Collaboration Can Work Magic and Vanquish Thorny Challenges

Two recent articles show that even the most intractable problems can be overcome when organizations find ways to align their goals. Sometimes collaboration makes for strange bedfellows—like the military and environmentalists—but opportunity is often highest when when “mashing up” groups that are not used to working together. Innovation can produce surprising value when leaders open their minds, challenge conventional wisdom and make unthinkable changes—like paying a hospital more for treating patients less.

These stories are as inspiring as they are instructive because the people involved questioned assumptions, and I hope you enjoy them.

Healthcare Costs Hit in Solar Plexus

Virginia Mason Medical Center is Seattle’s third largest health care provider, and it began innovating in several areas after receiving a wake-up call from Aetna, one of the area’s largest insurers. In 2004, Aetna shared the results of a study that compared treatment costs of Seattle area hospitals. Several of Virginia Mason’s specialty practices were significantly more costly than alternatives, and Aetna was considering excluding those areas from coverage. In the ensuing two years, Virginia Mason innovated by using new workflow strategies in targeted treatment areas. For example:

• In the spine clinic, they reversed the position of physical therapy from a relative afterthought to the front of the treatment process for back pain, which reduced the percentage of patients receiving MRI tests by one third, while significantly reducing patient waiting times. This was a hot button for Starbucks .
• For migraine headache treatment, the hospital offered special training on when to offer MRIs, which reduced MRIs from 50% to 5% of migraine cases.

However beneficial these changes were, they wreaked havoc in the hospital’s economics because MRIs are very profitable (a $850 cost that produced $450 in profit). Even though treatment processes were more streamlined and area employers like Costco, Starbucks and Nordstrom saved six figures the first year, the hospital began losing money because insurers pay generously for high-tech treatments, and physicians, trained not to consider cost, order the tests as a matter of habit:

“The payment system is so toxic,” says Francois de Brantes, a former health-care program director at General Electric Co. “Unless you tackle it, any health-care reform doesn’t have much chance.”

Here’s where the employers went to bat for Virginia Mason. As Aetna’s customers, they encouraged the insurer to increase its payments to the hospital for the lower tech treatments, which Aetna is doing. Notably, the area’s other two large insurers, Regence Blue Shield and Premera Blue Cross, have not made adjustments to reward the efficiencies.

For more, please read “A Novel Plan Helps Hospital Wean Itself Off Pricey Tests,” The Wall Street Journal, 12 January 2007 (subscription or access to Proquest required).

Unusual Duo Expands Nature Habitats across U.S.

The U.S. military currently has about 30 million acres of training bases across the country, and they increasingly come into conflict with urban sprawl. Of course, most bases were very remote when they were built, but the bases’ new neighbors don’t appreciate the sounds of military training. Enter the Readiness and Environmental Protection Initiative,” which enables the military to work with environmental groups to buy land around the bases for conservation purposes. The land serves as a buffer zone between the military and urban development, which displaces animals.

It is a rather unorthodox arrangement, but it benefits both parties, at the bases reduce contact with homeowners, and environmentalists can help more animals and plants:

“The last people I ever thought I’d be working with were guys in black berets and camouflage uniforms,” says Joshua Stanbro, a manager of the Trust for Public Land, of San Francisco, who worked on the Hawaii project. “Now, I count them as friends.”

Others are not so sanguine, pointing to toxic residues and ammunition dropped in forests. However, the military is becoming more responsive to environmental concerns, and environmentalists have been able to create thousands of acres of habitats for endangered species. To overcome environmentalists’ reticence, the Pentagon began exhibiting at environmental trade shows, which raised eyebrows at first.

For more, read “Another Shade of Green: Military Aids Nature Lovers” (subscription or access to Proquest required).

Analysis and Conclusions

If we define innovation as discontinuous change that is brought to market, it makes sense that unusual partnerships have great potential to collaborate and innovation. The main barrier is “us and them” thinking.