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What Gets in the Way of Systemic Change?

by The Leadership Development Group

Improving population health hinges on the ability of organizations from diverse sectors to collaborate. In a recent survey conducted by ORC International and Change Healthcare, which included 120 payers across the country who worked with providers to integrate value-based models, nearly a quarter of them reported cost savings as high as 7.5%. Almost 80% of these payer organizations also cited the quality of care improved, while 64% reported better provider relationships, and 73% reported improvements in patient engagement.  A Commonwealth Fund analysis demonstrated that value-based models lead to fewer emergency hospital visits and downstream cost efficiencies relative to similar markets.

With such promising outcomes, we wonder why partnerships and collaborations aren’t increasing at a faster pace. The simple answer is that it’s tough work.  So, what’s getting in the way….


While most organizations within the health industry understand the benefits of collaborative partnerships to deliver on the triple aim of improving the patient experience of care (including quality and satisfaction); improving the health of populations; and reducing the per capita cost of healthcare, many find collaboration difficult.  

Outside of the health system, three environmental factors constrict the ability of health systems to begin the necessary transformation to meet these goals. These factors are discussed below:

1.  Lots of Talk, Little Action

When asked what is keeping payers and providers from entering into mutually beneficial relationships, Dr. Craig Samitt, CEO of Blue Cross and Blue Shield of Minnesota remarked “We’re good at admiring our problems…I’m not sure that the incumbents in the industry have been forceful enough or brave enough to pursue a lot of change.” Indeed, in a recent Change Healthcare survey completed by 185 healthcare executives, 17% indicated that they believe it will take five or more years for their system to make the switch to a value-based system, while 6% indicated that it will never happen. This perpetual state of delay prevents systems from acquiring new partners that may bring about creative solutions to common problems, and ultimately postpones advances in quality of care for the patient. In his 2015 article which covers the factors that are preventing transformation in healthcare, author Mark Britnell, chairman of KPMG’s Global Health Practice, suggests that myopia (nearsightedness) is one of three reasons providers and payers resist change. “Organizations tend to think they are basically good but the health system in which they operate is poor at supporting them.” A view of transformation which relies on the other party to change, will only result in stasis and further perpetuates the problem.

2. Giving up Control

Payers and providers have historically been at odds in the way data is collected and shared – with the underlying motive that data is power, and power is a competitive advantage. While addressing the need for payers and providers to share information, Dr. Samitt remarked “each of the key stakeholders work in silos, or in opposition. If we do share information, we need to share it for good, not for proprietary agendas.” Obstacles in data sharing, lack of agreement on outcome measures, and misaligned incentives for both parties to work together have thwarted collective efforts to deliver low cost and high-quality care.  In addition, both payers and providers seek to protect their data to retain privacy for their business and patients, but in doing so, both parties withhold valuable information that is key to speeding up throughput, reducing the cost of care, and increasing value.

3. Aversion to Risk

In a value-based model, providers are at financial risk for producing lower cost / higher quality patient outcomes.  In the same Change Healthcare study mentioned above, 58% of payers reported that they find it extremely difficult to generate interest among providers to engage in value-based models where providers would incur a great amount of risk. Studies on the topic consistently indicate that providers and payers have difficulty agreeing on risk/gain sharing or performance metrics. Josh Ofman, SVP of Global Value, Access, and Policy at Amgen commented that information-sharing may, in fact, be the key to change. “Priority demands more collaboration, more information sharing, more interoperability, and more integration. In short: more convergence.” The key to helping physicians, providers and payers improve quality of care and reduce cost may start with freeing up data where appropriate. 


A review of 35 research studies revealed two main factors that support long-term healthcare collaborative success within an organization, culture and leadership. For collaboration to take place, leaders have to relate to the need for it, be empowered to shape it, and, challenge the status quo.

1. Culture

Culture is defined as, “an interlocking set of goals, roles, processes, values, communications practices, attitudes, and assumptions that fit together as a mutually reinforcing system and combine to prevent any attempt to change it.” Cultural alignment between partnering organizations is a key factor to consider to ensure collaborations are successful.  Mohamed Diab, MD, former Vice President of Provider Transformation at Aetna, had this to say on the valuing the structural elements of collaboration  “When you bring two large organizations together around a common mission, it takes a lot of time to truly grasp the concept and understand what each organization is going to bring to the table. It’s important to look at the capabilities of each organization and collectively decide which services will be provided by each...”  Without alignment on these factors, work behaviors can be counter-productive resulting in a reinforcement of the status quo.

2. Leadership

Plenty of evidence makes it clear that individuals' leadership characteristics and behaviors influence the success or failure of collaborations. Leadership skills are necessary to promote healthcare collaboration among leaders and their teams, establish a supportive work culture, engender a sense of psychological safety, and promote a sense of fairness among employees.

While discussing the importance of healthcare leadership, Nicolette Sherman, Vice President of Global Leadership Development at Sanofi, remarked, “When working to align cultures, it’s really about identifying what is at the core of your culture – and where you are going. So, leadership competencies and values become very important, and making sure you have the voice of your people, as well as your leadership along the way.” This requires a great deal of communication within and across levels of a health ecosystem.

Creating the Conditions for Success

1. Engage in Collective Sacrifice

In order to create value and promote wellness, both payers and providers need to engage in disruption by driving reinvention across the health ecosystem. Commenting on the need to expedite this process, Dr. Samitt remarked, “We have to look at alternative models that challenge ourselves to do better and be more distinct…. we believe that getting bigger will make us better, but getting better will make us better.” To make the leap out of the suspended conversation on improvement that has not made much progress, Dr. Samitt directs healthcare leaders to look to companies in different industries that have managed change well, and to do so with the customer in mind at all times. As healthcare leaders work toward their vision of collaboration, both payers and providers will need to take on short-term loss to invest in solutions that optimize value for the consumer down the road – a term Dr. Samitt deemed as “collective sacrifice".

2. Embracing Risk

By their very nature, new partnerships carry with them risk.  For an industry that is risk avoidant, providers, payers, and others need permission to be innovative and a safety net to fail when new ideas don’t work.  Commenting on the need to embrace risk during a podcast with TLD Group, Dr. Steven Klasko, CEO of Jefferson Health said, “How do we change the paradigm of how people look at care? We’ve gotta think globally about improving the health of our community. In a shared model, we need to ‘share resources so that people aren’t disincentive to cling to an old system, especially if that’s the only way they can see themselves making a living…the key is being honest that change inevitably will happen, and we need to prepare our ourselves for that.”

Starting small is a great way to do this. Providers can begin by identifying where they can provide service that delivers equally high outcomes at the lowest cost. Changing practices that have a minimal effect on operational costs are the best areas to test change; processes that have material impacts on quality of life, quality of outcome, and total cost of care, but are small and manageable.

3. Cultural Alignment

When workforces are aligned, there is a stronger likelihood of achieving healthcare collaboration goals.  When asked what an organization can do to support collaboration during times of change, ReThink Health President, Laura Landy remarked, “It’s how people talk one on one and how they build relationships….When people have a co-dependence it’s possible for them to create structures so they can come together and cooperate.” Identifying and leveraging co-dependencies (the same goals, objectives, or ‘means to an end’) is a common strategy Landy uses to build stewardship and create a shared vision that people can rally around.

We offer the following for leaders beginning to address systemic change efforts in the health ecosystem:

  1. Identify the vision of the partnership and the underlying competencies that the organizations will need to achieve it.
  2. Identify specific skills and behaviors that should be exhibited by everyone from senior leaders to frontline employees to support the competencies.
  3. Reinforce the shared culture with a collaboration operation model — change the structure, accountabilities, governance mechanisms and ways of working where needed

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