Creating a value-based healthcare system: A conversation with Dr Omar Ishrak

People working in just about any field are nowadays too eager to talk about the use of 'modern technology' in their work. Artificial Intelligence, Gene Editing, Advanced Robotics are words thrown around almost casually. But how do any of these technologies make our lives better? What value do they add? In the hype surrounding what new technology can do, we don't ask ourselves enough how they actually change our lives. 

"Technology for its own sake doesn't really do anything," says Dr Omar Ishrak, former chairman and CEO of Medtronic, the largest medical technology company in the world. 

"It's useless buying machines if you don't have people who can use them, or people who need them. You have to be aware that you want to reach an outcome. Otherwise, you'll spend money and get nowhere," he says. 

Although Dr Ishrak captured public imagination in Bangladesh as the Chairman of the Board of Intel, he is best known as a medical technology industry leader, having overseen the exponential growth of Medtronic during his tenure as its CEO from 2011 to 2020. 

An electrical engineer by training, Dr Ishrak made his first forays into the medical technology industry during his PhD studies in ultrasound technology at the King's College London. As he strove to make ultrasound images better, he recognised early on that the improved images had to be appreciated by the users. Otherwise, that improvement made no sense. 

"What value does it create? What organ can I see better? And does the doctor really care if you see the organ better or not? Tying the whole journey from the technology to the value creation, I think, is what I learned over time, and I think that is what I'm trying to now continue to apply in bigger and bigger teams and more broad schemes," he says.

Although Dr Ishrak spent many years at General Electric, as President and CEO of GE Healthcare Systems, GE Healthcare Clinical Systems and GE Healthcare Ultrasound and BMD, it was when he moved to Medtronic in 2011 that he found an organization that was solely dedicated to improving healthcare outcomes through technology innovation. 

Medtronic laid out its Mission in 1960, when it was a small company based in Minneapolis with less than a 1,000 employees. Today, the company employs over 90,000 people in 150 countries and earns $30 billion in revenues, and yet the six tenets of the Mission still continue to drive the organisation.

 The first and central tenet of the Mission is to use technology to alleviate pain, restore health and extend life. 

"That means that just doing diagnostics is not Medtronic. Diagnostics by itself does not improve an outcome. If Medtronic improves diagnostics, Medtronic has to also figure out how to apply the diagnostic results to improve healthcare outcomes," says Dr Ishrak. 

The second tenet talks about picking and focusing what to work on, which, as Dr Ishrak explains, ensures Medtronic does not invest in too many things. The third tenet emphasises integrity of the company and its employees, the fifth talks about treating all employees fairly, while the sixth one is about giving back to society. Meanwhile, Medtronic's fourth tenet, fair profit, is perhaps the most interesting one.

"Why did they say 'fair profit' when they could have said 'make a profit' or 'maximise profit'? It's because when you create something of value then your customer will make a profit as well, or will have some economic value which you have shared with them."

Dr Ishrak lights up every time he talks about Medtronic's Mission. Clearly, Medtronic has massively benefitted from organising its strategy and growth around its mission. But is this true for all companies? Are most successful companies driven by a mission?

 "Absolutely. I don't see how you do without it. Without this, companies get broken up or fail because they don't know where they're going," he says, adding, "To be successful over the long term, you have to have a mission, a direction and core values that are sustained between generations of employees."

Sharing the value

Ever since stepping down as CEO and Chairman of Medtronic, Dr Ishrak has been able to spend more time to spreading the idea of value creation in 'bigger and broader schemes'. Two such schemes are located in Bangladesh, which is what brought Dr Ishrak to Dhaka recently for a few weeks.

The Minneapolis-based Children's Heart Link works with hospitals and providers in the emerging world to reduce the mortality rate associated with congenital heart disease in children, called pediatric heart disease. They work with hospitals in certain countries who have a basic capability in cardiac surgery and train them through an alliance with another Western hospital, whose employees are committed to go to the country and work with the local hospital to bring up their standards. Dr Ishrak has been associated with Children's Heart Link for almost a decade, and is working with the National Heart Foundation in Bangladesh at present, who are collaborating with a hospital in Leeds in the United Kingdom.

"The goal is to reduce the mortality rate associated with congenital heart disease treatment in the National Health Foundation. But through the process, we also found that the capacity of the hospital is limited, and expansion is probably needed sooner rather than later, because even if you improve the treatment, there are many waiting at the door and many of these children will die if they don't get treated," he said.

The other program Dr Ishrak is working on here is a community care initiative of the Medtronic Foundation – the part of Medtronic he continues to work with – and Brac in Bangladesh.  

"We are training community workers and giving them a tablet which has health screening tools programmed into it. The community workers will essentially go from patient to patient and electronically document their status. This information is then transmitted to the cloud where the data is looked at against established clinical guidelines; the patients who really need care are then immediately identified," he said.

The latter initiative is one Dr Ishrak also highlights when talking about how technology can be leveraged to improve healthcare in developing countries like Bangladesh, but once again, pointed out technology should be used with a certain goal and outcome in mind.

Creating a value-based healthcare system

If you buy a car and it breaks down five minutes after you have driven down the road, you take it back expecting a new car, or at least to have it fixed. Such logic, however, does not seem to apply to the healthcare industry. 

"In healthcare, if this happens, you essentially have to buy a new car," says Dr Ishrak. 

"In healthcare you pay for the service provided and not the value created," he says. "That then leads to a payment mechanism where everybody involved - from the equipment manufacturers, device manufacturers, drug companies, providers, doctors, nurses - are paid for what they do independent of the ultimate result. That creates a system where there is no real accountability for the end result (even if poor results are unintentional, which in most cases it is)." 

"And in the end this drives up the cost of healthcare."

Dr Ishrak envisions a value-based healthcare system where providers and other stakeholders are paid for the improvement, and everyone is held jointly accountable to reach that improvement. The idea is of course not new, but what Dr Ishrak did during his time at Medtronic was try to apply that principle on medical devices. He will readily admit that it's easier said than done!

"In practice it became very difficult because the Medtronic technology in the majority of circumstances couldn't provide the improved outcome on its own," he says.

In summary, Dr Ishrak said, "I found that there are three things that you really have to have". 

"The first is the need for a quantitative measure of improved health outcome from the treatment. The second is that you have to clearly identify the cohort of patients on whom a certain outcome is expected. For example, you can perform the same treatment on an 80-year-old and a 30-year-old, and you will possibly expect different results. So you have to understand the treatment cohort and the outcome one would expect for specific cohorts."

"And the third thing that has to be understood is: what are all the variables that are involved in achieving that health outcome improvement? All of the people and/or structures involved in that process have to be accountable. It cannot be just one stakeholder, but all have to be jointly accountable (financially)."

At first glance, the principle of a value-based healthcare system might seem more appropriate for a developed country, but Dr Ishrak points out as Bangladesh does not yet have a scaled and consistent healthcare system which has a payment mechanism, this is actually an opportunity.

"As you go into the payment mechanism, my strong recommendation is not to copy what is in the US, or in the West in general, which is a fee for service system," he says. "Start thinking of value right now. If you start from scratch and use today's technology, I think Bangladesh can even lead the adoption of value-based health care."

The benefit of having a 'value-based healthcare system', as Dr Ishrak envisions it, is that in the end, it improves health and drives better cost and efficiency.  

"If value-based healthcare can be successfully implemented, achieving improvement in health will be an economic driver, not a burden."