when Warren Buffett addressed the audience at his annual shareholders
audience at his annual shareholders
audience at his annual shareholders meeting this year as a respected
meeting this year as a respected
meeting this year as a respected business leader and thought leader the
business leader and thought leader the
business leader and thought leader the audience expected to hear his take on
audience expected to hear his take on
audience expected to hear his take on corporate tax reform and the benefits
corporate tax reform and the benefits
corporate tax reform and the benefits afforded to his business as a result but
afforded to his business as a result but
afforded to his business as a result but Buffett took the occasion to send an
Buffett took the occasion to send an
Buffett took the occasion to send an entirely different message in truth he
entirely different message in truth he
entirely different message in truth he said a Spectre far more sinister than
said a Spectre far more sinister than
said a Spectre far more sinister than corporate taxes looms over corporate
corporate taxes looms over corporate
corporate taxes looms over corporate American business and that issue is
American business and that issue is
American business and that issue is health care cost nobody went on to say
health care cost nobody went on to say
health care cost nobody went on to say was that health care costs are rising at
was that health care costs are rising at
was that health care costs are rising at a rate so rapid right that they are
a rate so rapid right that they are
a rate so rapid right that they are consuming the profits of corporate
consuming the profits of corporate
consuming the profits of corporate businesses and he set it up this way
businesses and he set it up this way
businesses and he set it up this way he says compare that the corporate tax
he says compare that the corporate tax
he says compare that the corporate tax rates versus health care expenses over a
rates versus health care expenses over a
rates versus health care expenses over a period of time and so we went back to
period of time and so we went back to
period of time and so we went back to the 1960s and said corporate tax as a
the 1960s and said corporate tax as a
the 1960s and said corporate tax as a percent of GDP or the value of the
percent of GDP or the value of the
percent of GDP or the value of the economy was 4% in the 60s but today that
economy was 4% in the 60s but today that
economy was 4% in the 60s but today that number is just 2% of the value of our
number is just 2% of the value of our
number is just 2% of the value of our economy well keep that in perspective in
economy well keep that in perspective in
economy well keep that in perspective in terms of the magnitude but let’s look at
terms of the magnitude but let’s look at
terms of the magnitude but let’s look at health care cost over that same time
health care cost over that same time
health care cost over that same time period 50 years ago healthcare costs
period 50 years ago healthcare costs
period 50 years ago healthcare costs comprise just 5% of the value of the
comprise just 5% of the value of the
comprise just 5% of the value of the economy overall today they comprise 17%
economy overall today they comprise 17%
economy overall today they comprise 17% and growing there’s no end in sight
and growing there’s no end in sight
and growing there’s no end in sight greater than three times approaching
greater than three times approaching
greater than three times approaching four times what they were and so now you
four times what they were and so now you
four times what they were and so now you can appreciate why Buffett and every
can appreciate why Buffett and every
can appreciate why Buffett and every business leader and you and I should
business leader and you and I should
business leader and you and I should also be so concerned about this cost now
also be so concerned about this cost now
also be so concerned about this cost now a Buffett didn’t do is talk about the
a Buffett didn’t do is talk about the
a Buffett didn’t do is talk about the ways that we can reduce cost but I can
ways that we can reduce cost but I can
ways that we can reduce cost but I can assure you there are things that we can
assure you there are things that we can
assure you there are things that we can do and we must do to reduce cost but
do and we must do to reduce cost but
do and we must do to reduce cost but also improve quality and improve the
also improve quality and improve the
also improve quality and improve the patient experience and we need only look
patient experience and we need only look
patient experience and we need only look to other industries that have already
to other industries that have already
to other industries that have already done this they’ve solved equally complex
done this they’ve solved equally complex
done this they’ve solved equally complex problems with resources that are very
problems with resources that are very
problems with resources that are very similar so where do I get the confidence
similar so where do I get the confidence
similar so where do I get the confidence to say this why why do I have such
to say this why why do I have such
to say this why why do I have such conviction well I came out of a
conviction well I came out of a
conviction well I came out of a different space before healthcare I was
different space before healthcare I was
different space before healthcare I was involved in manufacturing specifically
involved in manufacturing specifically
involved in manufacturing specifically contract electronics manufacturing and
contract electronics manufacturing and
contract electronics manufacturing and in that environment we had
in that environment we had
in that environment we had stammers like General Electric and
stammers like General Electric and
stammers like General Electric and Siemens and juniper Networks and these
Siemens and juniper Networks and these
Siemens and juniper Networks and these customers were extremely demanding with
customers were extremely demanding with
customers were extremely demanding with regard to product functionality but also
regard to product functionality but also
regard to product functionality but also with regard to cost quality in the time
with regard to cost quality in the time
with regard to cost quality in the time that we would deliver and so we
that we would deliver and so we
that we would deliver and so we literally had to put a team of people
literally had to put a team of people
literally had to put a team of people together to meet the demands of these
together to meet the demands of these
together to meet the demands of these organizations so we had our design team
organizations so we had our design team
organizations so we had our design team from product design as well as our test
from product design as well as our test
from product design as well as our test engineers our manufacturing staff and
engineers our manufacturing staff and
engineers our manufacturing staff and our procurement folks the folks that
our procurement folks the folks that
our procurement folks the folks that bought the parts that were going to be
bought the parts that were going to be
bought the parts that were going to be used all together around the table to
used all together around the table to
used all together around the table to design these products to meet their need
design these products to meet their need
design these products to meet their need and we got good at this right we got so
and we got good at this right we got so
and we got good at this right we got so good at this in fact that we were known
good at this in fact that we were known
good at this in fact that we were known for it so we’d take product out of
for it so we’d take product out of
for it so we’d take product out of design get it through prototyping into
design get it through prototyping into
design get it through prototyping into low value manufacturing high volume
low value manufacturing high volume
low value manufacturing high volume manufacturing and making a profit or
manufacturing and making a profit or
manufacturing and making a profit or revenue for our customers quicker than
revenue for our customers quicker than
revenue for our customers quicker than anybody else and we’d call this process
anybody else and we’d call this process
anybody else and we’d call this process time – revenue and we’d measure
time – revenue and we’d measure
time – revenue and we’d measure ourselves based on our ability to get
ourselves based on our ability to get
ourselves based on our ability to get product from design to revenue as
product from design to revenue as
product from design to revenue as quickly as we could now we thought that
quickly as we could now we thought that
quickly as we could now we thought that was pretty good and we felt good about
was pretty good and we felt good about
was pretty good and we felt good about ourselves delivering that particular
ourselves delivering that particular
ourselves delivering that particular service but our customers said that
service but our customers said that
service but our customers said that wasn’t enough
wasn’t enough
wasn’t enough right well GE wanted was 10 percent cost
right well GE wanted was 10 percent cost
right well GE wanted was 10 percent cost reduction per year immediately after we
reduction per year immediately after we
reduction per year immediately after we got those parts into production right so
got those parts into production right so
got those parts into production right so how are you gonna do that again bring
how are you gonna do that again bring
how are you gonna do that again bring the same team back together again let’s
the same team back together again let’s
the same team back together again let’s understand how we can cost reduce those
understand how we can cost reduce those
understand how we can cost reduce those pot up those products and years – and
pot up those products and years – and
pot up those products and years – and years 3 right and so what we also knew
years 3 right and so what we also knew
years 3 right and so what we also knew was that you can’t cost reduce a product
was that you can’t cost reduce a product
was that you can’t cost reduce a product infinitely and so you can only cost
infinitely and so you can only cost
infinitely and so you can only cost reduce for an iteration or maybe two and
reduce for an iteration or maybe two and
reduce for an iteration or maybe two and then you’ve got to redesign that product
then you’ve got to redesign that product
then you’ve got to redesign that product right for current functionality using
right for current functionality using
right for current functionality using current manufacturing techniques current
current manufacturing techniques current
current manufacturing techniques current design that’s available so you can’t
design that’s available so you can’t
design that’s available so you can’t lean the rotary telephone into the
lean the rotary telephone into the
lean the rotary telephone into the iPhone right and so you’ve got to start
iPhone right and so you’ve got to start
iPhone right and so you’ve got to start over with a brand new technique and so
over with a brand new technique and so
over with a brand new technique and so healthcare can learn from that process
healthcare can learn from that process
healthcare can learn from that process right and that we’re constantly
right and that we’re constantly
right and that we’re constantly iterating right and so I grew up in this
iterating right and so I grew up in this
iterating right and so I grew up in this environment where costs came down
environment where costs came down
environment where costs came down dramatically every year not one or two
dramatically every year not one or two
dramatically every year not one or two percent but 10 to 30 percent and quality
percent but 10 to 30 percent and quality
percent but 10 to 30 percent and quality increased dramatically every year and
increased dramatically every year and
increased dramatically every year and that was the only experience that I knew
that was the only experience that I knew
that was the only experience that I knew let’s compare that now to where we are
let’s compare that now to where we are
let’s compare that now to where we are with
with
with health care ok healthcare cost when I
health care ok healthcare cost when I
health care ok healthcare cost when I joined the organization in 2007 cost
joined the organization in 2007 cost
joined the organization in 2007 cost accounting was not standard and I would
accounting was not standard and I would
accounting was not standard and I would tell you that even today Quast
tell you that even today Quast
tell you that even today Quast accounting principles are now widely
accounting principles are now widely
accounting principles are now widely used and because we don’t have cost
used and because we don’t have cost
used and because we don’t have cost accounting we can’t understand the price
accounting we can’t understand the price
accounting we can’t understand the price that it takes us to deliver a service to
that it takes us to deliver a service to
that it takes us to deliver a service to the market at a reasonable profit and
the market at a reasonable profit and
the market at a reasonable profit and establish that as our unit selling price
establish that as our unit selling price
establish that as our unit selling price it’s just not feasible so in the absence
it’s just not feasible so in the absence
it’s just not feasible so in the absence of that standard business process in
of that standard business process in
of that standard business process in healthcare the government has stood in
healthcare the government has stood in
healthcare the government has stood in and dictated the price for us so
and dictated the price for us so
and dictated the price for us so Medicare establishes the price for all
Medicare establishes the price for all
Medicare establishes the price for all medical services that are delivered
medical services that are delivered
medical services that are delivered across the country and if you’re a
across the country and if you’re a
across the country and if you’re a Medicare recipient you know exactly what
Medicare recipient you know exactly what
Medicare recipient you know exactly what the price is going to be but here’s the
the price is going to be but here’s the
the price is going to be but here’s the situation as soon as those Medicare
situation as soon as those Medicare
situation as soon as those Medicare prices came out and the physicians and
prices came out and the physicians and
prices came out and the physicians and the facility administrators looked at
the facility administrators looked at
the facility administrators looked at what they had to deal with for
what they had to deal with for
what they had to deal with for reimbursement many of them knew that
reimbursement many of them knew that
reimbursement many of them knew that they could not make money on Medicare
they could not make money on Medicare
they could not make money on Medicare alone as a payer and so they had to look
alone as a payer and so they had to look
alone as a payer and so they had to look to other sources to sell their services
to other sources to sell their services
to other sources to sell their services in order to have a viable business model
in order to have a viable business model
in order to have a viable business model and so they looked to the insurance
and so they looked to the insurance
and so they looked to the insurance companies and they look to the employers
companies and they look to the employers
companies and they look to the employers and they negotiated rates with them
and they negotiated rates with them
and they negotiated rates with them higher than Medicare and some of these
higher than Medicare and some of these
higher than Medicare and some of these organizations were relatively modest at
organizations were relatively modest at
organizations were relatively modest at the gains that they are that they were
the gains that they are that they were
the gains that they are that they were able to get so maybe 20% over a Medicare
able to get so maybe 20% over a Medicare
able to get so maybe 20% over a Medicare would be a modest increase for one of
would be a modest increase for one of
would be a modest increase for one of these providers but others were maybe a
these providers but others were maybe a
these providers but others were maybe a little bit more aggressive a bit a
little bit more aggressive a bit a
little bit more aggressive a bit a little bit more nimble than their
little bit more nimble than their
little bit more nimble than their negotiating technique and they may have
negotiating technique and they may have
negotiating technique and they may have gotten as much as four times what
gotten as much as four times what
gotten as much as four times what Medicare was willing to offer so here
Medicare was willing to offer so here
Medicare was willing to offer so here you had a situation where the exact same
you had a situation where the exact same
you had a situation where the exact same medical service delivered to patients if
medical service delivered to patients if
medical service delivered to patients if you choose location a it’s roughly $1
you choose location a it’s roughly $1
you choose location a it’s roughly $1 choose location B roughly 4 bucks right
choose location B roughly 4 bucks right
choose location B roughly 4 bucks right but this isn’t the only industry where
but this isn’t the only industry where
but this isn’t the only industry where this this issue exists right so any of
this this issue exists right so any of
this this issue exists right so any of you that have flown on an airplane
you that have flown on an airplane
you that have flown on an airplane recently what you realize when you were
recently what you realize when you were
recently what you realize when you were sitting in your middle seat and economy
sitting in your middle seat and economy
sitting in your middle seat and economy something like this the price that you
something like this the price that you
something like this the price that you paid for that seat was entirely
paid for that seat was entirely
paid for that seat was entirely different from the price of the seed or
different from the price of the seed or
different from the price of the seed or the fella just next to you right but you
the fella just next to you right but you
the fella just next to you right but you were gonna leave at exactly the same
were gonna leave at exactly the same
were gonna leave at exactly the same time
time
time and you’re gonna get served the same
and you’re gonna get served the same
and you’re gonna get served the same crummy snack in flight and you’re gonna
crummy snack in flight and you’re gonna
crummy snack in flight and you’re gonna arrive at your destination at exactly
arrive at your destination at exactly
arrive at your destination at exactly the same time and depart that airplane
the same time and depart that airplane
the same time and depart that airplane right so it’s very similar service two
right so it’s very similar service two
right so it’s very similar service two totally different prices but the
totally different prices but the
totally different prices but the difference between the airline industry
difference between the airline industry
difference between the airline industry and healthcare is that you could
and healthcare is that you could
and healthcare is that you could actually shop for the lowest price in
actually shop for the lowest price in
actually shop for the lowest price in the airline industry and sometimes
the airline industry and sometimes
the airline industry and sometimes sometimes you can get it right but there
sometimes you can get it right but there
sometimes you can get it right but there are things in in health care right that
are things in in health care right that
are things in in health care right that preclude us from being able to buy from
preclude us from being able to buy from
preclude us from being able to buy from the cheapest it’s it could be our
the cheapest it’s it could be our
the cheapest it’s it could be our insurance policy right that doesn’t
insurance policy right that doesn’t
insurance policy right that doesn’t allow us access to that lowest cost
allow us access to that lowest cost
allow us access to that lowest cost provider or facility there’s also the
provider or facility there’s also the
provider or facility there’s also the issue that we don’t pay for all of the
issue that we don’t pay for all of the
issue that we don’t pay for all of the health care bill ourselves we only pay
health care bill ourselves we only pay
health care bill ourselves we only pay for the first portion and the last piece
for the first portion and the last piece
for the first portion and the last piece is paid by our employer and/or the
is paid by our employer and/or the
is paid by our employer and/or the insurance company right so here you’re
insurance company right so here you’re
insurance company right so here you’re gonna understand basically what the
gonna understand basically what the
gonna understand basically what the health care system is up against and
health care system is up against and
health care system is up against and what we’ve got to work with in terms of
what we’ve got to work with in terms of
what we’ve got to work with in terms of a business model in healthcare ok so how
a business model in healthcare ok so how
a business model in healthcare ok so how was it I came out of my manufacturing
was it I came out of my manufacturing
was it I came out of my manufacturing space and got involved in healthcare
space and got involved in healthcare
space and got involved in healthcare well back in 2007 there were a group of
well back in 2007 there were a group of
well back in 2007 there were a group of doctors that decided they wanted to
doctors that decided they wanted to
doctors that decided they wanted to deliver healthcare totally differently
deliver healthcare totally differently
deliver healthcare totally differently and so they wanted to put together a
and so they wanted to put together a
and so they wanted to put together a facility for bone muscle and joint care
facility for bone muscle and joint care
facility for bone muscle and joint care and they created a building and in this
and they created a building and in this
and they created a building and in this building they put their physician
building they put their physician
building they put their physician offices and exam rooms but they also
offices and exam rooms but they also
offices and exam rooms but they also added diagnostic testing so x-ray and
added diagnostic testing so x-ray and
added diagnostic testing so x-ray and MRI scan and they had a surgery center
MRI scan and they had a surgery center
MRI scan and they had a surgery center there as well to do operations on site
there as well to do operations on site
there as well to do operations on site as well as physical therapy and even
as well as physical therapy and even
as well as physical therapy and even thoughts so much to add a bracing
thoughts so much to add a bracing
thoughts so much to add a bracing facility an orthotist and they created
facility an orthotist and they created
facility an orthotist and they created what they thought they had in terms of a
what they thought they had in terms of a
what they thought they had in terms of a much better delivery model a one-stop
much better delivery model a one-stop
much better delivery model a one-stop shop but when I was introduced to that
shop but when I was introduced to that
shop but when I was introduced to that and I saw what it was it felt to me more
and I saw what it was it felt to me more
and I saw what it was it felt to me more like the medical mall right I still had
like the medical mall right I still had
like the medical mall right I still had to do the shopping myself as a patient I
to do the shopping myself as a patient I
to do the shopping myself as a patient I had to go from store front to store
had to go from store front to store
had to go from store front to store front I had to deal with my own
front I had to deal with my own
front I had to deal with my own appointments and calendar and
appointments and calendar and
appointments and calendar and inefficiencies with that whole model but
inefficiencies with that whole model but
inefficiencies with that whole model but I thought to myself what if
I thought to myself what if
I thought to myself what if what if we could take that model and tip
what if we could take that model and tip
what if we could take that model and tip it on its side and again think with the
it on its side and again think with the
it on its side and again think with the end in mind and draw this process
end in mind and draw this process
end in mind and draw this process forward in a aligned fashion and
forward in a aligned fashion and
forward in a aligned fashion and actually manage the care of that patient
actually manage the care of that patient
actually manage the care of that patient for them and give access to those
for them and give access to those
for them and give access to those doctors on the same day that you wanted
doctors on the same day that you wanted
doctors on the same day that you wanted to be seen and then have diagnostic
to be seen and then have diagnostic
to be seen and then have diagnostic imaging there right away so that you
imaging there right away so that you
imaging there right away so that you could be seen and have a proper
could be seen and have a proper
could be seen and have a proper diagnosis rather than having to come
diagnosis rather than having to come
diagnosis rather than having to come back for another visit and what if I
back for another visit and what if I
back for another visit and what if I could get a treatment plan prepared
could get a treatment plan prepared
could get a treatment plan prepared quicker than anybody else and then get
quicker than anybody else and then get
quicker than anybody else and then get you back to where you were prior to your
you back to where you were prior to your
you back to where you were prior to your injury and what if we compared that
injury and what if we compared that
injury and what if we compared that entire spectrum of care to this
entire spectrum of care to this
entire spectrum of care to this manufacturing thing that I talked about
manufacturing thing that I talked about
manufacturing thing that I talked about this time to revenue and what if we call
this time to revenue and what if we call
this time to revenue and what if we call that return to lifestyle and we were
that return to lifestyle and we were
that return to lifestyle and we were able to prepare some value some true
able to prepare some value some true
able to prepare some value some true value in the market that patients would
value in the market that patients would
value in the market that patients would appreciate that employers would
appreciate that employers would
appreciate that employers would appreciate it
appreciate it
appreciate it so was with that prospect I stepped out
so was with that prospect I stepped out
so was with that prospect I stepped out of manufacturing and joined this group
of manufacturing and joined this group
of manufacturing and joined this group on this journey in healthcare and so for
on this journey in healthcare and so for
on this journey in healthcare and so for the first time in my career I stood at a
the first time in my career I stood at a
the first time in my career I stood at a crossroads the intersection of the
crossroads the intersection of the
crossroads the intersection of the manufacturing world that I knew lined
manufacturing world that I knew lined
manufacturing world that I knew lined with metrics and costs in rational
with metrics and costs in rational
with metrics and costs in rational thinking in terms of pricing and this
thinking in terms of pricing and this
thinking in terms of pricing and this world that I was about to know
world that I was about to know
world that I was about to know healthcare with all of its ambiguities
healthcare with all of its ambiguities
healthcare with all of its ambiguities and inefficiencies but the idea was can
and inefficiencies but the idea was can
and inefficiencies but the idea was can you make a impact can you make a
you make a impact can you make a
you make a impact can you make a difference by applying what you know to
difference by applying what you know to
difference by applying what you know to what you think you can do and so far
what you think you can do and so far
what you think you can do and so far here’s what I’ll tell you the results
here’s what I’ll tell you the results
here’s what I’ll tell you the results are early on and they’re very limited in
are early on and they’re very limited in
are early on and they’re very limited in scope but I feel really good about what
scope but I feel really good about what
scope but I feel really good about what we’ve been able to accomplish and I
we’ve been able to accomplish and I
we’ve been able to accomplish and I think it’s something that is repeatable
think it’s something that is repeatable
think it’s something that is repeatable and scalable so let’s just take one
and scalable so let’s just take one
and scalable so let’s just take one element right let’s pick on quality in a
element right let’s pick on quality in a
element right let’s pick on quality in a surgical environment you want to make
surgical environment you want to make
surgical environment you want to make sure you reduce infection you want to
sure you reduce infection you want to
sure you reduce infection you want to keep infection out not only for cost
keep infection out not only for cost
keep infection out not only for cost perspective but from a patient’s
perspective but from a patient’s
perspective but from a patient’s perspective it’s a miserable experience
perspective it’s a miserable experience
perspective it’s a miserable experience and so we wanted to pick on infection
and so we wanted to pick on infection
and so we wanted to pick on infection right away and reduce that you know in
right away and reduce that you know in
right away and reduce that you know in our environment but what do you choose
our environment but what do you choose
our environment but what do you choose as the target well in the manufacturing
as the target well in the manufacturing
as the target well in the manufacturing world that I came from we chose what was
world that I came from we chose what was
world that I came from we chose what was called world class Six Sigma
called world class Six Sigma
called world class Six Sigma three point four defects per million
three point four defects per million
three point four defects per million opportunities very small but in the
opportunities very small but in the
opportunities very small but in the surgery center we were only delivering
surgery center we were only delivering
surgery center we were only delivering thousands of surgeries per year so it
thousands of surgeries per year so it
thousands of surgeries per year so it was even smaller still so small in fact
was even smaller still so small in fact
was even smaller still so small in fact that that number was approximately zero
that that number was approximately zero
that that number was approximately zero and so that was our target our target
and so that was our target our target
and so that was our target our target was zero we were gonna eliminate
was zero we were gonna eliminate
was zero we were gonna eliminate infection from our operating rooms that
infection from our operating rooms that
infection from our operating rooms that was our goal and so we had to fight
was our goal and so we had to fight
was our goal and so we had to fight figure out a way to do this and so we
figure out a way to do this and so we
figure out a way to do this and so we brought our medical team around the
brought our medical team around the
brought our medical team around the table just like I had done previously
table just like I had done previously
table just like I had done previously and figured out how to design a process
and figured out how to design a process
and figured out how to design a process that was going to eliminate infection
that was going to eliminate infection
that was going to eliminate infection from the operating rooms and so some of
from the operating rooms and so some of
from the operating rooms and so some of the things were standard things that you
the things were standard things that you
the things were standard things that you would consider normal taking care of the
would consider normal taking care of the
would consider normal taking care of the facilities in the equipment to have
facilities in the equipment to have
facilities in the equipment to have sterilization processes and protocols
sterilization processes and protocols
sterilization processes and protocols that would eliminate that as being a
that would eliminate that as being a
that would eliminate that as being a contributing factor and then we also
contributing factor and then we also
contributing factor and then we also looked at Leave It or Not hand-washing
looked at Leave It or Not hand-washing
looked at Leave It or Not hand-washing it’s one of the biggest contributors to
it’s one of the biggest contributors to
it’s one of the biggest contributors to infection in an operating room the
infection in an operating room the
infection in an operating room the protocol is to wash your hands and so we
protocol is to wash your hands and so we
protocol is to wash your hands and so we made certain that not only did we have
made certain that not only did we have
made certain that not only did we have them but we followed them we followed
them but we followed them we followed
them but we followed them we followed them rigorously educating every one of
them rigorously educating every one of
them rigorously educating every one of our staff members on the importance of
our staff members on the importance of
our staff members on the importance of hand-washing when to wash your hands for
hand-washing when to wash your hands for
hand-washing when to wash your hands for what duration with what product to
what duration with what product to
what duration with what product to eliminate that as a contributing factor
eliminate that as a contributing factor
eliminate that as a contributing factor but then we went a step further we asked
but then we went a step further we asked
but then we went a step further we asked the ask experts of infectious disease
the ask experts of infectious disease
the ask experts of infectious disease from the University of wisconsin-madison
from the University of wisconsin-madison
from the University of wisconsin-madison to come in and take a look at our
to come in and take a look at our
to come in and take a look at our processes and tell us what they thought
processes and tell us what they thought
processes and tell us what they thought about where we were going and what they
about where we were going and what they
about where we were going and what they said was this you’ve got another
said was this you’ve got another
said was this you’ve got another significant contributing factor to
significant contributing factor to
significant contributing factor to infection that you haven’t considered
infection that you haven’t considered
infection that you haven’t considered and it’s you and me you see we as
and it’s you and me you see we as
and it’s you and me you see we as patients we have bacteria on our skin
patients we have bacteria on our skin
patients we have bacteria on our skin and if that bacteria is not cleaned
and if that bacteria is not cleaned
and if that bacteria is not cleaned before surgery you can actually
before surgery you can actually
before surgery you can actually introduce that bacteria into the
introduce that bacteria into the
introduce that bacteria into the surgical wound and so what the industry
surgical wound and so what the industry
surgical wound and so what the industry does is to give you an AI septic soap
does is to give you an AI septic soap
does is to give you an AI septic soap and expect you to wash preoperatively to
and expect you to wash preoperatively to
and expect you to wash preoperatively to reduce that opportunity but I can tell
reduce that opportunity but I can tell
reduce that opportunity but I can tell you even in our processes our patients
you even in our processes our patients
you even in our processes our patients were completely inconsistent in the way
were completely inconsistent in the way
were completely inconsistent in the way that they used it so again thinking with
that they used it so again thinking with
that they used it so again thinking with the end in mind drawing that education
the end in mind drawing that education
the end in mind drawing that education process from late in a game to very
process from late in a game to very
process from late in a game to very early in the game we told these patients
early in the game we told these patients
early in the game we told these patients exactly what we wanted them to do in a
exactly what we wanted them to do in a
exactly what we wanted them to do in a one-on-one education session and we said
one-on-one education session and we said
one-on-one education session and we said here are the reasons why this is
here are the reasons why this is
here are the reasons why this is important we want you to wash for this
important we want you to wash for this
important we want you to wash for this duration of time at this period leave
duration of time at this period leave
duration of time at this period leave the soap on this long
the soap on this long
the soap on this long rinse at this time so we could reduce
rinse at this time so we could reduce
rinse at this time so we could reduce the opportunity for infection but we
the opportunity for infection but we
the opportunity for infection but we went a step further there as well we
went a step further there as well we
went a step further there as well we told them why we said hey listen we have
told them why we said hey listen we have
told them why we said hey listen we have created this team to reduce infection
created this team to reduce infection
created this team to reduce infection and you are part of the team because
and you are part of the team because
and you are part of the team because without your participation you could
without your participation you could
without your participation you could introduce infection into this process
introduce infection into this process
introduce infection into this process and you don’t want to become infected
and you don’t want to become infected
and you don’t want to become infected right and so with this teamwork right
right and so with this teamwork right
right and so with this teamwork right this way of working we’ve successfully
this way of working we’ve successfully
this way of working we’ve successfully reduced the infection rates in our
reduced the infection rates in our
reduced the infection rates in our operating rooms to three tenths of one
operating rooms to three tenths of one
operating rooms to three tenths of one percent right versus the industry
percent right versus the industry
percent right versus the industry average of one and a half percent so
average of one and a half percent so
average of one and a half percent so five times less likely to become
five times less likely to become
five times less likely to become infected in our operating rooms now
infected in our operating rooms now
infected in our operating rooms now we’re not at zero so we’ve got a lot of
we’re not at zero so we’ve got a lot of
we’re not at zero so we’ve got a lot of work yet to do but I can tell you this
work yet to do but I can tell you this
work yet to do but I can tell you this if we hadn’t set our target at zero we
if we hadn’t set our target at zero we
if we hadn’t set our target at zero we wouldn’t be where we are today right
wouldn’t be where we are today right
wouldn’t be where we are today right next let’s pick on price so we’re we
next let’s pick on price so we’re we
next let’s pick on price so we’re we have a price another industry that I can
have a price another industry that I can
have a price another industry that I can assure you is one of the only industries
assure you is one of the only industries
assure you is one of the only industries where you can have a service
where you can have a service
where you can have a service administered to you and you have no idea
administered to you and you have no idea
administered to you and you have no idea what the prices none and I’ll tell you
what the prices none and I’ll tell you
what the prices none and I’ll tell you this not only do not know what upfront
this not only do not know what upfront
this not only do not know what upfront what the price is going to be you don’t
what the price is going to be you don’t
what the price is going to be you don’t know for five weeks after the service
know for five weeks after the service
know for five weeks after the service right because you’re getting bills in
right because you’re getting bills in
right because you’re getting bills in the mail I can tell you what we used to
the mail I can tell you what we used to
the mail I can tell you what we used to do we’d send you a bill from the surgeon
do we’d send you a bill from the surgeon
do we’d send you a bill from the surgeon the facility the anesthesiologist
the facility the anesthesiologist
the facility the anesthesiologist physical therapy and the overnight stay
physical therapy and the overnight stay
physical therapy and the overnight stay you didn’t know what to pay what not to
you didn’t know what to pay what not to
you didn’t know what to pay what not to pay we thought we could do better so we
pay we thought we could do better so we
pay we thought we could do better so we took our cost accounting team and our
took our cost accounting team and our
took our cost accounting team and our business administration team and we
business administration team and we
business administration team and we looked at these procedures alongside of
looked at these procedures alongside of
looked at these procedures alongside of our medical staff and we said we can
our medical staff and we said we can
our medical staff and we said we can predict what the cost of these
predict what the cost of these
predict what the cost of these procedures should be the time in the o.r
procedures should be the time in the o.r
procedures should be the time in the o.r who’s in the or how it should work and
who’s in the or how it should work and
who’s in the or how it should work and we have our quality kind of figured out
we have our quality kind of figured out
we have our quality kind of figured out we know what that’s going to be so we
we know what that’s going to be so we
we know what that’s going to be so we should be able to give you a price one
should be able to give you a price one
should be able to give you a price one price and one bill in the mail we
price and one bill in the mail we
price and one bill in the mail we thought that was pretty good but then we
thought that was pretty good but then we
thought that was pretty good but then we thought even better still what if I
thought even better still what if I
thought even better still what if I could tell you prospectively
could tell you prospectively
could tell you prospectively what that price was going to be what if
what that price was going to be what if
what that price was going to be what if I told you well in advance what the cost
I told you well in advance what the cost
I told you well in advance what the cost was going to be so you could shop it our
was going to be so you could shop it our
was going to be so you could shop it our patients love this idea because now they
patients love this idea because now they
patients love this idea because now they knew financially how to prepare for this
knew financially how to prepare for this
knew financially how to prepare for this big expense okay and so I actually did
big expense okay and so I actually did
big expense okay and so I actually did two things they reduced their it gave
two things they reduced their it gave
two things they reduced their it gave them knowledge but also reduced their
them knowledge but also reduced their
them knowledge but also reduced their anxiety right so there were less anxious
anxiety right so there were less anxious
anxiety right so there were less anxious going into this procedure knowing that
going into this procedure knowing that
going into this procedure knowing that we had thought about this
we had thought about this
we had thought about this so those first two things I think are
so those first two things I think are
so those first two things I think are pretty impactful in terms of business
pretty impactful in terms of business
pretty impactful in terms of business application to healthcare the last one
application to healthcare the last one
application to healthcare the last one I’ll tell you I am most proud of
I’ll tell you I am most proud of
I’ll tell you I am most proud of absolutely most proud of because it is
absolutely most proud of because it is
absolutely most proud of because it is the reason why people come back so our
the reason why people come back so our
the reason why people come back so our patients have told us in survey after
patients have told us in survey after
patients have told us in survey after survey and after we have a chance to
survey and after we have a chance to
survey and after we have a chance to interview them we love the things that
interview them we love the things that
interview them we love the things that you’ve done with cost we really
you’ve done with cost we really
you’ve done with cost we really appreciate the quality but the reason I
appreciate the quality but the reason I
appreciate the quality but the reason I would tell my friends and family to come
would tell my friends and family to come
would tell my friends and family to come and see you the reason that I myself as
and see you the reason that I myself as
and see you the reason that I myself as a patient would come back was because of
a patient would come back was because of
a patient would come back was because of the way you made me feel that you
the way you made me feel that you
the way you made me feel that you actually care that your doctors took the
actually care that your doctors took the
actually care that your doctors took the time to listen to me and really
time to listen to me and really
time to listen to me and really understood where I was and where I
understood where I was and where I
understood where I was and where I wanted to be postoperatively and your
wanted to be postoperatively and your
wanted to be postoperatively and your staff your staff genuinely authentically
staff your staff genuinely authentically
staff your staff genuinely authentically wants to do the right thing and it
wants to do the right thing and it
wants to do the right thing and it appears like they like their work like
appears like they like their work like
appears like they like their work like they really like to be at work is that
they really like to be at work is that
they really like to be at work is that true of all health care people different
true of all health care people different
true of all health care people different right but here’s what happened when we
right but here’s what happened when we
right but here’s what happened when we challenged these people right to very
challenged these people right to very
challenged these people right to very extraordinary goals and they achieved
extraordinary goals and they achieved
extraordinary goals and they achieved those goals it energized them it engaged
those goals it energized them it engaged
those goals it energized them it engaged them in a way that I couldn’t have
them in a way that I couldn’t have
them in a way that I couldn’t have predicted and that translated into a
predicted and that translated into a
predicted and that translated into a patient experience that is absolutely
patient experience that is absolutely
patient experience that is absolutely off the charts fantastic and I’m most
off the charts fantastic and I’m most
off the charts fantastic and I’m most proud of that for sure so these are the
proud of that for sure so these are the
proud of that for sure so these are the things that we can do now how can we
things that we can do now how can we
things that we can do now how can we translate what we’ve done in a microcosm
translate what we’ve done in a microcosm
translate what we’ve done in a microcosm here into something on a national scale
here into something on a national scale
here into something on a national scale how does this reduce the cost of health
how does this reduce the cost of health
how does this reduce the cost of health care overall well you and I again have
care overall well you and I again have
care overall well you and I again have got to become consumers of health care
got to become consumers of health care
got to become consumers of health care we’ve got to start asking in advance
we’ve got to start asking in advance
we’ve got to start asking in advance what’s the price of this procedure and
what’s the price of this procedure and
what’s the price of this procedure and with increasing intensity you’ll start
with increasing intensity you’ll start
with increasing intensity you’ll start to get a response you’ve got to ask
to get a response you’ve got to ask
to get a response you’ve got to ask things about quality what’s going on
things about quality what’s going on
things about quality what’s going on with your infection rate your
with your infection rate your
with your infection rate your readmission rate you see you have to act
readmission rate you see you have to act
readmission rate you see you have to act like GE and juniper that were driving
like GE and juniper that were driving
like GE and juniper that were driving our costs down and our quality up
our costs down and our quality up
our costs down and our quality up there’s got to be a lever and we are it
there’s got to be a lever and we are it
there’s got to be a lever and we are it right finally as providers we can do
right finally as providers we can do
right finally as providers we can do more – we can continually improve our
more – we can continually improve our
more – we can continually improve our processes on our own to increase
processes on our own to increase
processes on our own to increase affordability and accessibility and we
affordability and accessibility and we
affordability and accessibility and we need to do that we need to press on that
need to do that we need to press on that
need to do that we need to press on that experience and I can tell you this if we
experience and I can tell you this if we
experience and I can tell you this if we continue to thrive on our infection
continue to thrive on our infection
continue to thrive on our infection rates to drive that number to zero and
rates to drive that number to zero and
rates to drive that number to zero and no transparency today I don’t know what
no transparency today I don’t know what
no transparency today I don’t know what my competitors rates are if I hit zero I
my competitors rates are if I hit zero I
my competitors rates are if I hit zero I know they’re not lower than me
know they’re not lower than me
know they’re not lower than me right
right
right so let’s strive for perfection let’s see
so let’s strive for perfection let’s see
so let’s strive for perfection let’s see if we can hit and what the results might
if we can hit and what the results might
if we can hit and what the results might be if we were to hit it because I would
be if we were to hit it because I would
be if we were to hit it because I would contend to you this if you’re striving
contend to you this if you’re striving
contend to you this if you’re striving for perfection the competition becomes
for perfection the competition becomes
for perfection the competition becomes inconsequential and we can absolutely
inconsequential and we can absolutely
inconsequential and we can absolutely have a positive impact and not only the
have a positive impact and not only the
have a positive impact and not only the cost but the experience and the quality
cost but the experience and the quality
cost but the experience and the quality in health care thank you
”
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