On an otherwise normal day in 2009, Stephen Klasko, then-dean of the Morsani College of Medicine at the University of South Florida, sat in a room with 130 other deans and heard for the first time some news that reduced everyone but him to laughter. Walgreens, the ubiquitous pharmacy retail chain that’s usually open 24 hours a day, was going to start seeing patients.
The unamused Klasko thought of the mom who’s got a suddenly fevered child on her hands at 9 p.m. on a Wednesday. The mom who can either call the answering service for her doctor and hope he can do something constructive, or take the kid to the emergency room and wait out the serious emergencies until the child gets admitted.
Few deans and fewer hospital system CEOs today find the Walgreens example funny, especially since the chain started diagnosing and treating chronic conditions like diabetes and hypertension. The kid with the fever? Just the beginning. But that little convenience in care options has made places like Walgreens, Walmart, and other major retail establishments a new and serious competitor to hospitals. Walgreens disrupted traditional thinking and took its services straight to the consumer, and it worked big.
“We could have totally stopped that $19 billion juggernaut,” Klasko says, “if we had just kept our offices open later and kept the nurses who went to the drug stores.”
Is it any wonder why Klasko is looking at healthcare through the prism of Netflix instead of Blockbuster?
Klasko, now the president and CEO of Thomas Jefferson University and Jefferson Health System in Philadelphia, will talk disruption — not alteration — in the Google, Apple, and Facebook vein when he speaks at the Princeton Chamber on Thursday, October 8, at 11:30 a.m. at the Princeton Marriott Hotel & Conference Center. Cost: $70. Visit www.princetonchamber.org.
Klasko, the son of an undergarment salesman father and one-time bookkeeper mother, grew up in Philadelphia and started his professional life as a broadcast journalist in radio until the medical bug caught him. He earned his bachelor’s in chemistry and biology from Lehigh University and began medical school in 1974 at Hahnemann University (Drexel). He opened an OB-GYN practice in Allentown, Pennsylvania, and followed the prevailing thinking of a time when hysterectomies were by far the most common surgery in his field.
Then one night he was in a bookstore and noticed the titles of several nonfiction books about the emotional toll women deal with after having hysterectomies. He realized that his field, being 90 percent male in the 1980s, had no real, deep understanding of women. In the ‘90s Klasko became aware of the managerial issues healthcare systems faced and decided to put an MBA behind his medical experience. He earned his MBA from Penn in 1996.
Klasko became the dean of the Drexel University College of Medicine in 2000 and then the CEO and dean at USF in Tampa in 2004. He got called back to Philadelphia in 2013 to head Jefferson — the first person to hold the president/CEO positions singularly — to what he calls his dream job. He was drawn to Jefferson because the hospital and school wanted to take chances and try new approaches to healthcare.
Of Borders and Blockbusters. You remember having to go to an actual store to buy media, yes? Then you also should remember how suddenly that whole scene died. In books, there was Borders Books & Music, which staunchly held its belief that people would always prefer paper to ones and zeroes. Amazon and its Kindle E-reader cleared up that misconception in a hurry.
A similar fate befell Blockbuster, which, ironically enough, created Netflix when a customer named Reed Hastings got tired of high late fees and started a company that mailed DVDs to people without charging them for holding onto them a while. By the time online streaming became a real thing for movies, Blockbuster went belly-up by losing more than a half-trillion dollars to Netflix. The Borders and Blockbuster examples clearly showed the dangers of these once-giants thinking that they were retail storefront businesses, when in actuality, they were in the customer entertainment business.
Such upstart thinking, says Klasko, is exactly what the American healthcare system needs. And, thanks to the Affordable Care Act, it’s exactly what it’s getting. For the first time, he says, healthcare practitioners and institutions are forced to give high-quality care in order to prosper, so doctors are finally listening to his longstanding advice to stop thinking old-school. No longer will a doctor who botches surgeries to the point of having to re-operate, for instance, make more money than a doctor who got it right. The ACA rewards institutions and doctors who keep people from revisiting hospitals and punishes those who inflate healthcare costs and pad their own wallets through ineptitude, planned or otherwise.
“Anyone who thinks they’re a hospital company anymore is dead,” Klasko says. “They need to be a consumer health company.” And, like Walgreens, they need to make healthcare convenient for customers, which means taking the care to them and helping people be healthier overall, rather than waiting for patients to show up when they’re already sick.
Combating entrenched thinking. “Here’s something to think about,” Klasko says. “We’re still accepting doctors [into medical school] by the same criteria as 60 years ago.”
Those criteria are the ability of candidates to pass standardized tests, do well in science classes, and memorize biochemical formulas. In this checkbox-style world, someone who can memorize 19 formulas is a better doctor than one who can memorize 15; the focus is squarely on being a better med student. “And we’re surprised doctors don’t have more empathy,” he says.
Changing the DNA of healthcare professionals begins with how candidates to medical school are accepted and what they can offer besides rote recitation — largely because those unchanging formulas are available through technology at doctors’ fingertips these days.
At Jefferson, Klasko says, candidates are now admitted based on their innovative ideas and empathetic personalities as much as their ability to perform medicine. Most med schools, he says, have a team of long-entrenched doctors who judge whether a younger doctor’s ideas, innovations, even inventions are worth their time. And usually, younger, broader thinkers are met with a “well, that’s very cute” attitude, he says.
What you get, Klasko says, is a hospital buying a series of billboards that talk about the latest in robot-assisted surgery, but no real innovation in the doctor’s ability to perform surgery with the robot’s help. Worse, no doctor his age, 61, has had to prove competency in any specialty in the last 25 or 30 years. Klasko himself, an obstetrician, had at one point not performed surgery in a year and a half. To update his private pilot’s license, which is federally regularly mandated, he had to pass a competency test. To get his surgical greenlight when he moved from Tampa back to his native Philadelphia, “I had to pass a multiple-choice test,” he says. When he saw his first new surgery patient, her assurance that he knew what he was doing “came down to my ability with a No. 2 pencil,” he says.
Not Deflategate, but close. One of the new and most disruptive ways Jefferson is rewiring healthcare is through analytics and metrics. And the company that the hospital/university has paired with to do it is the same company that whispers what chance a particular play has of success into the ear of New England Patriots coach Bill Belichick.
Edge Analytics also helps Jefferson understand the probabilities of treatment and care, the probable progress of diseases, and anything else you don’t want your doctor to have to tell you. The sober truth, Klasko says, is that Coach Belichick is better informed about a third-and-six than most doctors are about the odds of cancer spreading and what to do to stop it.
Jefferson has used predictive analysis for at least a year, and in that first year, Klasko learned that the analytics made Jefferson 100 times better at healthcare “than those who think they can do it on their own.” Replace the ego with math, and a lot of good can happen. Just as long as you remember that math is another tool, not the answer itself.
“Healthcare needs to be disrupted,” he says. “Not changed, not tinkered around with. It needs to be 180 degrees from where it was.”