The Black Liszt

Category: Innovation

Healthcare Innovation: EMR’s and Data Quality

Tens of billions of dollars are being spent to implement EMR's in healthcare. There's still a long way to go. Everyone seems to agree that EMR's will make things better than they were with paper. But it's hard to imagine that things will be better if the data is incomplete, inconsistent, and simply wrong.

The big strategic thinkers and powerful people who push EMR use ignore this issue. I guess it's a detail, beneath them, unworthy of their notice. But for anyone who lives in the world of software, numbers and math, data quality is the foundation on which everything is built. Ever hear of "bad data in, bad data out?" It's true!

I can run some personal tests on this issue because I'm being treated for a kind of cancer at one of the world's best hospitals, Mount Sinai. I'm getting excellent care and doing well. Mount Sinai is completely up to date with EMR's. It's clear from my experience to date that my excellent care has nothing to do with the EMR — arguably, the good care I'm receiving is in spite of the EMR.

Let's look at some details. I recently waded through the hospital website to access my medical records. If whoever designed the website had tried to make it difficult for patients to access their records, they couldn't have done much better.

I finally managed to get a PDF for an encounter. The document makes clear that the hospital's computer graciously deigned to share information with me, the patient:

The document makes equally clear that information is missing. What information isn't here? We have to guess. What an attitude.

Think of an incredibly unpleasant, arrogant class of professionals. What did you come up with? My guess was lawyer. Even with lawyers, when you fire them and request your files they give them to you, minus snarky notes about how things "may be" missing.

There was a section with my name and address. Also how to communicate with me:

They included the identical number for Home and Mobile. You think the computer could have checked for that? This is one of the fatal flaws of the whole EMR approach: the patient is barred from entering and/or correcting his own data! In a sensible, modern system, I would have received an email or text asking me if this information was correct, and asking me to correct it if it's not. But an Enterprise EMR system with layers of security, bureaucracy, administrators, regulators and lawyers involved? Maybe next century.

Now we get to my meds. Here they are. Notice anything?

You may notice that information is missing from the second drug, losartan. What I noticed is that the dosage is wrong. What I have actually been prescribed is 100 mg tablets. This record is from the encounter with the cardiologist who prescribed the drugs! If it's wrong, anything can be wrong!

In my case, it makes little difference, since I'm on top of things. But not everyone is so fortunate, and this is just the kind of error that could, with a different patient and drug, have awful consequences.

Now let's look at my "social history."

It's wrong too. And I'm not allowed to correct it. If I did use alcohol, it's missing the amounts. But I don't use alcohol. If it were correct, it would be incomplete; but it's incorrect.

Finally, let's look at my plan of care:

An appointment. But that's wrong too! The appointment I actually have is for a diagnostic procedure, not what's written here, and the follow-up with the doctor is just missing.

Bad data wrecks everything

You want benefits from Big Data? Nothing good comes from data that's bad, no matter how big it is.

There is very little data exchange among EMR's, in spite of all the tens of billions of dollars that have been spent. Here is the latest stat from the government:

Do you think that's bad? In principle I think it's bad, until I consider all the inconsistent and incomplete piles of crap data that's sitting out there in EMR's. Then I think of the lack of interchange as being more like keeping the bad data in isolation so it doesn't wreck anything. And who's allowed to fix it? I'm certainly not allowed anywhere near it, even though it's my data.

Conclusion

What's the solution? Make health care providers spend even more time bent over computer screens than they do today, which is already excessive?

The core problem is that our whole approach to hospital, health care and provider automation is rooted in the ancient approach to "enterprise software" that was created in the days of mainframes, and lives on in the incredibly expensive, ponderous and user-hating world of modern healthcare IT. The data will become accurate, complete and high-quality when the systems are built correctly, using modern techniques, and when they interact with all concerned parties — including patients!! — to get their jobs done.

June 7, 2016
Innovation: From Startup to Success
I've recently published a book whose subtitle will soon become the title: "From Startup to Success." It's a tiny voice in the hurricane of books, conferences and attention paid to Innovation. Anyone doing something new that somehow involves computers and software would benefit by paying attention to this book. It identifies success patterns that aren't found elsewhere.

Software-fueled Innovation

We currently benefit from more than 150 year's worth of general-purpose innovation. Trains, planes, cars, phones, refrigerators, prepackaged ice cream, etc. The innovations are now a broad array of products and services offered by major organizations. You go to business school to learn how to run and staff such organizations.

A sizable fraction of today's innovation is built on and using computer hardware and software: the internet, smart phones, Amazon, Google, Facebook, Uber, and a host of others. The new generation of innovation is software-fueled innovation. It's still innovation, but it's different because of the software.

Software makes it different

Airplanes were invented by the Wright brothers, who were experts in bicycles. Anyone could see everything important about the device they built, and even basically understand it. The same holds true for all the innovations up to and including early computers: you could see the card readers, the plugs, and the vacuum tubes. But then things got tough.

Once complex circuits could be built on a chip, you could see the chip, but not the millions of electronic devices on it. Even worse, you can't see the software that may process billions of instructions on the way to getting something done. You can view the "source code" of a piece of software, but how many people can read it with understanding? Software has piled up over the years, so that today, new software is built on the foundation of millions of lines of code that is in older software, the foundation without which the new software could not operate. Even most modern software "experts" have never seen that code that's "under the surface" of what they write. They don't understand it and couldn't write it themselves.

Software is a new world, invisible to the majority of normal people, and only partly visible to the vast majority of people who call themselves programmers. Software is a new world, and startups that are fueled with software have new rules for success. Well, not entirely new rules. But they're different enough that most startups don't understand them. Why? No one is teaching the rules of success for software-fueled startups — least of all business schools!

That's why I wrote the book. I don't know all the answers. But I have figured out a bunch of them from twenty years of closely examining software-fueled startups, partly as a programmer, but mostly as a technically-oriented investor.

Applied common sense

Many of the things I point out in the book sound like simple common sense. But it's not common at all. For example, "solve a problem a customer knows he has" sounds like the dumbest of not-needed advice. But in practice, it's one of the least-commonly-followed dicta you can imagine! Here's an excerpt from the book on that subject.

Solve a problem the customer knows he has

This one is so obvious it may sound like a joke; why would a company try to sell a solution to a problem a customer doesn’t know he has? It sounds insane! But it happens over and over again.

People who come up with new things are often pretty smart. They tend to be imaginative, and see past the here-and-now. They can create abstractions easily, and find the commonalities among apparently unrelated things. They’ll see an obstacle or limitation in a business, or a way to make it much better. They’ll put together a way to remove the obstacle, overcome the limitation or implement the enhancement. They will typically be pretty excited about what they’ve accomplished. Then they’ll try to sell it, get frustrated, and before long they’ll be venting about stupid customers who can’t see past their noses, who will refuse an offer to pay a dollar to get five in return and who are otherwise mentally damaged. This is the typical result of solving a problem a customer does not know he has.

The problem and the solution may be clear to you, with your skills and ability, and having walked the path of analysis and understanding that you have. But is it clear to the average customer, without either injecting him with brain-enhancing drugs or putting him through a multi-week education course?

Should you be smarter than your customers? Maybe. But if you are so far "ahead" of them that you insist on selling them a scratching service for an itch they don't feel, maybe you're "too smart," and should get over it.

This is one of the dozens of things that are obvious in theory, but hard to get in practice. The book has lots more.

Common sense that doesn't work

On the other hand, there are some widely accepted practices that are sure-fire ways to fail at a startup. Here are a couple that are described in detail in the book:
- Understand the market. Bad idea. The "market" is what is there today. You're building something new.
- Make your tactics match your strategy. One of the worst commonly-accepted notions. It seems to make sense, but it leads to failure.
- Assure that you have a sound strategy. "Strategy" is a time sink that sucks valuable resources away from the effort to win. "Step Theory" (read the book) explains why.
Conclusion

I've had an insider's view of hundreds of software-fueled startups over multiple technology cycles. One of the most striking things I've learned is the winners do things the "wrong" way in the eyes of most experts. That's how they win! Of course, it's got to be the right "wrong" way that wins, not just any old wrong way; there are plenty of wrong ways that are losers…
May 31, 2016
Healthcare Innovation: EMR Procurement is Broken

Computers and software get faster and less expensive at a dramatic rate. Healthcare systems implementing computers and software gets slower and more expensive at a dramatic rate. Why is buying the thing getting so much worse at the same time as the thing being bought is getting so much better?

There is only one explanation: the procurement process used by the large organizations is broken. Badly. It doesn’t need “improvement” or “innovation.” Today's standard procurement system needs to be thrown out. We need to start over.

Improving Computers: Incredibly complex, successful

It's just unbelievable how much better, faster, smaller and cheaper computers get. The rate of improvement is unprecedented in human experience. Nothing comes close.

Even software that used to be unavailable or expensive to buy is free! Think "open source," for example.

Procurement of computers: Basically simple, a worsening mess

Most large organizations are just awful at building, acquiring and implementing computer hardware and software. It's not getting better.

How do these organizations respond to their screw-ups? They look closely at what went wrong, "improve" the process … and make it even worse.

Back to paper

Organizations really try to make it work. The US Coast Guard, for example, embarked on a project to plan the implementation of a leading EMR in 2010, and committed $14 million just to do some planning. Six years later they cancelled it:

They knew something was really wrong, not just the usual wrong stuff. You know things are tough when they go back to paper:

On the other hand, they can provide all the health services their members need with paper alone! Tells you something about today's EMR's, doesn't it?

New York City's HHC EMR procurement

NYC's public hospital system is big. They're also a pioneer in using EMR's. They've won awards because of it, and gotten $200 million from the feds for achieving full "meaningful use" status with it. They go way beyond just electronic recording; they manage diseases, do screening, and lots of advanced things. See this from a January 2013 HHC press release:

By their own report and by the judgment of important institutions, HHC has this EMR thing nailed!

HHC has bigger problems than EMR. It is in big financial trouble, and it's getting worse. See this report from late 2013:

They've got an industry-leading, award-winning, value-enhancing, WORKING EMR, and huge financial troubles. Sounds like an ideal time to buy a new, system-wide EMR, right??!!

Well, that's what they did. In same early 2013 press release in which they bragged about their wonderful existing EMR, quoted above, they announced they were buying a new one:

A close reading of the press release leaves one wondering why they had to have a new one: the touted wonders of the new system line up pretty well with the wonders of their award-winning existing system. I guess they really hankered after that new-EMR smell. And with the big award from the feds, $200M of the $302M is already paid for, leaving just pocket change to pay for it!

But then, less than a month after this press release, HHC issued an RFP for extensive additional services. Here is a list of the consultant skills they wanted to hire:

Strange. I got the distinct impression from reading the press release about getting Epic that the $302 million covered everything. What's this about?

The July 2015 board meeting of HHC had an update on how things were going. Things weren't working out too well on the cost side; those numbers are millions, by the way:

Wow. Just a bit more that $302 million. Digging a little further in the Board minutes, we find a little about the $113 Million. Here's the summary:

Or maybe not — this $119 million is for consultants, not FTE's, and it's per year — the surprise on-going cost of getting that shiny-new-EMR-system smell into the hospital! And you have to notice that 20 vendors will be awarded contracts — because everyone knows that having lots of temporary people from lots of vendors working on a single project is the proven way to maximize coordination and minimize surprises. Sure.

Oh well, at least things are "under control." Or maybe not. Just a month later, in August 2015 we learned:

And the dates? Let's talk about something else, because "full operation by 2017 for all users" is history, along with the $302 million cost and lots of other things for this troubled system.

Conclusion

HHC is a nice, big, fat example — but it's not unusual. This is what EMR procurement is like, over and over again. The buyers just keep shuffling ahead to the painful and prolonged slaughter, like cattle. Few organizations are as smart as the US Coast Guard, and decide that paper is just fine. Big-organization procurement in general is broken, and EMR procurement in particular is badly broken. Every attempt to "fix" it seems to make it worse. The procurement process needs to be thrown out. We need to start over.

But start over with what? I will summarize how in forthcoming posts. But it's not mysterious. It's just an application of the proven methods described in my books and summarized in various posts on this blog.

May 24, 2016
Healthcare Innovation: Can Big Data and Cognitive Computing Deliver It?
Most people seem to agree that healthcare is ripe for innovation, and badly needs it. Lots of people are talking up two potential sources for that innovation: Big Data and Cognitive Computing.

I'm strongly in favor of data, the bigger the better. But is the Big Data movement going to make a difference? I'm strongly in favor of cognition, computing, and computing that is smarter rather than dumber. But is the Cognitive Computing movement likely to make a difference? Here's a summary of some thoughts.

Process Automation and continuous improvement

Here is a description of the core process automation process implemented by a company I've invested in, Candescent Health. It describes the process that can and should be applied to all of health care.

The point isn’t that there’s data and analytics – the point is that there’s a closed-loop process of continuous improvement where actions are based on rules. This is the framework that is required to make anything happen. Without it, you can’t put your proposed new clinical action into practice with double-blind A-B test and see if the results of your analytics actually deliver benefits in the real world! Or even just deploy it!

How about just making the basics work?

Here is the story illustrated by Mt Sinai hospital about how everyone focuses on “innovation” and fancy new things, when just having the computer systems run reliability has a huge impact on patients – and unless those systems run, the results of fancy new analytics can’t be delivered to benefit patients.

If the car won't start or run reliably, who cares how good the fancy sound and navigation systems are?

How about making the computers work?

I love data and analytics. But doesn’t it make sense to focus on getting the operational computer systems to actually run well before moving on to the fancy stuff?

Paying top dollar for computers doesn't make them work

In fact, just about anything you do with healthcare data that is going to be brought to the front line of care requires functioning computer systems to be able to pull off – the big healthcare systems pay Greenwich CT prices and get trailer park results.

Clean data isn't easy to get

Both data warehousing and the fancy new Big Data movement share the under-appreciated problem of getting good quality data in analytics-ready form. Sounds simple, but the difficulties make progress a grinding crawl on many efforts. See this for example.

Big data sets tend to have Big problems

Massive data sets have built-in problems that make it hard to get actionable results.

AI: How about under-promise and over-deliver for a change?

Skepticism about Cognitive Computing in health care is warranted. There is a rich history of over-promise and under-deliver for AI efforts in general.

Real-world solutions waiting to be automated

Meanwhile, there are proven gems in the medical literature just waiting to be disseminated to the front lines of health care via point-of-care computer systems that are languishing in journals.

What can make a difference?

There are lots of practical, tangible ways to make things better, in spite of all the obstacles to change pervading our healthcare system. Here are some examples of people doing the right thing, all them with investments by Oak HC/FT:
- Candescent delivers better imaging results with less expense by applying basic continuous-improvement workflow automation.
- VillageMD delivers better results with lower cost by feeding back results and advice to PCP’s.
- Aspire delivers better results at lower cost for end of life – by having one person be in charge, managing everything from the patient point of view.
- Quartet makes a difference by applying behavior health as needed to help other conditions.
These companies embody some common themes:
- Knock down the silos, have a patient-experience-centric point of view.
- Applying common sense has huge benefits.
- Focus on delivering results to the front line (patient) is hard but necessary.
- A system of continuous learning and delivery is a pre-condition to delivering any results of analytics for patient benefit.
Conclusion

The big hot topics in healthcare of Big Data and Cognitive Computing are little more than fashion statements. Data, of course, is a good thing; so is having computers do smart things. But without doing some basic blocking-and-tackling and applying some practical common sense, a great deal of time, money and energy will be spent accomplishing nothing.
May 17, 2016
Innovation: Some History
"Innovation" is an innovation — it's a new thing that loads of people think it's important and something we should pay attention to. The Chief Innovation Officer is the most recent addition to the CxO suite.

Someone other than me should write a history of "innovation," fully explaining how we got to where we are with it. I've contributed two or maybe even three cents to the effort. I'd like to go back a century or so and explore some of the fertile soil out of which modern "innovation" grew.

What is Innovation?

Just last year, you could have spent a whole week learning about innovation from the best and brightest:

During that week, here's some of what you would have learned:

See what you missed? Not just regular innovation, but "game-changing" innovation; innovation that "generates new ideas" and "executes new solutions." Hadn't thought of that before: innovation can "execute" solutions, and "new" solutions, at that! This Innovation appears to be an "essential skill" of leaders who have the "desire to transform organizational processes and behaviors." Wow.

This is big. What's the core idea? It appears to be coming up with "new ideas" and acting on them.

The roots of Innovation

People have been doing new stuff for a while now. Make a list of the things that have been invented in the last two hundred years, and when your hand gets sore from writing, let me know. However strong your hand, you're likely to run out of strength long before you run out of things to add to your list.

So why do we need to beat the drum and add yet more to the overhead with CIO's and the rest?

The reason is simple:
1. People resist change
2. Organizations resist change
3. Big organizations resist change in a BIG way.
We've been through this. It's a well-understood idea, thoroughly grounded in human psychology. It's not just that psychologically, people resist change. It's that they are highly incentivized, even rewarded, for resisting change. If that sounds strange, you should check out books like the Innovator's Dilemma.

We can learn a couple important things from organizations that were terrifically innovative at the start:
1. They were started by unusual, driven people, often education drop-outs, who never took a single course or seminar in innovation, much less business education. See this and this.
2. Once those amazing organizations grew to become leaders in their field, they almost always stop innovating! But they know they need it, so they acquire what they can't create. See this.
Large companies figured this out a long time ago.

Here's an attempt at H.J. Heinz around 1909 to solve the problem:

Yes, it's a suggestion box.

Why have a suggestion box? It's anonymous! The person who has the feedback or the great idea can make it without fear of punishment or retribution. That's absurd, perhaps you say! Why would anyone in authority punish someone who makes a suggestion for improvement? Try it sometime. Just make sure that your suggestion goes against the "common wisdom" at your organization.You'll see.

The impulse to foster what is now called innovation has been around for a long time. It's a bubble phenomenon now, but some form of it has been bubbling along for centuries. "Change," like motherhood, is judged to be a good thing, unless and until it's you who have to change, and the change isn't in your favor. That's why real change mostly comes from upstart people who create upstart organizations.

Conclusion

The well-intended suggestion box of past centuries was an attempt to solve a deep-seated issue with people and organizations. It has morphed into the modern innovation movement. You can expect results that are every bit as stunning as those well-known new things that came from pieces of paper stuffed into suggestion boxes. If you still insist on change that works, see this.
May 10, 2016
Organizing for Successful Innovation: Recent History
One of today's hottest trends is fostering innovation. It's real important! There are books, conferences, certified experts and all sorts of things. Let's do two things: (1) look at the origins of today's acknowledged tech leaders; and (2) see how those tech leaders innovate today.

The origins of today's tech leaders

What would we find if we looked at the origins of some important organizations that took the market by storm, grew rapidly and became part of the modern landscape? Did they come from people following the popular methods for fostering innovation? Let's look at some big, successful tech companies, and find out how they got started. There are two possibilities:
1. It came out of some large organization that followed modern innovation methods. Or its founders were avid readers of books on innovation, certified innovation trainers, attendees of innovation conferences, or otherwise showed that they were nurtured by innovation thinking.
2. It was started by one or two people who set out on a mission without any of #1 and kept marching forward until they got it done, perhaps with the help of VC's (venture capitalists).
I've already discussed the cases of Microsoft, Facebook and Oracle here. Their founders not only lacked training in "innovation," they were all college drop-outs! How could they have possibly founded three of the largest, most successful and valuable tech organizations? Must have been luck, I guess.

Maybe they're the exceptions! Maybe most of the rest fit comfortably into the mold of #1! Let's look at a few:
- Apple. Jobs and Wozniak. College drop-outs.
- Amazon. Bezos. Princeton grad, worked in finance, hedge funds. Jumped on a vision.
- Dell. Michael Dell. Started in his dorm room, dropped out.
- Google. Stanford grad students, dropped out. VC backing.
Why all the college drop-outs? In each case, a founder who was already obsessively good at something saw a related opportunity (sometimes with a buddy), dove in to make sure he didn't miss the opportunity, and made it more important than anything else. Including "education."

A pattern seems to be emerging here. It's not looking good for theory #1.

How today's tech leaders foster innovation

Now that these companies are big and successful, surely they are great at innovation, right? They must have certified innovation experts just crawling the halls, and a good fraction of the staff out attending innovation conferences, right? They must be just cranking out innovations left and right!

They try, in various ways. But it turns out that these great companies aren't any better than any other large organization at innovating — and you can see it by all the acquisitions they do! They have HUGE resources — how could some scrappy bunch of nobodies possibly come up with something they couldn't invent themselves?

Well it happens. It's happening right now, in AI. Look at who's doing the acquiring:

Facebook alone has made more than 50 acquisitions, most of them since 2010.

How about Google, who are supposed to be the smartest and most innovative of all? They've acquired more than 180 companies. Someone figured out the ten most expensive buys:

And the grand total is …

Now, that's innovation for you. Just ask your boss for a multi-billion dollar budget, and you'll be able to innovate like Google!

Until then, remember, there really is a better way to approach making your company better, even if it is unlikely to win any awards for "innovation."
May 3, 2016
The Innovation Bubble

We're in the middle of an innovation bubble. "Innovation" is hot. Innovation "experts" are coming out of the woodwork. Everyone wants some innovation. If you're not "fostering innovation" you're hopelessly outdated.

Some people say you need teams for innovation to take place. As a responsible manager, it's your job to foster innovation in your teams. Here's one of the books you can read about how to do it:

"Leadership" is a timeless favorite. Naturally, if you're an excellent leader, part of what you do is make innovation happen. Here's one of the books you can read about it:

Maybe you're not a big reader, but want to make sure innovation happens anyway. You can go to conferences, world-wide ones even:

What if you really want to get serious about innovation; how do you do it, after all? The good news is, it's not at all mysterious! You can go to school and learn all about innovation:

If you're an executive, you can take some time off and learn about it too.

Maybe you're having trouble breaking through. It could be that the missing ingredient is certification. Hmm, let's Google it, and see if any places can help out:

After all, you can say you're a great innovator, but without an official certification, why should anyone believe you?

Lots of people are doing it, even people with MBA's:

If you're really good, maybe you can become a CIO — no, not a chief Information officer, a chief INNOVATION officer. And then, if you're really good, maybe you can attend a round table:

What if you want help fostering innovation inside your organization? There are prestigious places just waiting to help you out — it's their business, and you may not be doing it the right way:

It's probably too late, but it would be a shame not to at least try to catch up with this innovation thing. An awful lot of people seem to think it's the best thing ever.

Of course, there are a few lonely voices saying this innovation thing is just a fad. They seem to say that if you want real innovation, there is a simple way to get it. They're probably just whiners who ignore the experts, and don't want to take the trouble to read a book, attend a conference or get certified. Too bad for them.

April 26, 2016
Fintech Innovation: the Drivers
What are the underlying principles driving innovation in Fintech? The same, identical, unchanged principles that drive innovation of tech in general. Nothing new! It's just applied to Fin.

We all know what those principles are. We've become used to them as wave after wave of improvement washes over the devices and services we use every day. In normal, physical things the changes are dramatic, going from literally using horse-power:

To steam-powered engines on rails:

To jet-powered planes that fly us in the sky:

Compared to last year, things get: faster, cheaper and better. That's it!

But when electronics and software are involved, as they are in most of fintech, the rate of change is even greater. That's why most of the disruptive changes we see in fintech are little more than fintech catching up with other sectors that have pioneered and are already using the technology. Like for example, "gee, people seem to like their smartphones. There are an awful lot of them out there. Maybe we could figure out a way to put the tech in fintech; maybe build an app or something?!"

What this amounts to is simple in principle, though often challenging in practice.

So how does faster, cheaper, smaller/better underlie innovation in fintech? The main ways include:

Replace physical objects large and small with digital

This reduces cost and speeds things up.

Devices instead of places

Don't go to a place (which is expensive to build/buy, maintain and staff), use your computing device. Call up the specific banking-like function you want on your device, and get your job done, right now. Consumers prefer it because it eliminates travel time, wait time and hassle. For example, money transfer with Abra:

Replace people with data and algorithms

This reduces cost and speeds things up. Consumers prefer it for the same reason they'll use an ATM even when human tellers are available. Don't make an appointment, get dressed up and see the loan officer at the bank; enter your data in the loan app and get an immediate decision with immediate access to the money. For example:

Summary:
- Use the device you have to get the job done.
- Eliminate the man in the middle; no people.
- Digital beginning, middle and end.
Result: faster, cheaper, better!
March 8, 2016
Healthcare: Problems and Opportunities

The US medical system is the best in the world, by the simple measure of patients voting with their feet. How many US patients flee the US so they can enjoy the superior medical care in other countries? How many foreign patients come to the US in order to benefit from the superior medical care available here? This simple measure allows you to cut through the rhetoric and find the truth: instead of listening to what people say, watch what they do.

The US medical system would also benefit from radical change. It is not nearly as good as it could be. It’s not lacking new ideas, or more of the currently fashionable “innovation;” it needs to apply methods, systems and technology that are proven in wide-spread application in non-medical applications, suitably adapted for medical use.

I’ve already hit on a couple of juicy subjects in this blog. But they only scratch the surface. Here are some of the things I’m thinking about and will be blogging about.

Financial technology and healthcare technology

Both are heavily burdened by giant organizations, heavy regulation, ancient and expensive IT, and deep resistance to anything but surface change. But fintech is in a renaissance of game-changing innovation, while healthcare is a laggard by comparison. What’s this about? One simple example: in finance, when I applied for credit 30 years ago, I went to the bank and was subjected to an interview by a bank officer, who personally determined my credit-worthiness; today, complete automation yields better results with less time and cost. In healthcare, when I have disease symptoms, I go to a doctor who makes a diagnosis and recommends a treatment. It was the same 30 years ago, only now there's much more overhead typing stuff into computer systems, mostly for the benefit of various bureaucracies.

Drug discovery

In drug discovery, there is a huge gap between what we are capable of and what we let ourselves accomplish. As usual, regulations and bureaucracy impose expensive and outmoded barriers, resulting in widespread preventable deaths.

Innovation and best practices

There is a natural tension between assuring that patients are treated according to best practices, while allowing for innovation and expert adaptation. Our methods for resolving this tension are sadly deficient compared to non-medical fields.

Bad science

You would think that as a science-created and science-dominated field, there would be only the best science in medicine. Sadly, this is not the case. There is shockingly bad science at both the detail level and the global level.

Training and credentials

Healthcare is filled with extensive training requirements, certifications and tests. These are accepted as part of life in the field. Some of the credential requirements are well-intentioned — but others are little but thin veneers of good intentions on top of a pile of self-dealing, and often make things worse for patients.This is best seen by comparison to other countries and other fields.

IT

The level of IT implemented at an average e-commerce website is, in general, vastly superior to the IT implemented at the very best medical institutions. On multiple dimensions, including cost, effectiveness, quality, and level of automation. If done well, excellent IT could be the foundation of a revolutionary wave of excellence in healthcare delivery and continuous innovation.

Conclusion and disclosure

I’ll be addressing these issues and more in future posts on this blog. But I’d like to emphasize: I’m taking the trouble to write this stuff down and make it available because it’s what I really think. I’m proud to be part of a partnership which invests in and supports leading-edge groups that are trying to change healthcare for the better, and I may refer to such companies in the future as I already have. But these posts and thoughts are promotional only in the sense that they promote concepts and practices that would raise the game in healthcare for everyone concerned.

December 15, 2015
Fundamental Innovations in Software

As a result of the decades I have spent working on, in and around computers, I have learned many things from other people, from books and talks, from studying the results of other peoples' work, from trying to accomplish many things in various ways myself, and from following the course of many projects and products over time. During this period of time, the computer industry has changed dramatically in many ways, and not much in some ways.

Most of the knowledge and insight I have gained from this effort over time match well with those of the industry as a whole. However, there are major subject areas which I have observed don't get much attention, or need major innovation. Here are some of those areas.

Quality

A good deal of attention has been paid to the quality that results from software development efforts. Products have been built to automate various aspects of the quality process, and there are techniques frequently incorporated into the software development process intended to assure good quality results.

However, it is clear that there is a tremendous opportunity to enhance the quality process. There are conceptual and technical advances that can be applied to the quality process that greatly improve the results of software development and reduce the time and effort to attain those results. While it is likely that there are situations to which the optimal techniques do not apply in part or in full, it appears that they are applicable to most software development projects.

Optimal results

There are a few areas in computers where people focus on measures of goodness and generally agree on what those measures are, for example, total cost of ownership. But the concept of the best possible result in theory, comparable to Shannon’s result in communications, is rarely applied in computing. Yet, there are a number of areas where it is applicable and useful.

Similarly, in computer hardware, people frequently reach a consensus concerning the “best” way to implement a certain feature, whereas in software development tools and processes, the thoughts about the optimal way of doing things evolve slowly, but rarely reach resolution. Moving beyond advocacy and thinking about what is truly optimal and how to attain it is very fruitful.

History

Software development is a field that pays remarkably little attention to history; everything is now and the next best thing. But in fact, a study of history in this field is very rewarding, because just like in real history, you find that some thing truly change, some of them extremely slowly and a few rapidly; and that other things go through recurring cycles. Knowledge of this history is interesting in and of itself, just like “real” history, and also enables you to predict the future within reasonable limits by extrapolating the patterns.

Application and systems software

If you look at every line of code that is executed in order to run a program, the lines fall into various categories, including systems software, standard libraries and applications. The “line” between these has been moving “up” very slowly over the last few decades. This glacial trend has impacts on operating systems, databases, application development tools, and related subjects. Understanding and exploiting this trend is a target-rich environment for innovation.

Abstraction levels

When we notice things repeating in computing, we build a level of abstraction to encapsulate the repetition and then work at the level of abstraction. Each abstraction is something that has to be built, adopted and learned, and because of these obstacles (and in spite of the benefits), abstractions propagate slowly. Some are so hard for most people, like those involving real math, that they can only be used by hiding the complications from practically everyone. Exploiting abstractions can lead to huge advances.

Closed loop systems

The concept of running an automation system “open loop” vs. “closed loop” is widely understood. But I find that few computer systems are run closed loop. Even though this is not exactly a novel concept, most people who work on building or operating the systems seem to be unfamiliar with it.

Workflow systems

The concept of workflow has been around for many years, and many systems have been built that embody the concepts. However, most people that I encounter seem not to understand the abstraction, and no good tools have appeared to ease the path to implementation.

Application Building Methods

The biggest, fattest target of all is the project management style of organizing and managing software projects. I have written a long book dissecting the theory and practice of applying otherwise reasonable project management techniques to software, and another one outlining the alternative approach. The larger the organization, the more likely software is going to be built the bad way. When software is built quickly and well, it is most often built in smaller organizations that are working under some kind of severe constraint. And of course, there are people here and there who simply have figured out better ways of building software, and just do it.

Understanding the People

Athletes are special people — they're people like everyone else, but the outstanding ones are different in important ways. To encourage them to do their best, you have to understand those differences and act in appropriate ways. Same thing for software. HR people, general managers and everyone else applies the same template to software people they apply to everyone else. They emphasize the commonality and ignore the differences. This is why, in general, management of software people is inexcusably bad. I've written a book about this.

Summary

Each of the subjects mentioned here could be a book; some of them are the basis of whole innovative companies. They're not just theoretical. Exploiting some of these subject areas can lead to rapid tactical execution benefits in organizations that build or use software.

June 16, 2015
An App to Prevent Train Crashes like Amtrak Philadelphia

Innocent people taking a train are dead. Many are injured. The government had an answer in 2008: spend billions of dollars and wait for years. There's a better answer: Build a smartphone app, with some cloud software, a couple sensors and cameras, and engine cab remote-control harness. It would be faster, cheaper and more effective than the existing partly implemented "solution," and lives would be saved.

The Crash

Here's the story of the crash in a nutshell:

Eight people were killed, and 43 still hospitalized days later.

Reactions to the Crash

The basic reaction has been typical all-politics-all-the-time. Here's the Reuters story:

Later in the same story, you learn that the engineer was driving at more than twice the speed limit for that part of the track, and that the accident would not have happened except for his error. But that's a detail, I guess.

Technology Could Have Prevented the Crash!

Then it turns out, we know how to prevent things like this! But according to the experts, it just hadn't been installed.

This PTC ("positive train control") sounds like wonderful stuff. It turns out it's been around for awhile. Everyone seems to agree that it would go a long way to solving the problem of crashes like the Philadelphia one. So what's gone wrong?

Government-Mandated Positive Train Control

Here's a good summary of the issues and problems of the wondrous PTC solution, which was mandated by Congress in 2008. It was declared by Congress that it must be completed by the end of 2015. It won't be. And the cost? The GAO estimated somewhere between $6.7 billion and $22.5 billion.

A brand-new system dreamed up by government bureaucrats in a short period of time — of course it takes billions of dollars and many years to implement! Of course it's a completely custom system, relying on railroad-only technology that will be generations behind the general computer industry before it's even deployed! Of course everyone assumes you can spec out a never-built-before system and get it right the first time!

This is amateur-hour technology, and it is … killing! those of us unfortunate enough to be in the wrong place at the wrong time. This is a near-perfect example of bureaucratic "innovation." It is an example of the "what not how" problem of regulation: what should happen is simple declarations of goals (don't murder people) instead of gruesomely detailed directions for how to avoid murdering people. The bureaucratic approach mandated by Congress has already resulted in incredible expense and multiple avoidable deaths, just as its similar approach to computer security has resulted in some of the worst security breaches in history.

The Modern Approach

There is a better way. It leverages modern computing, devices, networks and software. "Experts" will pooh-pooh the approach, saying that anyone who proposes it doesn't understand the harsh and peculiar railroad environment. That's what experts always say in situations like this, standing on their little technology island, protecting their "expertise" and their jobs, until modern, high-volume technology gets the job done. Then, without further comment, they retire.

I won't lay out the whole approach in this post; this blog has lots of the core ideas, and so do lots of modern computing technology people.

Just as mapping software on a phone can track your location and speed when you're in a car, it can do it when you're on a train. Why shouldn't lots of people have this app? Why not publish the complete map of all the train tracks? Most of it already seems to be available to consumer mapping programs — they just need to be tweaked to allow travel on rails instead of on roads. Yes, there are areas where track maintenance is taking place where trains shouldn't go — just like with roads! Mapping software already exists to avoid such routes — just use it! Yes, there are switches — how about adding them to the maps, and making whatever controls them upload their state to the cloud? Yes, there are other trains to be avoided — how about the apps all upload their positions to the cloud, and give a view to where other trains are? Yes, there are things you should pay attention to when you're not looking at the app — navigation apps already handle this through audible alerts or talking to you.

These simple steps, which could be built iteratively and deployed in weekly cycles, would go a long way to solving the problem. There remains the problem of overriding the train controls in case something terrible happens — but if all the conductors have the app and they have access to the engine car, many of the potential bad things could be avoided. The potentially tricky issue of automated speed control could then be addressed — but after all, airplanes are largely run by auto-pilot, why shouldn't trains? If auto-pilot works for vehicles that go hundreds of miles per hour, miles in the air with no tracks, surely it can't be too hard to make a version for relatively slow vehicles without steering controls, whose only variable is speed!

While the government is mandating and regulating, billions of dollars are being wasted building systems that will be obsolete before they're installed, and meanwhile people are being killed and injured. There is a better, faster, cheaper way. Its cost to build is likely to be much less than the cost to simply maintain the PTS. So let's do it!

May 20, 2015
Innovation Made Simple
There is lots of noise about “innovation” and its importance. Not only are there books, articles and conferences, large organizations increasingly employ Chief Innovation Officers to make sure innovation really does take place – otherwise, it might not, and what a horror that would be!

Innovation seems to be a big, important, mysterious thing that isn’t one bit obvious. Lots of people have to get together to figure out this grand new thing. Here’s a typical example:

I must be missing something. I agree that making things better is real important, and I’m happy to call that “innovation.” But it appears to me that, in most cases, the innovation that most of the people served by an organization would value most highly is simple and obvious.

For example, in football, people focus on all sorts of fancy things. But what wins most games most of the time? Getting real good at blocking and tackling.

In most non-sports organizations, doing the equivalent of blocking and tackling makes things better. Since most organizations use computers a fair amount, the process is simple:
1. People should do their jobs. Completely. Correctly. On time.
2. Computers should help people do their jobs, and monitor whether they’ve done them correctly.
3. Computers should do things that people used to do.
No magic, no mystery, no focus groups required. It’s simple: Do it right! Then computer-enhance it! Finally, automate the human element! If this bothers you in any way, ask yourself whether you’d prefer to wait until the bank is open, walk into it, wait in line for a teller and get your money – or whether you’d just as soon walk or drive up to an ATM any time you please and get your money from a machine. Hmmmm.

Big Fat Personal Example of the need for simple Innovation

I had an appointment to see a doctor at one of the top hospitals in the US: Mount Sinai in NYC. Lest you think this was a no-big-deal appointment, let me just say I’m taking a drug that can have really bad (but hidden) side effects, and this was to check on how I’m doing. I wasn’t feeling casual about it.

I had written confirmation of the appointment, an on-line reminder of the appointment, and a robo-call reminder of the appointment the day before. Efficient! So I took the couple hours required to get to the hospital in plenty of time. The place where I usually sign in had my appointment in their system, but told me to go to another desk. They also had my appointment, but told me that unfortunately, my doctor was on vacation. They were polite, but the doctor wasn’t there, so the appointment wasn’t going to happen.

Assuring the innocent person giving me the bad news that I wasn’t mad, I asked what he would recommend as the best thing I could do to rattle someone’s cage about this unfortunate event. He got a supervisor to come out. The supervisor apologized and explained that a lady who’s out today was supposed to call me, but obviously didn’t. She’s sorry. Can she pay for my parking or something? Since I know Mount Sinai uses Epic, I asked whether she could get an alert put in to catch cases like this. She acted like she thought it was a good idea. But given how IT works at places like this, I’m not holding my breath. And there were actually two problems: the robo-call should have been cancelled, and a call to re-schedule me should have taken place. Not to mention e-mails, etc.

Mount Sinai’s medicine and doctors are among the best anywhere. But the hospital’s blocking and tackling is abysmal. The day before I was scheduled for an MRI they called to say my appointment was cancelled because they had no pre-authorization. Personal appeals to hold the appointment, followed by frantic phone calls, uncovered than Mt. Sinai has a whole department that does pre-auth’s. My doctor had placed the order correctly, but the pre-auth didn’t happen. My doctor’s assistant said it happens all the time, and is tired of catching the blame for it. It took a couple hours of phone time to get me the go-ahead.

Mt. Sinai thinks all sorts of things are important and worth spending money on. They have big TV’s blaring away in waiting rooms. They have iPad’s available to patients to amuse themselves while waiting. They have signs announcing how great they are marching down many NYC streets. They have classes on meditation and all sorts of activities directed at Arabic-reading people of the Islamic persuasion, judging from displays in the waiting rooms. All of these things are apparently more worthy of attention than blocking-and-tackling for boring, trivial things like appointments and pre-authorizations. And, sadly, I have lots more similar examples.

Mount Sinai hospital and Innovation

Mount Sinai has made its position on innovation clear: they’re for it. They have a whole department in charge of it. They have hosted at least one conference on innovation featuring all sorts of important people. They tout their innovative computer technology, including Epic. I neither dispute nor disparage any of this. But it’s kind of like a surgeon who does genuinely wonderful surgery, but disdains to wash his hands or double-check whether he’s operating on the right thing. They have indeed purchased and installed one of the most advanced, complex EMR systems – but they fail to get it to do the most basic things. And my personal experience is the tip of an iceberg. The waste and inefficiency within the hospital that I have observed that results from failing to pay attention to simple things like scheduling is simply monstrous.

I can’t resist giving just one juicy example. Where I check in, there is a whole line of check-in people who have to enter lots of stuff into the computer while you sit there. I noticed a little speaker on the wall that would sometimes make discrete little sounds. There was no one waiting behind me, so I asked the operator about it. It turns out that the speaker was installed some time ago and everyone like her trained to listen, because it tells you when it’s safe to hit submit on a new entry. The computer is so overloaded most of the time that unless you wait for the “it’s OK” audible signal, all your work will be thrown away and you have to start over.

As a life-long computer geek, my jaw didn’t just hit the floor; it blasted through it and was finally halted in its downward descent when it hit the bedrock under the island of Manhattan. I think I’m still working on putting it back. I’m so blown away I have no words – even sarcasm, my go-to mode, escapes me. Enough said.

Innovation made simple

I like cool new stuff. There should be more of it. It should even work.

But if you’re willing to pay attention to what actually matters, even though it may be pedestrian and boring, you can make a huge impact at nearly any organization without the benefit of a single conference, book or hi-falutin consultant. You can “innovate” by doing the equivalent of blocking and tackling, i.e., taking care of basics. In other words: Make sure every job is done, and everyone does his job. Then assist and enhance them with computers. Then, to the extent you can, replace human labor with full automation, including calling for human attention only when it’s needed. These simple steps are frequently and painfully not done; if they were done, surprising amounts of money and time would be freed for doing the complicated “cool” stuff that most people call “innovation.”
July 11, 2014
Innovation with Computers and Slow Things

People have theories about innovation. Increasingly, they think it's important to innovate. Fine. I'm all for it. Given a choice between "innovation" (whatever that is) and the alternative, which I assume is something like "sitting and rotting," I'll take some of the former, thanks very much.

Whatever people end up saying "innovation" is (which kinda doesn't matter, because before long it will fade away, eclipsed by the next fashionable thing), it's clear to me that there is a huge difference between innovation that is based on using computers (which evolve quickly) and all other kinds of innovation.

For purposes of this post, I'll define innovation simply: innovation is doing something differently than you did before.

Physical Innovation

Physical innovation is hard. It doesn't happen very often. The reason is simple: over time, everyone pretty much figures out the best way to do things, and figuring out something new is hard and rare. A typical example of this is the gradual shift from wrought iron to steel.

Here is the famous iron pillar at Qtub Minar in Delhi, as it was when I visited it a few years ago.

This pillar was created no less than 1,000 years ago, and perhaps longer than 1,500 years. Wrought iron was created in many parts of the world, from China:

to Europe.

Steel is closely related, but different in important ways. The very earliest steel is about 4,000 years old. A form of steel, Wootz steel, was made in India more than 2,000 years ago. This steel was shipped to the Middle East, where it became the raw material for Damascus steel swords. But none of it was a practical innovation over wrought iron until the introduction of the Bessemer Process in the 1850's.
Then and only then could we have wonderful modern things like steel cables, structural steel for buildings and bridges and many other things.

Physical innovation, like the replacement of wrought iron by modern steel, is tough and long, punctuated by invention while still requiring endless baby-step innovations.

Process innovation

Process innovation is a whole different animal. Process is what the concerned human beings agree it should be, even if a bunch of machines are involved. The only limit is concepts. Opportunities for process innovation are all around us. In all too many cases, it seems more appropriate to call a process innovation something more like "stop doing it the obviously stupid way."

Here's an example. Not long ago, a delayed flight I was waiting for at JFK airport was finally cancelled at 1am. A whole lot of people went to the terminal entrance and got in the roped-off line for cabs. I waited about 20 minutes to get to the front of the line, and there were loads of people still waiting after me. "It's real late," I thought, "I guess most of the cabbies were sensible and are home sleeping in bed." Nope! There was a looooong line of cabs waiting to pick up the loooooong line of exhausted rejected passengers.
What was the problem? Process, of course. There was a single person who had to find out where you were going and give you the right piece of official paper before you could get into a cab.
And instead of walking up the line of waiting people, the "dispatcher" insisted on performing his duty as you were getting into the cab, which serialized the whole process.

Process "innovation" is, more often than not, simply "stupidity elimination."

Conceptual innovation

Conceptual innovation is a pretty big deal. It is limited only by the powers of the human mind. One of my favorite examples is one I encountered around the time I graduated from high school, George Danzig's Simplex algorithm for solving a linear programming (as in math programming, not software programming) problem. It's cool; it's been called one of the top ten algorithms of last century.

Computer Innovation

I know there's lots of physical innovation involved in creating the unprecedented, awesome speed with which computers evolve. There has been nothing comparable to it in human history. It also know it's accompanied by and partly enabled by lots of true conceptual innovation and some process innovation. But let's take all that as a given. What do we have?

We have a set of tools that can control, automate and communicate faster than anything in history, and that improve at a hard-to-comprehend rate. As soon as we get something working with one generation of the things — BOOOM! — everything concerned has just gotten better by 2X or more in speed, cost and size.

Steel took over from wrought iron when the process of making it got faster and cheaper, and when the results were superior. It took decades. Well, that happens every year or two with computers — the question is, how are you going to take advantage of the improvement?

That's computer innovation. What's possible now that wasn't a year ago? What can I do now to create a product or service that, on next year's devices and networks, will make sense? The people who jump on this and make it happen are the innovators.

The themes are clear: we move from slow transmission of small amounts of data to big, expensive devices (think teletype) to near-instant transmission of huge amounts of data to small, affordable devices (think smart phones). This happened in small steps. Each step was a massive technology and business disruption. Fortunes were made and lost at each step. Fortunes will continue to be made (and lost) as some people see the possibilities and take advantage of them, while most learn the current state of computing and networking, and — amazingly — act as though it won't change. That's actually what the vast majority of people and companies do!!

Computer innovation is different than the other kinds — not better, just different. If you understand the rules and act accordingly, you can accomplish amazing things. It almost feels like cheating to call it "innovation," but technically it is, so let's go with it.

March 31, 2014
Lessons for Software from the History of Scurvy

Software is infected by horrible diseases. These awful diseases cause painfully long gestation periods requiring armies of support people, after which deformed, barely-alive products struggle to be useful, live crippled existences, and are finally forgotten. Software that functions reasonably well is surprisingly rare, and even then typically requires extensive support staffs to remain functional.

Similarly, sailors suffered from the dread disease of scurvy until quite recently in human history. The history of scurvy sheds surprising light on the diseases which plague software. I hope applying the lessons of scurvy will lead to a world of disease-free, healthy software sooner than would otherwise happen.

Scurvy

Scurvy is caused by a lack of vitamin C. It's a rotten disease. First you get depressed and weak. Then you pant while walking and your bones hurt. Next your skin goes bad,

your gums rot and your teeth fall out.

You get fevers and convulsions. And then you die. Yuck.

The Impact of scurvy

Scurvy has been known since the Egyptians and Greeks. Between 1500 and 1800, it's been estimated that it killed 2 million sailors. For example, in 1520, Magellan lost 208 out of a crew of 230, mainly to scurvy. During the Seven Years' War, the Royal Navy reported that it conscripted 184,899 sailors, of whom 133,708 died, mostly due to scurvy. Even though most British sailors were scurvy-free by then, expeditions to the Antarctic in the early 20th century were plagued by scurvy.

The Long path to Scurvy prevention and cure

The cure for scurvy was discovered repeatedly. In 1614 a book was published by the Surgeon General of the East India company with a cure. Another was published in 1734 with a cure. Some admirals kept their sailors healthy by providing them daily doses of fresh citrus. In 1747 the Scottish Naval Surgeon James Lind proved (in the first-ever clinical trial!) that scurvy could be prevented and cured by eating citrus fruit.

Finally, during the Napoleonic Wars, the British Navy implemented the use of fresh lemons and solved the problem. In 1867, the Scot Lachlan Rose invented a method to preserve lime juice without alcohol, and daily doses of the new product were soon standard for sailors, which is how "limey" became synonymous with "sailor."

Competing Theories and Establishment Resistance

The effective cures that had been known and used by some people for centuries were not in a vacuum. There were competing theories. Cures included urine mouthwashes, sulphuric acid and bloodletting. As recently as 100 years ago, the prevailing theory was that scurvy was caused by "tainted" meat. How could this be?

We've seen this movie before. Over and over again. I told the story of Lister and the discovery of antiseptic surgery — and the massive resistance to the new method by the leading authorities at the time.

Software Diseases

This brings us back to software. However esoteric and difficult it may be, software is a human endeavor: people create, change and use software and the devices it powers. Like any human endeavor, some of what happens is because of the subject matter, but a great deal is due to human nature. People are, after all, people, regardless of what they do. Patients were killed for lack of antiseptic surgery — and the surgical establishment fought it tooth and nail. Millions of sailors were killed by scurvy, when a cure had been known, practiced and proved for centuries. Why would we expect any other reaction to cures for software diseases, when the "only" consequence of the diseases are explosive growth in the time, cost and risk to build and maintain software, which is nonetheless crappy and late?

Is there a general outcry about this dismal software situation? No! Why would anyone expect there would be? Everyone thinks it's just the way software is, just like they thought scurvy in sailors and deaths after surgery were part of life. Government software screws up,

software from major corporations is awful,

software from cool new social media companies is inexcusably bad. Examples of bad software can be listed for endless, boring, tedious, like forever lengths.

Toward Healthy Software Development

If I had spent my life in the normal way (for a software guy), I wouldn't be on this kick. But I didn't and I am on this most-software-sucks kick. Early on, I had enough exposure to large-group software practices to convince me that I wanted none of it. I'd rather actually get stuff done, thank you very much. Now, looking at many young software ventures over a period of a couple decades, the patterns have emerged clearly.

I have described the main sources of the problems. I have described the key features of disease–free software development. I have explained the main sources of the resistance to a cure, for example in this post. And I have no illusion that things will change any time soon.

It will sure be nice when the pockets of healthy software excellence that I see proliferate more quickly than they are, and when an anti-establishment consensus consolidates and gains visibility more quickly than it is. In the meantime, there is good news: groups that use healthy, disease-free software methods will have a massive competitive advantage over the rest. It's like ninjas vs. a collection of retired security guards. It's just not fair!

February 27, 2014
Healthcare: Higher Quality, Lower Costs: Candescent Health
There has been a lot of talk about how to pay for health care. At the same time, everyone wants the best quality care they can get. We all know that in practically every area of life, in order to get higher quality, you have to pay more. A better house? More money. A better car? More money. Better food? More money. How will we ever get out of the spiral of ever-increasing, ever-more-unaffordable health care costs? Everyone knows (empty promises from politicians notwithstanding) that we are marching down the road towards higher costs for lower quality health care.

Several companies in which Oak Investment Partners has invested in are pulling off the impossible, that is, lowering costs and raising quality. None of them involve magic. All of them make common sense. But they're new! The overall common theme is simple: understand the process, give consumers real, informed choice, and above all: use technology to automate the process. Here's one of them.

Candescent Health

Candescent Health is taking a well-understood, necessary, highly-valued medical service (medical imaging), and applying methods that have been used with great success for years in call centers and back office automation. The methods are proven and widely deployed. They lower costs while improving quality, often dramatically. The only surprising thing is that it has taken so long to apply the methods in medical imaging; but that's a potential subject for another time!

The core method is usually called workflow. It is widely applied in factories, document processing, and nearly any setting in which there are repetitive units of work. The key elements include:
- Digital unit of work. The foundation of modern workflow is a digital unit of work. This means the unit of work is like an e-mail, only with structure and controls. It contains the image, everything about it and everything that's been done to it.
- Central work distribution. There is a central location that "sees" (like an e-mail server) every piece of work coming in, every doctor who is working or ready for work, and the deadlines.
- Intelligent routing. It's important that the central work distribution makes intelligent decisions about which piece of work to give to whom. In a call center, this means you talk to someone who is qualified to handle your issue. For medical imaging, it means that the right specialist (for example, someone who only does shoulders!) handles your case.
- Specialized processors. A Swiss Army Knife is great, but for any given task, a real screwdriver, etc. is better. In the same way, someone who specializes in a kind of work produces superior results more quickly than a generalist. This is the key to better quality.
- Process automation. Once the right person gets the right piece of work, making that person as efficient as possible makes the person happier and more efficient. Every keystroke and mouse click that can possibly be eliminated is eliminated.
- Standardized output. Of course there are standard reports. But there should also be standard lexicons, and the same information should always be provided, regardless of who does the work. It's called "interchangeable parts." When this concept was introduced to manufacturing in the early 1800's, it led to an explosion of economic benefits. Now, in the early 2000's, we're applying it to medical imaging!
- Continuous improvement. Anyone who has worked seriously with workflow knows that the system can always be improved. Building in a process of continuous improvement helps maintain quality and make things better.
These are the elements of success for Candescent Health. I've just described their innermost secrets! But the key is that Candescent Health is actually delivering what I've described, and everyone involved (patient, referring doctor, specialist and hospital) is better off as a result. Everyone wins. Makes me smile.
June 23, 2010
From Start-up to Real Success

Start-ups are exciting. There are passionate people in hot pursuit of a new, under-appreciated opportunity. There is the uncertainty of success and long odds, along with a compelling vision and the thought that this could really happen!

Start-ups find themselves snaking their way through dense thickets and up narrow paths, perilously clinging to the edge of steep hills. There are obstacles and dangers in every direction, many of them only avoided by quick reactions and decisive actions.

The pioneers of a start-up are, well, pioneering. They're discovering new territory every day. They learn to be creative, because if they fail to embrace the new, their venture fails.

It's all about going where people haven't gone before. Your theme song had better feature words like quick, new and creative. Slow, careful and conservative had better be attributes of other groups.

Most start-ups never really get started-up. Or they take off and fizzle quickly. Or something happens; in any case, it doesn't really work out.

Things aren't even all in the clear for the few start-ups that manage to get real traction in the market. All too often, the people who discover a wonderful new field of gold…

…find in retrospect that all their efforts amounted to building big neon signs with blinking arrows, signs that say: "Attention established companies: There is gold right over here!" Having discovered gold and brought everyone's attention to it, the start-up is unceremoniously elbowed aside as the established companies, with their organizations and big machines, move in and actually mine the gold.

And then there are the real winners. Part of the outside world starts to give them respect and another part (the part that feels threatened) says nasty things about them. They have real revenues and real customers. The market recognizes that they have something new and different, and a substantial and growing part of the market wants that new and different thing.

You might think that at this stage, everyone can breathe a sign of relief. We're on easy street now! It's true that the odds of ultimate success are way higher than they were before. But there are some HUGE mistakes that are made all too often at this point. In particular, there are important behavior and focus changes that need to happen in order to continue on the path to success.

Here are a couple of the most frequent things that go wrong:

Innovation Scope and Focus

When your venture has built up a head of steam, when it's really barreling down the tracks, the worse thing that can happen is to go off the tracks! But this can happen really easily if you haven't changed your innovation focus from "we're in the woods; there are lots of scary animals and danger on all sides; let's look everywhere and innovate about everything" to "we're on a roll; we've got customers and momentum; let's focus on the track ahead and confine our innovation to rolling down this track more effectively."

If you're not focused on the track ahead and concentrating your innovation on it, chances are you'll go off track.

Innovation Process

When you're small and don't have much to lose, your team communicates closely and changes focus quickly. If you've got an opportunity, it makes sense at this stage for everyone to drop what they're doing and jump on the new thing that could put you on the map.

But now that you've built up a real herd of cattle and more people are involved, things are tougher.

You've got to set up a system that allows you encourage pioneers, but assures that their efforts are mostly productive. You've got to encourage fresh thinking, but somehow assure that an unfortunate innovation doesn't blow up on you and cause the cattle to stampede. You can't (and don't want to) control everything, but you've got to introduce a form of light-weight process that enables a larger group to continue to innovate freely, while guarding against disaster and minimizing waste.

Customer Focus

When you're getting started, your focus is naturally on the great sea of people out there who aren't your customers but could be. You're all about new customer acquisition (if your business is a web site, this means building UV's as you concentrate on SEO and SEM). When you've got traction of the kind we're talking about, you've got quite a number of people who already are your customers (for a web site, this means people who don't arrive via search or a link from another site). This is great, it's what you wanted.

What you should do at this point is gradually shift your focus to the people who are already your customers. Instead of putting all your effort into looking for new fertile fields, recognize that you've got some really fertile fields, and your job is to cultivate those fields.

It's true that pioneering and hunting got you where you are. But now that you've actually arrived in the promised land you were searching for, isn't it time to shift gears, gather and cultivate?

Summary

You've gotten to where you are by concentrating the efforts of a small team on no-holds-barred innovation to discover and build a customer base. You've got a bigger team now and lots of customers who like what you are already giving them. Make it your first priority to keep what you've got, adding "preserve and protect" to your vocabulary. Your business now depends on the customers you've already won — their needs (in most cases) come before the needs of customers you don't yet have!

You've found the pirates' gold. Do you ALL need to rush off in search of more gold? Can't you manage to guard what you've got, not to mention invest and grow it?

May 30, 2010