David Knott

This is David Knott.

I'm a senior partner in McKinsey's Healthcare Practice, and today it is my pleasure to have Alan Karp, Executive Vice President of Healthcare Management and Transformation at Horizon Blue Cross Blue Shield, join me for a conversation around productivity in healthcare.

Alan, welcome, and thanks for joining us.

Alan, perhaps just to start,

I think at the highest level we have seen the application of technology and other measures that improve the productivity of industries over time.

I think one of the vexing challenges in healthcare is that we continue to throw a lot of technology at various problems and yet we see precious, if any, improvement in productivity over time.

And we all know that affordable quality is one of America's greatest challenges.

Any top-of-mind observations on why this is such a vaccine problem so entrenched for healthcare?

It sounds like one of the most fundamental issues is the alignment of the economic incentives.

And so you've talked a little bit about fee-for-service environment and then the types of operating models that have evolved over time.

Are there ways that you see today steps or progress being made where we can actually start to make some of these changes?

perhaps would you be able to talk a little bit about steps that Horizon Blue Gospel Shield is taking where you're trying to move forward today to capture some of these improvements?

It does sound like the direction is really trying to align the delivery system around evidence-based medicine, so these are clinically appropriate interventions, and the interventions themselves are happening in the appropriate set of care.

and make sure that it's fit for purpose.

When you think about some of the shifts inside of care, does that fit for purpose?

You mentioned the outpatient ambulatory infrastructure exists in as robust a form as is necessary, or do you see over coming years as perhaps a more defined set of services are provided in an inpatient setting?

There's a real emphasis on expanding some of the capacity

to accommodate more that can be done in an outpatient setting.

You know, some in the industry would say that the health systems have the most entrenched interests around the ongoing prevalence of the inpatient

setting as a place for care delivery and that it's harder to have health systems take the steps that shift more of the activity and care into outpatient settings.