Last week I had the privilege of speaking at the Leadership Louisville Center’s “2014 Best of Leadership Summit.” I spoke in a session called “A New School of Thought,” alongside Cathe Dykstra (CEO of Family Scholar House), Dr. James Calleroz White (Head of Louisville Collegiate School), and Dr. Kevin Cosby (Senior Pastor of St. Stephen Church and President of Simmons College of Kentucky). Each of us spoke, in different ways, to the theme of bringing new approaches to the problems of poverty, unhealth and lack of education that pose deep challenges to Louisville and to our greater American society.
I titled my own talk “It’s Personal: Innovating to Improve Education and Healthcare,” and intentionally bit off perhaps a bit more than I could chew in the 15 allotted minutes. My goal was to try to share something sort of shocking that I realized late in 2013, and have gained confidence in since: the last several quarters have been among the most exciting of my professional career. This surprises almost everyone who knows that I’ve spent most of this time on the implementation of Obamacare (and specifically health insurance purchasing exchanges) and on the oversight of public education.
Living and breathing the pressures and wrenching shifts buffeting the healthcare and education sectors have led me, somewhat to my own surprise, to great optimism. I believe that we are on the cusp of exponential, positive change. My aim during the summit was to give the audience a sense of what’s coming, what it might mean, and what attitude I hope Louisvillians will bring to the dance.
The gist of what’s coming, to both healthcare and education, is information technology — and specifically “big data,” by which I mean the collection and organization of information that gives us knowledge which was previously beyond human grasp. With that knowledge comes the potential to act to solve problems that were previously beyond our reach.
Here’s a simple big data example from a familiar company with important Louisville presence. Several years ago UPS combined its massive GPS database with information from vehicle fuel-efficiency sensors. The analysis identified 85 million miles of potential route changes. By acting on this insight, UPS cut fuel consumption by 8.4 million gallons, saved a bunch of money on gas and labor, and did this all without compromising customer service.
For perspective, it is 93 million miles from the earth to the sun. 85 million miles will take you to the moon 355 times, and get you around the equator 7.65 times with the “remainder.” That’s data in action on a systems scale!
Healthcare and education haven’t yet been upended by IT in the way transportation, media and so many other sectors have, but it’s coming. The sectors share important similarities that have delayed disruptive technology-driven change: each is driven by third-party payment structures that separate customer decision from financial impact, and each struggles with complex organizational structures and the absence of agreed upon standards. But each is under enormous pressure from angry citizens who have lost confidence that expenditures relate to outcomes, and from my perspective it looks like both are finally starting to scramble to catch-up.
The early stages of healthcare reform, driven by the blunderbuss of the Affordable Care Act, have been indisputably chaotic. However, amid all the howling about Obamacare, failed insurance exchanges, KentuckyOne (and nationally, other hospital systems) laying off hundreds of people, and costs continuing to rise like crazy, some powerful positive signs are emerging. I feel like the little boy in President Reagan’s joke about the muck-filled barn: I know there’s a pony in here somewhere!
The “pony” is that Obamacare, perhaps accidentally, has smashed the business models of insurance companies like Humana and forced them to innovate or die. This has unleashed a barrage of investment in data, analytics, and new forms of care. Two examples: (1) Humana has spent over $3.5 billion in the last several years acquiring new IT, analytics (including a piece of Google Health’s ecosystem), and clinical competencies – all in addition to filling many of the buildings around downtown Louisville with IT talent from around the world. (2) New companies like BenefitFocus and Castlight have created billions of dollars of capital out of the market’s conviction that healthcare really is changing — capital that can fuel this change.
So what will new healthcare look like? Some of it will undoubtedly be traditional—brilliant cancer specialists empowered by genomic knowledge to target drugs ever more precisely at not just “cancer,” but “your personally specific cancer.” But the most inspiring example that I saw in 2013 was not remotely medical in nature. Instead it put big data to use in social coordination.
Here’s how, in three “easy” steps that could never have occurred without big data: First, a powerful predictive modeling engine enabled a Medicare Advantage insurance company to identify frail, elderly beneficiaries in Miami at risk for falls. (As you probably know, falls in the home are one of the most common triggers of older Americans’ final decline that precedes death.) Second, home visits identified whether an elderly member’s shower was of the “step over the tub” variety. If so, the third step was a call to a community organization of retired carpenters who volunteer to install safety bars in the showers – sort of a twist on Habitat for Humanity. As a result of these three simple steps, hospital admissions fell measurably, paying for many more home visits and opening the door to all the relentless focus on eliminating falls that a big, powerful organization can bring.
I expect that the data will eventually show longer, healthier lives thanks to the human kindness of installing safety bars — powered by big data. This is where the magic happens – by taking the data directly to the person who can apply it and create a HUMAN result.
A second example relates to the national disaster that is the obesity epidemic. You all know the depressing statistics: 36% of American adults are obese (even higher in Kentucky), with the attendant risk factors for heart disease, stroke, type two diabetes, certain types of cancer, and preventable death. Some 70% of medical expenditures, which totaled more than $2.5 trillion last year, relate to chronic illness, mostly driven by obesity or smoking.
Big data, coupled with mobile communications (aka your smartphone) and behavioral psychology, will (along with education) solve this problem. We’re in the early days, typified by Humana’s Vitality program, of creating incentives and payment structures to motivate people to eat better and improve their lifestyle. Since predictable obesity-generated medical costs far exceed the cost of green leafy vegetables, the insurer, employer, or government program that pays your medical bills has a reason to invest in connecting the dots by subsidizing better food, teaching better eating habits, or whatever else it takes.
I have been engaged in education-related work here in Louisville and at the national level for years. Since joining the school board 15 months ago, one of the most important things I’ve learned is how much data Jefferson County Public Schools actually has about its own activities and effectiveness.
Last fall a report card from the state told us that, for the first time in memory, JCPS students in the aggregate achieved the system’s goal of making meaningful improvement across the board. This is an encouraging sign that Superintendent Hargens and her team are getting results from JCPS’ strategy. However, just as in the battles against the frailties of aging and the trials of modern food culture, we’ve barely begun.
There are, to be sure, encouraging signs of the transformation at the ground level — examples of data and new tech tools in use that remind me of IT-enabled cancer care. For instance, all over JCPS teams of teachers are poring over data to diagnose which student missed the point of which lesson, and are targeting interventions to get them back on track. I’ve also seen demonstrations of high school teachers leading classes of smartphone-wielding students through lessons with constant, personalized feedback on who gets it and who doesn’t, sending out to Khan Academy and other web sites for catch-up. All this makes my heart beat faster in excitement.
But when I look at data that shows 12% of JCPS students are homeless for some part of each year, that half of our five-year-olds are well behind when they get to kindergarten, and that in our worst middle schools barely 10% of entering sixth graders are proficient in math – AND THAT WE KNOW THE NAMES OF THESE SPECIFIC STUDENTS! —I know that data is not enough. We need that retired carpenter to put up a hand rail. We need more than teachers (just as in healthcare we need more than doctors) can provide.
Big data creates a sense of urgency and points out new arenas for innovative leadership to put our new tools to constructive use. But the data is not the magic; the magic is the ACTION that it makes possible.
In my healthcare world, this means that we need to be ready for healthcare exchanges to work, for most Americans to have access to understandable health insurance, and for the onslaught of the economics of standards and networks and automation that can transform healthcare delivery. Effective leaders will have to spend money to create health, probably before it’s proven to save money. I’m proud, in this context, that Humana has adopted an inspiring, even awesome, new enterprise goal: to improve by 20% the health of the communities the company serves.
In my education world, this means that we must invest in new teaching, recognizing that teachers’ shift from the role of dominant expert to that of caring motivator is a gigantic change. We’ll need to spend money on training, on support for choosing from the smorgasbord of digital content, and on a system of real feedback that tells teachers how they’re doing. We’ll have to pay for this investment by eliminating relentlessly the expensive trappings of the old systems.
But we’ll also have to confront the effects of poverty and family breakdown. In healthcare we pay enough to doctors and hospitals that avoiding their interventions can pay for big data-driven coordination, including social outreach. In education we don’t yet have a comparable model, but we can predict the cost in welfare, healthcare and prisons — not to mention foregone creativity and productivity — of having kids enter school three years behind. Big data has given us new knowledge; now we have to act on it.
I left the Leadership Louisville crowd with a call to action: Louisville must, and can, name and claim this problem. We can’t afford to ignore the data, to be a city that wastes its human capital on avoidable disease or ignorance. We can be smart big data users. And we must do our individual parts, taking the call and saying, like the volunteer carpenter, “Yes, I’ll come over.”