Clayton Christensen: Some healthcare industry problems call for a take-charge CEO

The American healthcare system is "sick and getting sicker," and executives must take decisive action to fix it, management guru Clayton Christensen tells Forbes.

Healthcare leaders have access to myriad management techniques, or "tools of cooperation and change," says Christensen, a Harvard Business School professor and author of "The Innovator's Dilemma."

But the roots of healthcare problems go so deep that leaders must take charge rather than give doctors, hospitals and payers an equal say in the process.

When there is no clear consensus on either what people want or how to get it, Christensen says, the only option is to make a unilateral executive decision--even if it means making some people angry.

He cited three problems that require a strong CEO stance:

1. Administrative costs: More and more healthcare expenditures are for unproductive administrative and overhead activities, according to Christensen. "They exist because we assume every hospital should be able to do everything for everybody," he says. To keep these costs down, he points to examples like that of the New England Baptist Medical Center, which has developed a specialized venue for specific procedures relating to "osteo issues," performing the same procedures as other providers at far lower costs.

2. Payment models that incentivize unnecessary care: Healthcare leaders must work to force payers away from fee-for-service and toward models like bundled payments or full capitation, in which insurers pay providers a flat amount per enrolled person, according to Christensen.

3. Promoting healthy lifestyles among employees: Healthcare leaders erroneously assume their employees already have a horse in the race, Christensen says, and employees' health burden is part of the reason many employers try to remove themselves from the system of paying for healthcare costs entirely. Christensen's solution, according to the article, is to incentivize exercise, weight management and preventive screening for employees, as in the case of El Camino Hospital's efforts to use gamification and social sharing to improve employee health.

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