Tuesday, August 18, 2009

Healthcare Innovators Series: Ginny Proestakes, Director of Health Benefits at GE

Ginny Proestakes RN MPA, Director of Health Benefits at GE, shares her insights on the health care challenges faced by large, multi-national employers based in the United States.

What are the challenges you face in providing healthcare or insurance to your employees?

The challenges that GE faces in providing health insurance to its employees and retirees are the unpredictable, ever growing costs. We have to offer benefits to be competitive as an employer. However, because we compete in a global environment, we definitely see and feel the exceptional high health care costs in our US markets. These costs are increasing at an unsustainable rate.

What are some of the competitive challenges you face in terms of cost?

Specifically, when purchasing benefits it becomes a supply chain management game, and just like any other purchase in a corporate environment, you’re trying to buy the highest quality for the lowest cost. We always find it interesting that it is only health care costs that go up year after year; nearly every other expense area sees lower per unit prices each year. We are therefore constantly re-engineering and looking at ways of getting increased efficiencies out of the system. This includes directly employees to best care at lowest prices. This is very challenging because we are not talking about widgets, but human relationships that are very personal and there are some boundaries that we choose not to cross as an employer in this area.

How have you attempted to address this problem?

We have actually attempted to apply Six Sigma to our sourcing process, but I think the real opportunity is helping employees better manage their own health by providing advisory services to employees as they consumer health care. This would include directing them to the best clinician or facility when they are sick for their particular illness. This has actually proven very difficult because not only is this information difficult to obtain but health care is so personal with so many personal preferences to take into account.

What challenges are faced by the healthcare industry as a whole?

There are a wide variety of problems in health care. First, it is a highly fragmented industry. It’s not what we would call in Six Sigma a “wing to wing” process. There are many little processes that get rolled up into a large process and they not only don’t fit well together they often times don’t even connect. The second is it’s not a very flexible system. Change is very difficult, not only for providers but for the health system infrastructure as a whole. I’ve worked with plans and institutions that have had systems in place for over 20 years. Third, I think it is exceptionally difficult to find, purchase, and receive value. The way we pay providers, pay hospitals, and all the various suppliers in healthcare needs a major overhaul. What we’ve been doing is basically rewarding people for units of service and not total value, and I think we need to take a fresh, completely new approach to solving this issue.

Given the recent economic challenges, how do you think we should approach healthcare differently?

With the recent economic challenges, it’s really a very different era to be managing benefits for large employers in the United States. I think we should take a completely fresh approach. I think we should look for every opportunity to drive down inefficiencies, to try new things and to pilot different initiatives and not be afraid to restructure them or retool them as we go along. I think the time is right for innovation and bright, new ideas and really big imagination, which is why the X-Prize is so important to us at GE.

Why do you think the X PRIZE model is a good way to address these challenges?

A prize is a good way to address these challenges because it might attract people who wouldn’t normally get involved in solving this issue. I think it brings in multi, or cross-disciplinary, approaches to solving the problem. We have got to try new and innovative approaches, and we’ve got to reward people for the value that they create. I think the prize approach, and X PRIZE in particular, can be a great catalyst within the health care marketplace.

Why do you think a test or pilot is so important?

The real world test and the pilot always important to any innovation process. We’re taught Six Sigma at GE, and the last toll gate you pass through is the pilot because it is so different than the laboratory, or controlled setting. Whenever you put things in the rela world with real people, you learn a tremendous amount. I also don’t think there will be a single solution in healthcare; it is far too complex and as a result I don’t think there should even be a single prize. As a result, we are really excited about what might come out of this effort.

What outcomes do you want to see from this process?

First and foremost, any solution that comes out has to drive down cost but also improve quality in the process. I believe it has to impact value for all the stakeholders involved in the healthcare value chain. These stake holders include not only employers and plans but also providers, facilities and patients. I also believe a winning solution will need to drive down inefficiencies of information, process, and administration.

Anything else you want to add?

GE is certainly attracted to the X PRIZE and WellPoint partnership around this health care effort. In particular, GE’s well known tagline is “imagination at work,” and it’s embedded in our culture and everything that we do. We’re encouraged to come up with what they call imagination breakthroughs and attempt to pilot them and evaluate them, implement them with Six Sigma precision, and as a large employer to demonstrated how they allow us to increase efficiency, reduce costs, and improve outcomes. As a corporate entity, we have taken the lead in several other industry wide initiatives - including LeapFrog, Bridges to Excellence, and the medical home project. We really look forward to what can become of this partnership.
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