Healthcare systems are under increasing pressure to generate more value, deliver services more efficiently, and respond to higher patient demands. Goals like better customer service and lower costs, as well as greater value and efficiency, appear to be in conflict.
This paper, co-authored by Professor Michael T. Modic from Vanderbilt University Medical Center, argues that techniques from other industries (e.g., standardization in manufacturing and personalization in retail) can provide useful lessons to fulfill these seemingly paradoxical goals and expand precision medicine.
Key learnings from other industries
25% to 65%* of all healthcare delivery costs are the result of unwarranted variations. Reducing these variations is essential to realizing the full potential of precision medicine. However, it is also important to distinguish between unwarranted variations that are “bad” and should be eliminated and warranted variations that are “good” and should be increased. Greater standardization and personalization can help achieve this.
Manufacturing industry reduces unwarranted variations (bad variations) by focusing on standardization, to improve quality, safety and efficiency
Retail industry increases warranted variations (good variations) by focusing on personalization: using segmentation and better understanding customers for individualized products and services
Digitalization enabled industries teach how to manage and use data more effectively, to enable the identification and management of both: unwarranted and warranted variations
About Professor Michael T. Modic
Professor Modic joined Vanderbilt University Medical Center in 2018 as Senior Vice President of Population Health and Professor of Radiology and Radiological Sciences. He works with the Population Health team on integrating clinical activities and establishing and enabling evidence-based clinical standards across diverse, network-based ambulatory and inpatient settings. Prior to joining Vanderbilt, Professor Modic practiced medicine for more than 35 years in Cleveland, primarily at the Cleveland Clinic where he also served as Chairman of the Division of Radiology from 1989-2006, Chairman of the Neurological Institute from 2006-2015, and as Chief Clinical Transformation Officer until December 2017.