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Bill Russell: Today on Town Hall

(INTRO)

Majid: Be real about what your priorities are going to be. Real about what you can finish, not what you can start. You can start a lot of things, but you cannot finish everything,

Bill Russell: My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of This Week Health.

Where we are dedicated to transforming healthcare, one connection at a time. Our town hall show is designed to bring insights from practitioners and leaders. on the front lines of healthcare.

Bill Russell (2): Today's episode is sponsored by Meditech and Doctor First .

Bill Russell: Alright, let's jump right into today's episode.

Majid: I'm a big advocate of this conversation because We get a bad reputation. Oh, you're a beautiful technologist. You're expensive. And you just want to sell us stuff. And you've known me for a long time. I actually don't want to sell you stuff, right? I'm a business owner and healthcare costs for small business, medium business, and even large business have been ballooning and inflating, and it's becoming a hindrance for ability to hire people, to be honest with you.

Because people, when they come in, yeah, they care about their salaries, but benefits is a huge one and how much out of pocket they're going to pay. So small business. cannot afford to give benefits to their employees anymore. It's just simply too expensive. And that to me, when you're saying how do you balance, set your priorities.

Be real about what your priorities are going to be. Real about what you can finish, not what you can start. You can start a lot of things, but you cannot finish everything, right? The rule is, can we finish it? Not getting me started. That's how I do with my own company, right? It's not, oh, we can start a whole bunch of things and it becomes a hobby.

No, no. And then what's the relevance to the business? So AI is very interesting. Is it going to live up to its promise? I'm not sure in healthcare. I'm really not sure in healthcare because of how The cost is going to inflate everything. You're going to have a lot of companies creating all kind of tools and programs and things in AI, and they're going to ask a premium, and then you have to ask yourself, is it better if I buy that stuff, or better just for me to remain the same?

Those are very difficult questions to answer.

Zafar: Yeah, for sure. It's, I do agree with you. I think all the hype is leading us down a path that we may not be able to sustain the cost model. Like you said, it's always easy to start an AI project or start any project, but can we complete it? And then once we've completed it, can we actually sustain it for the five to 10 years that we need to sustain it?

That always becomes a difficult. For the C level guys that are listening in, the bigger question I have around all of this technology investment and the way the market is going is, so should we then be building or buying these technology solutions? Because there's two camps here. There's the camp of, I'm a CIO who wants to do world domination and be a software development house and build the next coolest things, or I just want to consume.

a service, you may call those managed services, to solve a particular problem or a set of problems. And are you seeing a shift in any different direction? Because I think there's two camps in this particular space. Certainly my peers and colleagues, we agree to disagree on many of those things, but what are you seeing?

Obviously you work outside of healthcare, but also in healthcare. Are you seeing a trend towards more consumption versus, or are people still building out these solutions?

Majid: Yeah, I think, first of all, depending on the size of the healthcare provider, so size definitely matters in these situations because the ability to scale up and the resources available to you from an investment perspective is directly correlated to the size.

Right? So that's very important. So if you're in the top 20 healthcare providers in the U. S., then you're most likely looking at not necessarily building, but partnering. So you think about all the big technology companies, whether it's Google, Microsoft, Oracle, even Epic, they have their own investment in AI, and how do they do a plug in to a They already sell you today and how they basically help you throughout the way, because that's how they're going to make their money.

But then the customization and the data that is specific for patients or your community is specific to you. So how do you build a layer on it? So to me, I believe the top 20 are doing deep partnerships with the big companies. Companies who are building AI to get there. Now, as you go down in the size, and as you go out into non city or urban communities, your ability to invest is very hindered.

It's extremely. You don't have resources. You're barely just keeping the lights on. So the question is, how do you use what others have already used? So you have to be lagging anyway, right? And you have to have the discipline not to start something that you're going to get you in trouble and then just wait and see, and to be honest with you, it's too early in the race.

Which horse would I bet on that they're going to create the next big, most coolest AI technology for healthcare? I don't think anybody can tell you that today. I really don't think so. I think everybody is early in the race. We are not sure, right? And no matter what people tell you, I have the coolest model of stuff like this.

And there was a lot of money going in, investment money, PEs, VCs. There's a lot of transactions that are happening. It's a sea of chaos. So my recommendation is to CIOs or technology leaders in healthcare is just be patient. Have the discipline to look away for a while. Sure. Be curious, but don't bet. It's not a good time right now to make any bets because it has yet to prove that it's going to be transformative to healthcare.

It has yet to prove that it's going to be delivering great patient outcomes. It has yet to prove that it's going to lower the cost of care, right? I think there are other places where you can leverage AI that is not related to patient care. I believe, right? Whether it's your billing, whether it's your records management, right?

How do you make it seamless? There are ways that you can get there fast. But regards to patient care, I really don't think it's a good time to do it. Just be patient, is what I tell all my technology executives, specifically in healthcare.

Zafar: Right? Yeah, I agree with you. Right. There are core functions that you can automate and use these tools in and see some sort of return.

And then the bigger piece is, can you really drive AI to improve outcomes and also reduce the cost of healthcare? Because you mentioned earlier, we're, we're the highest. Cost model in the world for delivery of care with some of the worst outcomes in the world, right? If you look at the WHO lead tables, we're usually number 17 or 18, where France and Germany and the UK are in the top three consistently, and the argument, socialized medicine versus private medicine always exists, and people have views either way, but the reality of it is, if I'm a patient, I go to a health system, primarily I want to live, right?

When I come out of that health system, and I don't really care who that health system is and what country I am in to have that service being delivered. And the data shows that we spend a lot, but the question is, how do we then drive costs down? So some of the things I was thinking about that really are head scratches for me 5, 000 hospitals in the United States, and guess what?

We all have the exact same support service function in IT. Of course, everybody has to have multiple data centers. Everybody has to have multiple engineers, multiple IT operations, end user device functions. It just dawns on me that. Why are we not doing more sort of shared services? Why would you not build some sort of economy of scale that says, Hey, do we really need to have thousands of data centers supporting thousands of health systems or If you're all going to run the same system, couldn't you just have three or four data centers that do the same thing, right?

And then your costs start coming down. There seems to be a lot of, you know, fiefdom sort of situation, pride in, I've got 7, 000 people working in technology and that somehow makes me more efficient or more powerful. And I agree with your point around, building partnerships. But I truly believe that if we want to drive the cost down of what I would call commodity services, things that have to happen, but nobody at clinical level cares about those things.

Because at the end of the day, a doctor and nurse doesn't care how a laptop works. They just want it to work. Or a data center or a server or an application. So what we've not really been good at is how do we grow that sort of economy of scale, thus reducing some of those costs, which would free up some funds to invest in some.

What we describe as cooler innovation. So what are your thoughts? Are you seeing a trend towards that sort of centralization or is it still super fragmented and everybody's just doing their own thing?

Majid: I'm actually smiling because what you're saying is. What makes you unique and why I admire you, and because of your role as a CIO, you think for what's best for the healthcare system.

I actually tried to do this idea about collaboration between all healthcare systems in the Pacific Northwest because it was simple. If everybody is buying a light bulb, Why don't we just all make the same light bulb and then we all use the same light bulb for simplicity. And it was fascinating, the pushback that we received because everybody said, I'm unique.

My community is different. Either way I deliver services is different. And it took me 15 years of having dialogues and arguments and all these things, and it was just a no vail. It was just, everybody wants, everybody believes that their way is the best way. Yeah, but yet it continues to fail over the last 30 years.

So it's like one of those things, the definition of insanity is doing the same thing over and over again, expecting different outcomes. And to me right now, healthcare is going through a validation of insanity, actually, because they continue to try to be unique and different, do their own thing independently.

And they continue to fail, in my opinion, miserably. Of delivering lower cost of care. So technology, if you think about it, scale where technology works. If you think about all the big technology companies or all the big companies in the world, the reason that they become one of the big reasons they become very profitable is they get to a specific scale.

Where you're delivering the same services repeatedly over and over again at a significantly number of times, right? It's the idea of rinse and repeat. And healthcare is the biggest rinse and repeat of all services out there. Most people have similar sickness. Most people have the same kind of challenges or issues and how you deliver the service to them is identical.

You use a nurse or a nurse practitioner or a doctor or a surgeon by function and to convince these folks to do it is impossible. That's why I said earlier in this conversation the private social combination simply does not work. We need to determine is it going to be 100 percent private or 100 percent social.

Then if we're 100 percent private, Then the normal thing, which is what a lot of private sectors have done, they would truly would use technology to drive costs down because it impacts their profitability. And if we're becoming social, then the government, not that I want the government to dictate or mandate technology, but sometimes desperation, you have to do stuff like this.

And we've seen that in other social medicine, The outcomes are very good. They're better than the U. S. We just need to make a decision. And I really think in the system that we live in today, it's very impossible to do the right thing, which is what you're suggesting because of the fight, because of the two kind of counterproductive efforts to create these five TEMs and silos to operate on their own.

And unfortunately, in my view, this is very bad. I don't think we're going to change until we start seeing a lot of hospitals cut down critical services or cut down emergency departments. One of the most expensive places is emergency departments. And quite a bit of hospitals in the Pacific Northwest were protected.

We have an interesting ecosystem, but if you start going east and you cross over the middle of the country, some hospitals are actually shutting down their emergency departments. Some hospitals are shutting down their critical services because they just simply cannot afford. Advocation. Unfortunately, lobbyists work for people with the most money, which is not hospitals, right?

And it's, it's a challenge. And I'll just add a caveat to this, right? At the end of the day, we have to use measurements for effort. So if you think about, for me, life expectancy is the measure of success. For healthcare overall. How long we live, right? Forget the wellness and how good you feel and stuff like this.

The U. S. over the last 30 years, leveraging technology. In the 70s, we were around 72 years life expectancy. Today, we're about 78. And you think about the cost. Now, six years. Is that really worth the money that we spent? Absolutely, of course, but realistically, not really. We're not getting the outcomes that we deserve based on how much money we're spending.

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Zafar: No, I agree. And of course we're all unique and we're all special and we do things differently. We really don't like to standardize. Certainly. In the sort of support service space, although everybody needs a server and storage and backup exactly the same way as the next health system, but we're still very unique.

The, the future thinking has to be is what is going to be the third way? Because if we continue To do what we do in silos, which we do, I agree with you, then our spend on technology at a health system level, it won't be 3%, 4%, it'll be 5, 6, 7, 8, 9, 10%, it's becoming unsustainable. And as we see renewals. For a lot of the technologies that we've put into place, those renewals are coming back at 15 to 20 percent increases year on year.

So something has to give, right? So either you're going to cut back on clinical services or you're going to cut back on service levels, and it'll be really hard for health systems. to do this all by themselves, in my opinion, you're going to have to find a blended model of who do you partner with, what services do you do the best on the ground that you keep, what services you can consume from a pool that don't necessarily have to be on the ground, and may even be in a different location, geography, et cetera, to try and Keep that spend at that sweet spot of 4 to 5%, which is where CFOs like to see it.

Once this sort's creeping over 5%, they don't like to see it. And that's when the whole cost improvement programs, layoffs and other things happen. And that's something we need to think about. Uh, and we won't be able to achieve this by ourselves, right? Fundamentally, we think we can run our business sufficiently in health IT, but.

In most cases, we can't. Back to your point, we do not have the economies of scale. I can run 100 people in the data center, but I really need the scale of 10, 000 people to get the cost models that I need to deliver the services I need to keep my budget, my spend at about 5 percent of system operating expense.

And that is becoming really hard. And certainly with AI, what I'm seeing is. There is demand to use it in certain areas, but there's just no way to fund it. And what tends to happen, you fund a pilot. Pilots in healthcare tend to never end. And then you now have an overspend on what you thought was a great idea without figuring out the return on investment, as you said earlier in the conversation, not really being solidified.

And of course, the other thing we don't do well in health is Accountability. So when somebody does come up with, I want to spend 10 million on this solution and my business case says, I will get my 10 million back. Typically, you don't get it back and then nothing really happens. So nobody sits you down and say, okay, you promised X.

It pretty much just moves on to the next shiny toy.

Majid: And that's what I said about this social capitalist combination and the rift that is being created. And how do you think about it this way? Lead with compassion. The people who pay your bills lead with profit. So those two, they don't meet like they are so far apart from each other.

So healthcare providers have to start thinking, leading with profit, which is dangerous territory, if you think about it, or the payers need to lead with compassion or some degree of compassion, right, for the two to kind of be synchronized and truly serve. The patients serve the people they were created to serve.

And I, this debate will require, you know, an hour or 20 minutes is not going to do it, but to me, it's important to highlight and shine the light on these issues and start changing the thinking, because if we change the thinking, That's how we come up with new solutions to existing problems. If we never change the thinking and we think our way, it's still the best way, despite all the evidence that it's not working, then I said, that's the definition of insanity.

And it's, it's a big issue because we're all getting older. Healthcare becoming more and more critical. I'm an ambitious person that I obviously, just like a lot of people, I want to beat the 79 year old average life expectancy, right? And I'm not leading with hope. So, I really know a lot of people who want to own and control their health choices, and we decide to pay our own price.

Now, people like us can afford it, which is great for us, However, it's not great for the 99 percent of the people around this country, which is a shame because we're the richest country. We have the most resources out of any country in the existence of humanity. For us not to truly leverage technology for what's meant to be, which is Lower and improve care.

It's really disappointing to me. It's very disappointing.

Zafar: Yeah, totally agree. We started off talking about having the right tools at the right time, delivering the right cost for those right tools. And my takeaways from the conversation is for our colleagues listening in is, Hey, make investments that make sense.

Don't jump the gun. Be very careful in how you invest your money. Do a lot of prioritization. Synchronize your technology investments directly with the business leaders that you have, in this case, the clinical divisions, to make sure that the short amount of money you do have Can provide the tools that they need to provide the care and don't jump in or don't jump all in to the deep pond when you're trying to buy some of these bleeding edge.

Sexy tools that people really want to have. So I'd like to thank you, Majdi, for sharing your insights on what's really happening in the industry and how we can do things differently. Maybe thinking of a third way of moving forwards to our listeners, always embrace challenges and setbacks as opportunities for growth, as they make you stronger and wiser.

Stay tuned for our next Town Hall, a production of This Week Health. Thank you.

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