What is an organization’s purpose, and how does it shape healthcare innovation?

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Sep 13, 2017

In several prior blog posts I’ve explored innovation in healthcare delivery through the lens of the Theory of Jobs to Be Done. As a refresher, Jobs Theory explains that people buy products because of the progress they enable in a particular set of circumstances (the Job to Be Done), not because they value the products themselves. For example, nobody wants a programmable thermostat per se. But someone might “hire” one to lower energy costs while unemployed (the job of, “protect my financial security”), or to warm the house before the family awakes on winter mornings (the job of, “create a more pleasant home environment.”)

In healthcare, Jobs Theory can help providers and patients craft treatments and regimens, or “health solutions,” that help patients do important life jobs. For instance, an effective asthma control regimen could help solve for the job, “stay connected with friends” by enabling participation in a wider range of social activities. Such solutions are easier for patients to embrace given their unique circumstances, and help them become more effective collaborators in their own care process.

In researching our upcoming paper, Health for Hire: Unleashing Patient Potential to Reduce Chronic Disease Costs, Professor Clayton Christensen, Andrew Waldeck and I studied a number of organizations that provide jobs-based health solutions, whether explicitly or implicitly. Spanning missions, disciplines, sectors, tax status (for- and nonprofit) and continents, these organizations illuminate the sheer breadth of innovation and impact that insightful application of Jobs Theory can enable. They further suggest a number of core enablers relevant to the development of jobs-based solutions, for chronic disease management in particular.

The most fundamental of these enablers is an organizational purpose defined in terms of patient health and wellness, rather than the types of services provided. We call this a health-centric purpose. An organization’s purpose defines both what it delivers to customers, and how it delivers it. A health-centric purpose allows healthcare delivery organizations to innovate however necessary to create health solutions addressing patients’ ever-changing jobs.

By contrast, organizations whose purpose is primarily defined by the services they provide, such as many acute care hospitals or retail clinics, often find themselves in a continual loop of incremental innovation to optimize those services. And they’d have a devilishly hard time breaking out of it to understand and address patients’ jobs over time.

Mission statements and external communications may fully articulate an organization’s health-centric purpose, or merely hint at it. But an organization’s business model tells a more complete story. A business model encompasses the resources, processes, and profit formula an organization creates and leverages to deliver on its value proposition. It also encompasses the culture that emerges in context of these. Analysis of what each of these elements is optimized to achieve yields a good understanding of what the organization as a whole exists–and is best equipped–to achieve.

Intermountain Healthcare,* a large nonprofit health system operating across Utah and Idaho, views the communities it serves as its shareholders, and its purpose to maximize value for them through delivery of high-value care. As Intermountain articulates it, “We’re brought together by our desire to preserve and restore health, and to help our patients live their lives to the fullest potential.” One might therefore describe Intermountain’s value proposition as, “care that helps patients live their lives to the fullest potential.”

Over the last three decades, Intermountain has intentionally evolved its mission statement, business model, and culture to enable its health-centric purpose, and the 1990s saw the first major strategic leap toward this end. “If you looked at our financial measures at that time, you would have to believe we were in the facilities management business,” recalled Dr. Brent James, executive director of Intermountain’s Institute for Healthcare Delivery Research. “That’s when we realized there was a big disconnect between the value we needed to deliver to our patients, and what we were paid and organized to do.”

To repair it, they analyzed more than 1,400 care processes to determine those having the biggest impact on the most patients. Then they spent over a decade building systems to capture the right data to manage and continually improve these–for instance, through development of new care protocols leading to healthier outcomes.

Concurrently, they began a shift away from fee-for-service payments, toward a profit formula that would reward, rather than penalize, improvements in care effectiveness. Counting premiums from Intermountain’s own health insurance plans, capitated Medicare and Medicaid payments, and bundled payments from commercial insurers, Intermountain estimates that upwards of 70% of its payments today are tied to the value of care delivered.

Intermountain took another strategic leap in 2014 to extend its capabilities (a type of resource) beyond traditional acute care delivery and into the realm of population health management. At the outset this entailed a new mission statement, “Helping people live the healthiest lives possible,” and comprehensive effort to shift organizational culture from a narrow focus on care quality and cost to a broader focus on long-term health and care affordability.

The new strategy subsequently included explicit agreements between providers, insurers, and patients to share accountability for patients’ health; redesigned governance and care processes enabling them to do so; and more robust preventive care and chronic disease management.

Enabled by the organization’s health-centric purpose, Intermountain’s care innovation and quality have been regularly recognized over the years by industry monitors including The Joint Commission and The National Committee for Quality Assurance.

As Intermountain’s evolution illustrates, a health-centric purpose takes significant leadership vision and determination to define, enable and sustain. But where it takes root, it’s a motivating force that permeates an organization from C-suite to the front line, helping individuals channel resources, processes and creativity toward understanding and overcoming barriers to patient health and well-being.

For more about healthcare innovation, see:

How Disruptive Innovation Can Finally Revolutionize Healthcare.

*Clayton Christensen is a trustee of Intermountain Healthcare

Rebecca Fogg

As Senior Research Fellow for the Christensen Institute, Rebecca’s research focuses on a number of critical healthcare issues ranging from business model conflict to changing demands on leaders and consumers.