THE STRENGTH of CareMore’s connect-the-dots system is that it produces a cascade of benefits for everyone involved.
The patient, of course, is the chief beneficiary. Health care that considers all aspects of an individual’s well-being lifts the burden of planning, organizing, coordinating, and tracking dozens of variables off the shoulders of the patient and lets her focus on her role—getting well and staying well.
CareMore’s member satisfaction rates reflect these benefits. Ninety-seven percent are either very or somewhat satisfied with their CareMore health plan. Eighty-two percent report that their customer service representative is “always courteous”; 74 percent say they are “always satisfied” with member services; more than 80 percent have recommended CareMore to a friend.
Physicians benefit, too. For many doctors, the opportunity to work with a company like CareMore, one that actually puts patient needs at the center of its practices, is very appealing. And having CareMore’s expert help with some of the most challenging patient problems increases the effectiveness of the average PCP, leading to greater satisfaction for both patients and their caregivers.
And what about the issue that dominated the reform debates of 2009–2010, and that forced Sheldon Zinberg and his colleagues to launch CareMore in the first place—the unsustainable economics of health care in America?
Zinberg had convinced other doctors to join with him in creating CareMore by promising them, “If you put people before profit, you will profit.” During its years as a more or less conventional health care provider (1993–1997), CareMore accumulated losses of around $11 million. But as the system of coordinated care Zinberg had dreamed about rose into place, the economic benefits he’d envisioned gradually emerged. By 2000, CareMore had turned the corner, showing a $24 million profit. It has remained solidly in the black ever since.
The economic logic behind CareMore is unconventional. Professionals at CareMore take on tasks and responsibilities physicians don’t traditionally assume, and CareMore staffers spend more time with patients and their families than health care workers normally do. But every dollar CareMore spends saves multiple dollars down the line. As a result, overall member costs are 18 percent below the industry average. By reversing the cost curve, CareMore has created an economic model for health care that creates a path toward a sustainable private health care marketplace.
In January 2006, a group of private equity investors purchased CareMore, and Alan Hoops became CEO in March of that year. The investment premise: Replicate the CareMore model and build a national business by bringing differentiated health care services to the elderly around the country. The key challenge is making the model replicable while preserving its unique, patient-first focus. If CareMore can achieve this, it will be almost unique in the annals of U.S. health care.
Hoops emphasizes the importance of thinking about this challenge clearly. “It’s not about ‘growing to scale,’ ” Hoops explains.
The phrase implies we need huge numbers of patients to make our system work. That’s not so. We can set up shop in a community, attract three to five thousand patients, and begin having an impact in terms of reduced costs and improved patient outcomes right away. So the word to use is “replicating.” We’re now in the process of replicating our model in communities in Arizona and Nevada as well as elsewhere in California. The problem is no longer proving that the system works—it’s bringing the system to more people … hopefully, in time, to millions of people.
Hoops’s main focus has been on making the replication strategy work—and it has. CareMore has established new clinics while improving its health care impact and growing the number of satisfied members.
This success hasn’t come easy. It required codifying the best practices and systematizing them for simple, accurate replication. It required creating and applying clear standards for measuring improvement and encouraging it. Most challenging, it meant transplanting the heart of CareMore—its passionate, patient-centered culture—from one location to another, through strong leadership, communication, and training.
Easy? No. But it’s achievable—and it’s working. Between the new clinics and the growth in CareMore’s original network, membership has grown at an annual rate of more than 15 percent from 2005 to 2010. And designs for new clinics to serve additional communities are already in the planning stages.
The importance of the CareMore experience for our troubled national health care system is clear. CareMore concentrates its efforts on a particular subset of American consumers—the old and frail. But this subset is an especially important one when it comes to defining demand for health care. They consume an outsize share of the health care dollar invested by the country, whether willingly or not—and a lot of evidence suggests that much of the health care they get is not what they want or need. Simply giving the old and frail the kind of health care they actually need and desire would go a long way toward solving the national crisis.
Is CareMore’s system a complete solution to America’s health care crisis? Not in itself. But Alan Hoops believes the CareMore model, with appropriate adaptations, could be effective with any high-risk population, including chronic disease sufferers, drug and alcohol abusers, and the disabled. The same basic principles could be applied to them as to the elderly: treat patients as whole people, not as collections of disconnected systems; integrate care through all the specialties and the nonmedical behaviors that impact health; emphasize early intervention and prevention of medical problems, and follow through meticulously; monitor and measure results continually, and make accurate patient information readily available to every professional who needs it; help patients improve their health status through diet, exercise, and other lifestyle changes; and develop and apply consistent, evidence-based protocols defining effective care for every major health care problem that commands resources and impairs lives.
Above all, give patients what they really want from their health care providers—a few caring doctors who actually know their patients and are focused solely on their well-being.
If we ever have a national approach to health that meets the real demands of all Americans, it’s likely to embody the CareMore experience, writ large.
3.
Backstory
(BAK-sto-ree) noun 1. elements beyond the product itself that help to make a product magnetic 2. unseen, often-overlooked factors, including infrastructure, ecosystem, and business design, that are essential to creating demand
IT’S WHAT YOU DON’T SEE THAT COUNTS:
BEHIND THE KINDLE SCREEN
For decades, inventors had been dreaming about the electronic book—a handy way of making an endless stream of great reading conveniently accessible anywhere, any time. Imagine, they said, a slim, lightweight e-reader that was easy to read, fun to navigate, and had a long battery life. Such a magnetic product would entice avid readers, excite technology lovers, and unleash a powerful new stream of demand.
Wouldn’t it?
This was precisely the dream that haunted Yoshitaka Ukita of the Sony Corporation.
Ukita was one of Sony’s most gifted product designers as well as one of its most visionary experts on consumer demand. He’d developed the Sony Discman, which had revolutionized the CD music business back in 1984 much as its legendary predecessor, the Walkman, had done for the music cassette. He’d participated in shaping Sony’s development of technologies for the Internet in the mid-nineties, produced early smartphones in the late nineties, and led the creation of a pioneering online music distribution network known as Music Clip in the early years of the new millennium.
Now Ukita was engaged in a project that he believed had greater potential to reshape the media landscape than any of these.
“Sony had already invested in the Japanese movie business,” Ukita told us, “which at the time was approximately a three-billion-dollar industry. And we had invested in the music business, which was worth four to five billion dollars a year. But for a long time we had been looking
for a way to apply our technology to a different kind of content—what we referred to as the data business. And this was a much, much bigger business. When we examined all kinds of publishing content—books, magazines, comics, and so on—the value added up to around twenty-six billion dollars in Japan alone. So, yes—we were very excited about the idea of an electronic device that could do for this content what the Discman had done for music.”
In 2003, inspired by this vision, Ukita invited representatives of the ten most powerful publishing companies in Japan to a top-secret meeting at Sony’s headquarters in Tokyo. As arguably the planet’s best-respected and most-innovative electronics company, Sony had access to the world’s most advanced technology. But the publishers owned the content. If Ukita’s vision was to come to pass, an accord between Sony and these ten dark-suited men around the Tokyo conference table would be absolutely essential.
The meeting opened with the usual ritualized pleasantries. But it really began when Ukita revealed the purpose of the gathering—by pressing the power button on a small, putty-colored plastic device and conjuring to life a display screen that made the publishers gasp.
They’d seen countless video displays of Japanese characters before, including those affixed to would-be electronic readers. They were flickery, distractingly pixilated, glare-prone, low in contrast, and difficult and unpleasant to read. But the screen on the device in Ukita’s hand was very different. Its pale gray background was adorned with neat rows of crisp, black kanji characters, glare-free and effortless to read. When Ukita brought the device to the window and exposed it to the full sunlight of a Tokyo morning, the executives were shocked to discover that it looked exactly the same—unlike the display on a laptop computer or mobile phone, which was practically impossible to read in direct sun. At a glance, you might think you were looking at ink on paper—not an electronic screen at all.
“This is the Librié,” Ukita declared proudly. (A world traveler, he’d come across the word during a visit to Spain and had jotted it down as if with this very moment in mind.) “One day, millions of people will read everything you publish on a device like this one.”
As the pale-faced executives exchanged glances, Ukita began to explain the technology behind the Librié. He’d first seen a display like this after being tipped off by a call from a friend: “I just met an American named Wilcox who has a new toy you will really want to see.” The very next day, Ukita had arranged a hotel room meeting with representatives of a company called E Ink, where he’d become one of the first executives to see the latest version of the company’s unique “microcapsule” display technology.
Ukita had been thrilled. For over a decade—ever since he’d tried, and failed, to create demand for an information machine called the Data Discman back in 1992—he’d been looking for a better way to let people read on a screen. Now he’d found it. Ukita and E Ink’s Russ Wilcox quickly negotiated a deal to let Sony become the first company to use E Ink in an electronic reader. Months of teamwork between the Americans and the engineers and designers at Sony had resulted in the sample device now being passed from hand to hand in the conference room.
“The Librié is easy to use, compact, and convenient,” Ukita told the assembled publishers. “It can hold up to five hundred books at a time. The contents are protected so that no one can make unauthorized copies. And the whole device, including batteries, weighs three hundred grams. The average book you publish weighs three hundred and nine grams. Our machine is lighter!” He tapped the screen. “This is the future,” he declared. “And Sony wants you to be our partners in creating it. And in profiting from it.”
For a long moment, the publishers stared at the table in silence.
They had no reason to doubt the accuracy of anything Ukita had said. Just the opposite: Their attitude toward Sony was one of admiration bordering on reverence. They knew that no company in the world had a greater tradition of technological innovation—and demand creation—than Sony. If Ukita-san believed that Sony was on the verge of transforming their industry, they believed it, too.
And that’s why, when they broke their silence, all ten publishers broke into smiles of approval and eagerly began describing how they could work in close partnership with Sony on shaping the new market for electronic books distributed through the Librié.
They understood all too well that collaborating with Ukita-san and with the great corporation he represented might be their last chance to participate in the electronic publishing revolution—and, they desperately hoped, to smother it in its cradle.
ONE OF TODAY’S most impressive demand stories is the boom in electronic reading devices that is reshaping one of the world’s oldest industries, the traditional publishing business launched by Gutenberg nearly six centuries ago. Yet few people even in the publishing industry understand the real story behind this demand explosion.
Most attribute the runaway success of Amazon’s Kindle to the E Ink technology incorporated in its clear, highly readable screen. But if the advantages of E Ink explain the success of the Kindle, what explains the little-known story of Sony’s Librié, which used the same E Ink technology and was launched, with much fanfare, in the vibrant Japanese book market three full years before the Kindle—only to fail completely?
As usual, the key to unraveling a demand mystery is the anomaly—the piece of the puzzle that makes no sense at first glance.
In this case, the true explanation for the triumph of the Kindle is not the E Ink technology but something far less obvious—the behind-the-screen elements that make the Kindle into a powerfully magnetic product while its near twin created almost zero demand in Japan (thanks largely, as we’ll see, to the smiling sabotage practiced by those ten Japanese publishers after their fateful meeting with Ukita-san).
Such behind-the-screen elements—easy to overlook yet crucial in the creation of demand—make up a product’s backstory.
Think, for example, of the last great movie you saw. Your attention was riveted by the action on the screen: the charismatic stars, the compelling plot twists, the amazing visual spectacle. Yet insiders know that the real secret to a movie’s greatness frequently lies in the backstory elements whose existence audiences can only guess at. They include the deals made and not made, as well as the contributions of the hundreds of professionals whose very titles are mysterious to most moviegoers—“Sabre artists” and “Foley artists,” “location mixers” and “ADR editors,” “gaffers” and “grips” and “best boys”—yet who give a movie its distinctive look, sound, texture, pacing, and drive. Without them, and the incredibly complex backstory they build, all the more obvious contributions of headliners like Julia Roberts and James Cameron would go for naught.
In the same way, it’s the unseen and unheralded backstory elements that make the Kindle magnetic, while Sony’s failure to support the Librié with an equally compelling backstory led to an epic demand failure.
The telltale pattern emerges in one demand story after another: What you don’t see is often what makes or breaks the product.
LIKE SO MANY tales of electronic innovation, including those of the computer mouse and the graphical user interface, the story of the Kindle begins in the 1970s at Xerox’s legendary Palo Alto Research Center (PARC) in California. Nicholas K. Sheridon, a PARC researcher, was frustrated with the dim, low-contrast, hard-to-read display screens then used with computers. So he devoted eighteen months to experimenting with alternatives. Sometime in 1973, he came up with a device he called the Gyricon, which used microscopic balls embedded in fluid to create recognizable images with high contrast and no flickering.
This was the technological breakthrough that would ultimately produce the e-reader. But Xerox did nothing with Sheridon’s invention. We could chalk it up to managerial shortsightedness, but the real point is a broader one: New technology, all by itself, almost never leads directly to demand. Most often, the path connecting innovation and demand is a circuitous one, depending on serendipity, luck, insight,
persistence, and the fortuitous coming together of numerous, seemingly unrelated circumstances—including the eventual discovery and deployment of the backstory elements that are often the secret keys to demand.
In the mid-seventies, the backstory required to make the e-reader a success was still decades in the future.
The big step toward a practical application was taken in the mid-nineties by Joseph Jacobson, a young physicist at the MIT Media Lab, and a pair of research assistants, J. D. Albert and Barrett Comiskey.
Jacobson, a voracious reader, had long been intrigued by the idea of an electronic book—a device that would be as comfortable, convenient, and pleasant to read as a traditional printed book while being able to display an endlessly changing array of texts or images. In 1996, he asked Albert and Comiskey to experiment with Sheridon’s approach. By 1997, the concept was well enough developed to become the basis of a new company: E Ink. Cofounded by Jacobson, Albert, and Comiskey along with Russ Wilcox, then a recent graduate of Harvard Business School, and Jerome S. Rubin, a former president of Lexis-Nexis, E Ink began developing prototypes for paper-like electronic displays.
Demand_Creating What People Love Before They Know They Want It Page 10
