Forget Predictive Modeling, Try Leadership Forecasting

Philip Betbeze, for HealthLeaders Media , January 3, 2014

"I make the majority of my living giving speeches to hospital execs," Bauer says. "The most common comment I get after my speech is hospital C-suite people saying what they hated about it is that 'deep down inside, I know you're right,'" he says. "But courage to make the changes doesn't match the awareness."

For example, Bauer's main "pitch," strategically, is that CEOs need to quit thinking that horizontal integration will achieve anything that will move the system forward or alter its business model.

"Moving from two hospitals in a large community under the same ownership to 7 or 10, I think, is generally a waste of time," Bauer says. "I think we need vertical integration."

Vertical integration is much more difficult to organize and achieve, he says, but breaking down silos and remaking the organization into one that handles many more healthcare interactions than inpatient is the key to survival. That means adding talent and pieces of the businesses that make up the healthcare continuum.

But how many people are really doing that? It's a difficult idea to implement because to make such a leap, healthcare organizations probably have to run the risk of failing to increase the probability of doing something good, says Bauer. Horizontal integration may fail as well, but it's easier and results won't be known for quite some time. There's no going back if you horizontally integrate.

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4 comments on "Forget Predictive Modeling, Try Leadership Forecasting"

Jeffrey C. Bauer, Ph.D. (1/14/2014 at 4:53 PM)
While I appreciate Dr. Fischer's interest in my book, I respectfully disagree with his observations. He could not have made several of his comments if he had read the book first. For example, Upgrading Leadership's Crystal Ball clearly differentiates forecasting from scenario planning. Forecasting is a specific tool for estimating the realm of future possibilities; scenario planning focuses effort on preparing for a limited number of possible outcomes generally based on predictions, not forecasts. The last chapter provides considerable information about the strategic implications of this difference. Contrary to Dr. Fischer's assumption, my book also addresses the different circumstances under which predicting and forecasting are relevant in health care today. Mr. Betbeze's interview accurately captures my view that health care leaders are more likely to steer their organizations in better directions when they use possibility-driven forecasts [INVALID] not data-driven predictions [INVALID] to envision opportunities like vertically integrated, multi-stakeholder partnerships rather than predictable, horizontal networks of physicians and hospitals that have generally failed to solve the problems of cost and quality. Upon reading the book, Dr. Fischer will find extensive discussions of the modeling methodologies he suggests I should "learn about." I've been teaching and applying them for 40+ years and come to the conclusion that forecasting best fits the new and unprecedented realities of the 21st century.

Wayne G. Fischer, PhD (1/6/2014 at 12:36 PM)
What the quoted "expert" is describing is called scenario planning - it is a well-known and well-documented methodology. A classic case was Royal Dutch Shell's use of it to capitalize on the major disruption of crude oil prices back in the 1970s by OPEC. Either the author or the quoted expert misuse / confuse precision and accuracy, causing this reader to wonder if they really have any meaningful grasp of the subject matter. And the fact that if a system fundamentally changes, a model based on data before that change is no longer valid is a first principal of which anyone who has done any modeling is well aware. "Prediction," contrary to the quoted expert's implication, has a very important role to play in healthcare - operationally, tactically and strategically...because there are *many* types of modeling and prediction methodologies. I suggest the author and quoted expert learn about a few of them.

Frank Poggio (1/6/2014 at 11:11 AM)
Great piece, excellent points. Particularly liked his comment; "If the underlying circumstances that created that data have changed, then extrapolating from that data gives you stupid answers". In medicine the baseline and historical data are changing all the time. Medical protocols can get 'outdated' in a matter of months. Many of Mr. Bauer's points predict, as I do, that Big Data and Analytics will be the next HIT sink hole. Big Data and Analytics – The Next HIT Boondoggle! See: Frank Poggio The Kelzon Group




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