Healthcare Needs Fusion Leaders

Recently, healthcare lost a great leader with the death of Bernard Tyson. As CEO of Kaiser Permanente, Bernard led important innovation. He was also just a good guy. He was my guest CEO at Stanford Business School. He urged the students to make a personal difference.

His death made me consider what kind of leaders will really transform healthcare. Healthcare remains the most complicated challenge of future generations. It is a source of miraculous innovation with accelerating economic burdens. Unquestionably, healthcare will exceed 20% of the U.S. GDP (heading toward 30%); and will employ more people than any other sector of the economy.

I have had a unique seat to view the industry. I’ve run a high-tech business in imaging and life sciences having revenue of $20B; I’ve run an employee plan where costs peaked at $3B; as a venture capitalist, I’m actively engaged with a number of portfolio companies that seek to change the trajectory of healthcare.

While there will continue to be broad themes, healthcare will likely remain highly fragmented. Industry consolidation and M&A hasn’t aligned outcomes in a meaningful way. Big announcements on “fixing healthcare” or broad partnerships have failed to deliver change. Healthcare is a “bottoms-up business;” you have to see it at the ground level.

Change requires the fusion of innovation with business leadership. Healthcare is a systems problem, requiring the simultaneous improvement of cost, quality and access. There is a full pipeline of innovation that will open up more opportunities. They include:

• Accelerating consumerism. Tools exist that allow consumers to manage their health and healthcare. There exists a wave of devices and apps that build transparency. It is important that consumers have choices, that they act like consumers. This will drive better outcomes.
• Innovating around chronic disease, particularly mental health neurology. The U.S. retains a huge competitive advantage in the biotech industry, which has been dramatically improved through this generation of FDA regulation. The next focus has to be on brain health. Increasingly, aging diseases and mental health will dominate healthcare spending.
• Leveraging artificial intelligence to lower cost. The next generation of tools must lower costs or, otherwise, improve outcomes. The next “mega-company” (i.e., Google) will embed artificial intelligence to improve drug development, cancer diagnosis, clinical outcomes and productivity.
• Creating service delivery models that take risk to improve outcomes. Tools or products to create payor/provider alignment for the purpose of lowering cost are accelerating. Tech-enabled models will bring digital innovation into healthcare outcomes.
• Enabling doctors to do their work. We have a generation of technology ahead of us where technology will enable doctors to be more effective. Moreover, we should focus on the “front door” of healthcare … i.e., primary care physicians.

I could go on, but the challenge of healthcare is not a lack of innovation. We have plenty of technology. Rather, it is a lack of leaders who can solve multiple problems at the same time.

More people will go to work in healthcare in the next generation than any other industry. In the past, healthcare could “piggyback” off of management tools from other industries. In the future, healthcare must develop its own leaders, those who can balance multiple (and sometimes conflicting) factors and still drive change. I call them fusion leaders.

Leaders must see both horizontally and vertically. In other words, you must be able to take platforms and technologies and implement them with a highly local context. In the tech world, you succeed by being a horizontal thinker. In the industrial world, you win by owning the domain. Healthcare requires both.

You must think big and small at the same time. All innovations must fit inside a mega healthcare context. So many ideas have died because no one asked, “who will pay for this?” At the same time, big pronouncements never work, unless they are tied to a specific doctor, patient, city or hospital. Good leaders won’t necessarily create scale. Rather they will be masters of customizing big ideas.

Leaders must think legacy and digital at the same time. Early companies investing in healthcare AI have largely failed. Leaders who really know how to apply new tools to old problems are rare. Solve problems from the bottom up.

Leaders must be innovators, operators and politicians. Think about the core mission of quality, cost and access. In an industrial company, these would encompass three organizations. In healthcare, the same manager must be good at all.

Leaders must be competitive and empathetic. We need leaders who can fight for the future, while always remembering that patients need good care. Healthcare is a practice, not a business. Not everyone is cut out for this!

The next generation of leadership practices should and must come from healthcare. Our schools (particularly MBA) need to provide more fusion leaders for healthcare. Let’s hope we can produce more people like Bernard Tyson.