Recent studies suggest that at least 35%--and maybe over 5o%--of all health care spending in the U.S. is wasted on inadequate, unnecessary, and inefficient care and suboptimal business processes. But efforts to get rid of that waste face a huge challenge: Under current payment methods, the providers who develop more-cost-effective approaches don't receive any of the savings. Instead, the money goes mainly to insurers. The providers, who are paid for the volume of services delivered, end up actually losing money, which undermines their finances and their ability to invest in more cost-saving innovations. To address this quandary, say two top execs from the nonprofit Intermountain Healthcare system, we need a different way to pay for health care: population-based payment. PBP gives care delivery groups a fixed per-person payment that covers all of an individual's health care services in a given year. Under it, providers benefit from the savings of all efforts to attack waste, encouraging them to do it more. And though PBP may sound similar to the HMOs of the 1990s, there are significant twists: Payments go directly to care delivery groups, and patients' physicians--not insurance companies--assume responsibility for overseeing and managing the cost of treatment. Provider groups are also required to meet quality standards that further protect patients. By applying PBP in just part of its system, Intermountain, which serves 2 million people, has been able to chop $688 million in annual waste and bring total costs down 13%.
The United States stands at a crossroads in how to pay for health care. Fee for service, the dominant payment model in the U.S. and many other countries, is now widely recognized as perhaps the single biggest obstacle to improving health care delivery. A battle is currently raging, outside of the public eye, between the advocates of two radically different payment approaches: capitation and bundled payments. The stakes are high, and the outcome will define the shape of the health care system for many years to come, for better or for worse. In this article, the authors argue that although capitation may deliver modest savings in the short run, it brings significant risks and will fail to fundamentally change the trajectory of a broken system. The bundled payment model, in contrast, triggers competition between providers to create value where it matters--at the individual patient level--and puts health care on the right path. The authors provide robust proof-of-concept examples of bundled payment initiatives in the U.S. and abroad, address the challenges of transitioning to bundled payments, and respond to critics' concerns about obstacles to implementation.
Most leaders don't have the luxury of building their teams from scratch. Instead they're put in charge of an existing group, and they need guidance on the best way to take over and improve performance. Watkins, an expert on transitions, suggests a three-step approach: Assess. Act quickly to size up the personnel you've inherited, systematically gathering data from one-on-one chats, team meetings, and other sources. Reflect, too, on the business challenges you face, the kinds of people you want in various roles, and the degree to which they need to collaborate. Reshape. Adjust the makeup of the team by moving people to new positions, shifting their responsibilities, or replacing them. Make sure that everyone is aligned on goals and how to achieve them--you may need to change the team's stated direction. Consider also making changes in the way the team operates (reducing the frequency of meetings, for example, or creating new subteams). Then establish ground rules and processes to sustain desired behaviors, and revisit those periodically. Accelerate team development. Set your people up for some early wins. Initial successes will boost everyone's confidence and reinforce the value of your new operating model, thus paving the way for ongoing growth.
Companies today increasingly rely on teams that span many industries for radical innovation, especially to solve "wicked problems." So leaders have to understand how to promote collaboration when roles are uncertain, goals are shifting, expertise and organizational cultures are varied, and participants have clashing or even antagonistic perspectives. HBS professor Amy Edmondson has studied more than a dozen cross-industry innovation projects, among them the creation of a new city, a mango supply-chain transformation, and the design and construction of leading-edge buildings. She has identified the leadership practices that make successful cross-industry teams work: fostering an adaptable vision, promoting psychological safety, enabling knowledge sharing, and encouraging collaborative innovation. Though these practices are broadly familiar, their application within cross-industry teams calls for unique leadership approaches that combine flexibility, open-mindedness, humility, and fierce resolve.
Over the years, as teams have grown more diverse, dispersed, digital, and dynamic, collaboration has become more complex. But though teams face new challenges, their success still depends on a core set of fundamentals. As J. Richard Hackman, who began researching teams in the 1970s, discovered, what matters most isn't the personalities or behavior of the team members; it's whether a team has a compelling direction, a strong structure, and a supportive context. In their own research, Haas and Mortensen have found that teams need those three "enabling conditions" now more than ever. But their work also revealed that today's teams are especially prone to two corrosive problems: "us versus them" thinking and incomplete information. Overcoming those pitfalls requires a new enabling condition: a shared mindset. This article details what team leaders should do to establish the four foundations for success. For instance, to promote a shared mindset, leaders should foster a common identity and common understanding among team members, with techniques such as "structured unstructured time." The authors also describe how to evaluate a team's effectiveness, providing an assessment leaders can take to see what's working and where there's room for improvement.