Healthcare Is Part of Our Supply Chain: The Boeing Company

December 9, 2014
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The Health Innovator’s Collaborative sponsored by the University of Washington and the WBBA is entering its second year and continuing to gain momentum bringing together providers, payers, and health innovators from education, public sector, and industry to discuss hot topics in health. This week marked the second talk in the new season, delivered by Greg Marchand, Director of Benefits and Policy Strategy at The Boeing Company.

The Health Innovator’s Collaborative sponsored by the University of Washington and the WBBA is entering its second year and continuing to gain momentum bringing together providers, payers, and health innovators from education, public sector, and industry to discuss hot topics in health. This week marked the second talk in the new season, delivered by Greg Marchand, Director of Benefits and Policy Strategy at The Boeing Company.

BoBoeing is a data-driven company that makes big bets and takes big risks to bring their products to market. This philosophy extends to how they provide employee benefits, and Marchand and team have taken a data-driven approach to healthcare benefits. In the same way that the principles of lean, data-driven decision making, and cost/risk benefit drive decisions across Boeings supply chain, the same rigor has been applied to healthcare benefits. Marchand knows that Boeing’s human resources are a key part of their success and wants to ensure they are working at optimum productivity. The best way to do that is to make sure they are healthy and that they receive the best benefits available. Quality, innovation, advocacy, and service are the influencers of Boeing’s strategy and the differentiators of their benefits.

Boeing made headlines for their “ACO” approach where they contract directly with healthcare providers and negotiate for service and Marchand came to the Health Innovator’s Collaborative to describe how they did it and why this is the model for the future.

Washington Hospitals, Boeing Strike ACO Deal

Boeing Signs Shared Savings Deal With Washington Hospitals

Boeing-Marchand2Marchand kicked off his talk with a personal example of a “defect” in the healthcare system, to his mind a result of healthcare organizations not having a consumer focus. A few years ago, his wife needed to make a doctor’s appointment for their child. She called for an appointment and was told that she could book a time two weeks from that day, which happened to be a Tuesday. Depending on whether you’re going to see a specialist, 2-weeks could be considered an acceptable wait time for an appointment, however, that wasn’t the problem. The problem was that if she wanted to book an appointment for another day, say 2 weeks from Wednesday, she’d have to call back on Wednesday to book it. Marchand asked the audience to try to imagine what might happen to a retailer like Nordstrom if they used this archane booking system for their personal shoppers. The system had a flaw, and it’s this type of flaw that Marchand and team are on a mission to correct.

boeing-marchand4To do so, they have partnered with UWMedicine and Swedish/Providence in Washington State to provide care for Boeing employees. They also rely on Cleveland Clinic as a Center of Excellence for cardiovascular care. While Marchand says that he doesn’t want employees to have to travel for care, he also wants them to have the most effective care, which is what drove the partnership. (You could tell that this statement was specifically aimed at attendees from the event’s host: the subtext being that it was possible for them to win this business for Boeing.) Boeing’s “triple aim” is quality, experience, and cost with the goal of improving the employee experience and passing any savings as a result of the new ACO model onto employees. Their expectation is that healthcare partners have these same goals and the same data-driven approach. The challenge for Marchand is the need to find partners in all states where Boeing has employees. While Boeing has a lot of clout with $2.5B in annual healthcare spend covering 500K employees, they don’t have the same economies of scale in all states based on employee number. (ACOs looking to pilot new ideas and test data-driven approaches should definitely consider reaching out to work with Boeing: they are looking for solutions.)

Finding the Defects

Marchand’s focus is on continually improving defects in the system and that includes the patient/provider relationship: making sure patients do what they are supposed to do. It also includes using the appropriate forms of communication and care for the situation. Here he gave two examples: using a house call service from Seattle-based Carena for non-emergency issues, especially with children, and being able to email or text your doctor with simple questions, like how to deal with side effects from prescribed medication. Both of these examples provided a higher level of service to the end-user and also lower costs to the entire system. A Carena house-call is 1/3 of the cost of an emergency room visit and email and texting is more efficient and less expensive than a phone call and most certainly than an office visit.

Understanding Cost Drivers

From all the data analysis, Boeing understands very well where its largest cost drivers are coming from and ways to improve, and from Marchand’s talk it was clear that they were very much in the driver seat in pushing their healthcare partners to innovate. Areas of focus include improving the usability of patient communication tools, managing population health, providing easily actionable data for the clinical team, and using the most appropriate and cost effective methods for care. Marchand gave the example of how incentives need to be better aligned to spend money on physical therapy rather than back surgery: again a situation where the patient experience is dramatically improved and costs are lowered, however incentives must be aligned because today, hospitals make more money on surgery than preventative care. Boeing and the ACO vision of the future changes that of course.

The Q&A portion of the event was quite lively and extended far beyond the allotted time. One notable question was about why other employers are not taking the same approach as The Boeing Company. Marchand wishes they would but acknowledged it’s a lot of effort and certainly the data-driven approach is in Boeing’s DNA. As well, only the largest companies have the resources for this type of undertaking.

If you’re in Seattle and interested in the massive changes coming in health and looking for a community of like-minded people plus lively debate, then we recommend you check out the series. Talks are the first Tuesday of every month. We’ll see you there!

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