will be worth it because when we do solve it, we can help ease the burden, in both cost and quality of life, of the chronic diseases so many Americans face. Send me a tweet, email me your ideas, bring your passion to the Graham Sessions if you can get there and, of course, any time you are in/around New Jersey, plan to stop in. The current state of health care, with all its warts, seems to have primed the industry for low-end disruption, possibly one of the most remarkable opportunities our profession has ever had.

It starts with us.

REFERENCES

1. Michael Gerber: E-myth Revisited.

2. Jim Collins: Good to Great.

3. www.newyorker.com/magazine/2014/06/23/the-disruptionmachine? currentPage=all Accessed February 2015.

4. http://techcrunch.com/2014/06/30/christensen-vs-leporea- matter-of-fact/ Accessed February 2015.

5. www.who.int/about/definition/en/print.html Accessed February 2015.

Michael Eisenhart, PT, is a PPS member and owner of Pro-Activity Associates in Lebanon, New Jersey. He can be reached at meisenhart@pro-activity.com.

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