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Framing the Issues

Summary FindingsHBS/HMS Survey of Executive Sentiment in Healthcare

November 14, 2012

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Capture senior executive sentiment about key trends in innovation, quality, and cost in healthcare Critical and informative Challenging to measure

Cover a broad range of sectors within the industry Respondents Questions

Frame our discussion for the next two days

Develop a survey approach that can be used going forward

Survey Objectives

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Questions developed by HBS/HMS faculty organizing committee (Chin, Hamermesh, Huckman, McNeil, Newhouse) with help from HBS survey support (Chase Harrison, Cara Sterling) Abt SRBI (Benjamin Phillips and Stephanie Lawrence)

Cognitive testing by Abt SRBI Participants in HBS healthcare executive program HBS MBA students with healthcare (often clinical) expertise

On-line survey requests sent to 509 invitees to the Forum on Healthcare Innovation 216 responses as of October 10, 2012

Approach

Title Goes Here Academia17%

Provider15%

Payor5%

Pharma/Biotech17%

Devices/Diagnostics4%

Medical Research6%

Healthcare Services/IT7%

Investor8%

Non-Healthcare/Other21%

Respondents by Sector (n=216)

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Quality Current Trajectory

Quality and Cost Trajectory Overall By Innovation Category

Role of Key Actors in Healthcare Innovation Government Existing Firms New Entrants

Flow of Findings

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Good33%

Only Fair or Poor29%

Excel-lent or Very Good38%

Pulling Ahead

18%

Keeping Pace44%

Falling Behind

38%

“How would you rate the quality of healthcare for the average person in the US compared to other advanced industrialized countries, such as Canada, England, Germany, and Japan?”

“Is the quality of healthcare in the US falling behind, keeping pace with, or pulling ahead of that in other advanced industrialized countries?”

Quality: Current and Trajectory

Current Quality Quality Trajectory

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Quality: Current and Trajectory (Positive Sentiment)

Excellent or Very Good /

Keeping Pace

19%

Excellent or Very Good /

Pulling Ahead

14%

Good / Pulling Ahead

3%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Excellent or Very Good /

Keeping Pace

19%Good /

Pulling Ahead

3%

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Quality: Current and Trajectory (Positive Sentiment)

Excellent or Very Good /

Keeping Pace

19%

Excellent or Very Good /

Pulling Ahead

14%

Good / Pulling Ahead

3%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Good / Pulling Ahead

3%

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Quality: Current and Trajectory (Positive Sentiment)

Excellent or Very Good /

Keeping Pace

19%

Excellent or Very Good /

Pulling Ahead

14%

Good / Pulling Ahead

3%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

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Quality: Current and Trajectory (Negative Sentiment)

Only Fair or Poor / Falling Behind

20%

Only Fair or Poor / Keeping Pace

8%Good /

Falling Behind

12%CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Only Fair or Poor / Falling Behind

20%

Good /Falling Behind

12%

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Quality: Current and Trajectory (Negative Sentiment)

Only Fair or Poor / Falling Behind

20%

Only Fair or Poor / Keeping Pace

8%Good /

Falling Behind

12%CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Only Fair or Poor / Falling Behind

20%

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Quality: Current and Trajectory (Negative Sentiment)

Only Fair or Poor / Falling Behind

20%

Only Fair or Poor / Keeping Pace

8%Good /

Falling Behind

12%CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

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Quality: Current and Trajectory (Mixed Sentiment)

Excellent or Very Good /

Falling Behind

5%Good /

Keeping Pace

18%Only Fair or Poor /

Pulling Ahead

1%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Good / Keeping Pace

18%Only Fair or Poor /

Pulling Ahead

1%

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Quality: Current and Trajectory (Mixed Sentiment)

Excellent or Very Good /

Falling Behind

5%Good /

Keeping Pace

18%Only Fair or Poor /

Pulling Ahead

1%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

Only Fair or Poor /Pulling Ahead

1%

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Quality: Current and Trajectory (Mixed Sentiment)

Excellent or Very Good /

Falling Behind

5%Good /

Keeping Pace

18%Only Fair or Poor /

Pulling Ahead

1%

CURRENT QUALITY

Excellent or Very Good

Good

Only Fair or Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

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Quality Sentiment: An Even Split

40%

24% 36%

CURRENT QUALITY

Excellent or Very Good

Good

Only FairOr Poor

QUALITY TRAJECTORY

Falling Behind

Keeping Pace

Pulling Ahead

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Stay the Same43%

Increase50%

Decrease7%

Next 5 Years: Health Care Costs Relative to Inflation

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Trajectory: Quality and Cost (Positive Sentiment)

Decreasing Costs / Pulling Ahead

1%

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Same Costs / Pulling Ahead

9%Decreasing Costs /

Keeping Pace

2%

Same Costs / Pulling Ahead

9%Decreasing Costs /

Keeping Pace

2%

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Trajectory: Quality and Cost (Positive Sentiment)

Decreasing Costs / Pulling Ahead

1%

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Same Costs / Pulling Ahead

9%Decreasing Costs /

Keeping Pace

2%Decreasing Costs /

Keeping Pace

2%

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Trajectory: Quality and Cost (Positive Sentiment)

Decreasing Costs / Pulling Ahead

1%

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Same Costs / Pulling Ahead

9%Decreasing Costs /

Keeping Pace

2%

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Trajectory: Quality and Cost (Negative Sentiment)

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Increasing Costs / Falling Behind

22%

Increasing Costs / Keeping Pace

21%

Same Costs / Falling Behind

12%

Increasing Costs / Falling Behind

22%

Increasing Costs / Keeping Pace

21%

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Trajectory: Quality and Cost (Negative Sentiment)

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Increasing Costs / Falling Behind

22%

Increasing Costs / Keeping Pace

21%

Same Costs / Falling Behind

12%

Increasing Costs / Falling Behind

22%

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Trajectory: Quality and Cost (Negative Sentiment)

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Increasing Costs / Falling Behind

22%

Increasing Costs / Keeping Pace

21%

Same Costs / Falling Behind

12%

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INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Trajectory: Quality and Cost (Mixed Sentiment)

Decreasing Costs / Falling Behind

3%Same Costs / Keeping Pace

21%Increasing Costs /

Pulling Ahead

8%

Same Costs / Keeping Pace

21%Increasing Costs /

Pulling Ahead

8%

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INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Trajectory: Quality and Cost (Mixed Sentiment)

Decreasing Costs / Falling Behind

3%Same Costs / Keeping Pace

21%Increasing Costs /

Pulling Ahead

8%Increasing Costs /

Pulling Ahead

8%

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INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

Trajectory: Quality and Cost (Mixed Sentiment)

Decreasing Costs / Falling Behind

3%Same Costs / Keeping Pace

21%Increasing Costs /

Pulling Ahead

8%

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Quality and Cost Trajectory: Cause for Concern

55%

33% 12%

INFLATION-ADJUSTED

COST

Decreasing

Same

Increasing

QUALITY

Falling Behind

Keeping Pace

Pulling Ahead

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-20 -10 0 10 20 30 40 50

-80

-60

-40

-20

0

20

40

60

Diagnostics

Pharmaceuticals

Disease man-agement

Process im-provement

Non-physician personnel

Data analytics

Consumer in-centives

Electronic medical records

Alternatives to FFS payment

Basic medical research

End-of-life care

Opportunities for Innovation

Net Quality Impact (%)

Net Cost Control Impact (%)

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Diagnosti

cs

Pharmace

uticals

Disease

managemen

t

Proce

ss im

provements

Non-physicia

n personnel

Data analyti

cs

Consumer in

centives

EMR

End-of-li

fe care

Altern

atives to FF

S

Basic re

search

-60

-40

-20

0

20

40

60

80

Net

Impo

rtan

ce o

f Priv

ate

Sect

or (%

)More Critical to Foster Innovation: Private Sector or Government?

Government More Critical

Private SectorMore Critical

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Consumer

incentives

Data analyti

cs

Non-physicia

n personnel

Diagnostics

Altern

atives to FF

S

End-of-li

fe care

Proce

ss im

provement

Disease

manage

ment

Pharmace

uticals

EMR

Basic r

esearch

-60

-40

-20

0

20

40

60

80

Net

Impo

rtan

ce o

f New

Ent

rant

s (%

)More Critical to Lead Innovation: New Entrants or Existing Firms?

Existing FirmsMore Critical

New EntrantsMore Critical

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Sentiment about quality (current and trajectory) is genuinely mixed

Sentiment about the trajectory for value (quality and cost) is decidedly more negative

Significant opportunities for process innovations to improve value

Within specific innovation categories Consensus about relative importance of private sector and

government Greater debate over relative importance of existing firms and new

entrants

Summary