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McKinsey Interview on Rethinking Capitalism

Here is my video from the McKinsey website on the need for long-term investing in order to create superior value for their customers and why boards of directors must be prepared to stand up to activist investors urging short-term actions.

World Cup Draw: A More Professional Way

FIFA, the governing world body of soccer led by long-time mogul Sepp Blatter, loves controversy, chance and corruption. No doubt this generates lots of media attention--but it certainly does not instill a sense of equity in its decision-making.

How else could the world’s #2 team, Germany, be paired with #5 Portugal, #14 USA, and #24 Ghana?  All of these teams advanced to the next round in 2010!  Meanwhile the “Group of Death” has #3 Argentina’s group and also contains #45 Iran, #36 Nigeria, and #22 Bosnia. (Eat your heart out, Jurgen Klinsmann.)

FIFA’s latest manufactured controversy stems from its arcane method of placing the teams of 32 nations in eight brackets. Essentially, FIFA assigned each qualifying World Cup team into one of four pots. On Friday, balls corresponding to the teams were literally placed into four "pots" (actually bowls) and then teams were selected (at random) from the pots in a drawing. As each team's ball was selected from the pot, it was placed into an A-H grouping for the First Round. What a mess!

This is certainly not a difficult task by modern sporting standards. The world’s leading tennis tournaments figured this out decades ago. The NCAA basketball tournaments use a similar approach for both the men’s and women’s brackets.

How to do it? Just take the most recent FIFA rankings – that’s November 28, 2013, after all the World Cup qualifying games were completed – for each country’s team and place it in brackets from one to 32, eliminating higher-ranked teams that didn’t qualify. Here’s what the pairings would look like:

A

B

C

D

#1     Spain

#2     Germany

#3     Argentina

#4     Columbia           

#16   Croatia

#15   Chile

#14   USA        

#13   England

#17   Ivory Coast

#19   France

#20   Mexico

#21   Russia

#59   Australia

#54   South Korea

#51   Cameroon         

#48   Japan

 

E

F

G

H

#5    Portugal

#6    Uruguay 

#7    Italy

#8    Switzerland

#12  Greece

#11  Belgium

#10  Brazil

#9    Netherlands

#22  Bosnia

#23  Ecuador

#24  Ghana

#26  Algeria

#45  Iran

#41  Honduras

#36  Nigeria

#31  Costa Rica

While none of these brackets is easy, they are better balanced – and thus more equitable – than the mess that FIFA’s ranking system produced. Granted, the US would have to beat Mexico and Cameroon to advance, assuming #3 Argentina dominates this group. But that’s better than having to beat both #5 Portugal and #24 Ghana. And #11 Belgium couldn’t coast into the next round in a soft group like it has with Russia, Algeria, and South Korea.

By adopting this system, FIFA could restore an even playing field to the World Cup competition.  As it stands now, much of the competition will be determined by the luck-of-the-draw approach utilized to select the groupings. More importantly, teams that performed well in all competitions in the past year would be rewarded by accumulating objective points in FIFA’s ranking system.

The Greatest Leader Of Our Lifetime

Late this evening Nelson Mandela died at the age of 95. He was the greatest leader of our lifetime. His Long Walk to Freedom included 27 years in prison on Robben Island, hard labor, and cruel treatment for a political crime he did not commit.

Yet he emerged from prison on February 11, 1990, unbowed and unbroken, a proud man determined to save his nation from the civil war that had long been anticipated. His goal was to restore harmony between blacks, whites, colored and Indian. 

That evening in Cape Town, in his first public appearance in 27 years, he began by saying:

I stand here before you not as a prophet but as a humble servant of you, the people.
Your tireless and heroic sacrifices have made it possible for me to be here today.
I therefore place the remaining years of my life in your hands.

He concluded by telling the assembled masses:

It is only through disciplined mass action that our victory can be assured.
We call upon our white combatants to join us in the shaping of a new South Africa.
Our march to freedom is irreversible.
We must not allow fear to stand in our way.
Universal suffrage in a non-racial, democratic South Africa
Is the only way to peace and racial harmony.
It is an idea for which I am prepared to live for and fight for.
If needs be, it is an idea for which I am prepared to die.

Nelson Mandela indeed was able to achieve his dream and was elected president of the democratic South Africa, stepping down after five years.

How was this man, himself the victim of so much injustice, able to forgive his captors and work tirelessly for harmony between all the people of South Africa? He rose above his feelings of anger to recognize his greater calling to become the man of peace who could unite all his country’s people and put his country ahead of himself, his race, or his party.

For his vision, his passion for his cause, his compassion for his fellow people, and his courage to put his life on the line to achieve his goal, Nelson Mandela is the greatest leader of our lifetime. His life stands as a symbol of human capacity to set aside differences, ancient hatreds, and historic injustice to achieve peace and harmony.

On a personal note, although I have been to South Africa many times, I met Nelson Mandela only once, when he was in Minneapolis on a 2001 trip to raise funds for a museum at Robben Island.  Penny and I had fifteen minutes alone with him to hear his stories from his time in prison and his vision for the future of South Africa. He was so inspired about developing a new generation of leaders in South Africa and throughout the continent of Africa that we decided to fund the leadership development program he had created from this purpose. In an unrelated incident, in early 1997 when our son Jon - then a junior at Amherst College - decided to spend a semester in Soweto working as an orderly at Baraguawanth Hospital, he had trouble clearing customs as he did not have a work permit. A call from Winnie Mandela, at the time Nelson's wife, to the customs inspectors enabled him to clear customs and have a transformational experience that semester.

CNBC - Obamacare site tip of the iceberg: Ex-Medtronic CEO

"This is the Titanic." That's how former Medtronic Chairman and CEO Bill George described Obamacare.

"It's just at the iceberg and everyone is looking at the tip: HealthCare.gov," George told CNBC's "Squawk Box" on Wednesday. "It's not going to be solved by the end of the month," when the Obama administration has promised to have the troubled website working smoothly. Government officials and outside contractors have been rolling out improvements overnight for weeks.

At an Obamacare event in Florida, Health and Human Services Secretary Kathleen Sebelius said Tuesday she's confident that the government-run HealthCare.gov website is on the right track. She encouraged users who previously had problems to return—promising them a better experience already.

(Read moreSenior officialdrops Obamacare bombshell)

"You cannot solve a management problem with politics," said George, a professor of management at Harvard Business School. "Sebelius has done her time. ... Let's bring in the pros," people with private sector experience, he said.

Beyond the website, George said, "Look at this fiasco we have right now, we're trying to take people's insurance plans away; now we're giving them back." President Barack Obama acted "too late on the insurance plans."

Obamacare has to be fixed, he continued. "You're not going to repeal it. It's not going to be repealed because by 2017 this thing is going to be locked."

(Read moreObamacare may need bailout: Ex-HHS head)

One of the ways George said to fix the law is to give people an incentive for living healthier lives. Until then, he said, "We're going to have a huge snowplow effect of costs. It will not happen in this president's term. It will happen in the next president's term."

As for the tax on medical device makers, like Medtronic, to help pay for Obamacare, George called it a punishment for the industry's lack of support for the health-care law.

Bill George Awarded Prestigious Bower Award From The Franklin Institute

The Franklin Institute awarded Bill George its 2014 Bower Award for Business Leadership.  The Awards program, founded in 1824, is among the oldest and most prestigious honors bestowed in the United States.

Gayle M. Ober, Executive Director of the George Family Foundation, said: “This recognition of Bill George is well-deserved.  The Franklin Institute prize recognizes extraordinary business leadership, and Bill’s selection reflects the contributions he has made in the business, academic, philanthropic, and community realms.”

The awarded citation recognizes Bill George:

“For his visionary leadership of Medtronic Corporation, his promotion and writings on corporate social responsibility and leadership, as well as his extraordinary philanthropic contributions to education and health care through The George Family Foundation.”

Bill George’s business career was characterized by a mission focus.  As CEO of Medtronic for ten years, he measured success by the number of new patients the company was able to help each year “be restored to full health”—a number which grew from 300,000 to 10 million today.  As a professor at Harvard Business School, he has pursued a mission of building ethical leaders with equal vigor. Bill has written five books on leadership, informally advised numerous CEOs and emerging leaders, and contributed to the advancement of society through leadership on a variety of corporate and nonprofit boards. In addition, Bill has been instrumental in shaping the leadership funding focus of the George Family Foundation.  Influenced by his personal involvement, the Foundation has supported national and global leadership programs that train and nurture authentic leaders in all sectors

Past honorees of The Franklin Institute’s Bower Award for Business Leadership include Bill Gates, Gordon Moore, David Packard, James Burke, Roy Vagelos and Michael Dell. Past scientific laureates include Thomas Edison and Albert Einstein.

About The Franklin Institute

Founded in honor of America’s first scientist, Benjamin Franklin, The Franklin Institute is one of America’s oldest and premier centers of science education and development in the country. Today, the Institute continues its dedication to public education and creating a passion for science by offering new and exciting access to science and technology in ways that would dazzle and delight its namesake. Recognizing outstanding achievements in science throughout the world is one important way that the Institute honors its commitment to Benjamin Franklin’s legacy. For more information, please go to www.fi.edu/awards.

About the George Family Foundation

This mission of the George Family Foundation is to foster wholeness in mind, body, spirit and community by developing authentic leaders and supporting transformative programs serving the common good.  Founded in 1994 by Bill and Penny George, the Foundation supports innovative ideas in integrative health, leadership development, social justice, and spirituality in everyday life.

Six Ways to Save Obamacare

Only President Obama can save Obamacare.

Obamacare is not going to be repealed – not now and not in the future. However, there is real risk it could collapse under its own weight. If that happens, the President's credibility will collapse as well. Whether or not you support this President, this could seriously harm the health of our citizens and America’s fiscal stability.

The President will not succeed until he faces this reality: the challenge of Obamacare is not a political issue, it is a management issue. Playing politics--no matter how successfully--cannot solve management problems.

To save Obamacare, the President should:

#1: Replace the politicians with professionals. President Obama is a superb politician, but he needs to surround himself with experienced leaders who possess the capabilities he lacks. That means replacing HHS Secretary Katherine Sebelius (also a fine politician) with an experienced health care leader who has successfully created large-scale systems serving millions of people. My first recommendation is George Halvorson, who built Kaiser Permanente as its Chair and CEO. Other candidates include Dr. William Brody, MD, PhD, who currently heads the Salk Institute, and Lois Quam, who built Optum Health for UnitedHealth Group and was Hillary Clinton's head of global health at the U.S. State Department.

#2: Fulfill the promises that "No one would lose their current health plan" and "You can keep your doctor." The promises Obama made to build public support for the law are simply not true today. Already, two million people have had their health insurance cancelled, and the number could rise as high as 16 million. The law set uniform standards for all Americans at a very high level, knocking out high deductible plans and forcing levels of coverage that many people don't want or need. The President needs a quick fix by asking for Congressional approval to exempt all existing health plans for the next three years rather than forcing people into more expensive plans on the exchanges. Then HHS should notify participants in these plans they can keep their plans until January 1, 2017, providing adequate time to adapt to Obamacare.

#3: Turn healthcare.gov into a consumer-friendly website. The problem with the government exchange site is not a technical problem, but a management problem. Until this week, no one has been in charge of the overall system, leaving the techies working at cross purposes with each other and the federal bureaucrats trying to control them. Is anyone surprised this led to mass chaos? Worse yet, no one thought through what consumers wanted and how to make the system easy for them to navigate. Secretary Sebelius has acknowledged that HHS never did "end-to-end" testing of the system. Nor did HHS run pilot tests in any states. Can you imagine Apple not bothering to test the complete system before launching the iPad?

#4: Slow down Obamacare's implementation. After this false start, trying to force all Americans to choose a plan by January 1, 2014 is a formula for disaster. The President needs to take the pressure off by delaying the effective date of the individual mandate to July 1, 2014 or January 1, 2015. The latter is the new effective date of the employer mandate, which has already been delayed a year. Even the most skilled professionals can't fix this system overnight, so don't force an unrealistic timetable that causes frustration and chaos.

#5: Fix the problem of adverse selection before it spirals out of control. The underlying premise of Obamacare is to force high premiums on healthy young people to pay for the high cost of unhealthy older people. Early indications are that this isn't working, as high cost patients are signing up but young people are not. Many will simply opt out by paying a modest penalty for not carrying insurance – less than $100 in year one. To correct this problem, Obamacare should be modified to permit healthy and young people to enroll in high-deductible plans. This could lead to upward rate adjustments for the older population which better reflects their share of the costs. The President won't like this adjustment but it is inevitable, so he is better off being proactive than waiting for another crisis that could further derail Obamacare.

#6: Change the subject from insurance access for disease care to healthy living. For the past five years all the energy has gone into providing insurance access for all Americans – a worthy goal. Little has been done to address the real driver of health care costs: the declining health of the American people. More than 50% of health care costs are lifestyle-related, yet 95% of our efforts and the reimbursement that goes with it is for downstream care. By giving everyone full access to downstream care, there is no incentive to keep yourself healthy. In fact, the Affordable Care Act specifically prohibits charging less to healthy individuals, as most employer-based plans do. The only sustainable way of controlling costs is to incentivize people to take responsibility to keep themselves healthy with the support of their health care team, which should include health and wellness practitioners. For its part, HHS needs to move forward with the reimbursement shift for providers from "fee for service" plans to "paying for value" delivered to its patients, an essential step in shifting the focus.

Conclusion

Our health care system urgently needs to be fixed, but in its current form Obamacare is not what the doctor ordered. Republican efforts to repeal it altogether are a distraction that only serves to divide the country. In the three and one-half years since the Affordable Care Act was passed, the President has been unable to build support among the general population, nor is HHS ready to implement it in its original form. Instead, the President should take a pragmatic approach to give a new management team time develop a viable implementation plan that gives consumers time to adapt and incentives for staying healthy.  

Obamacare Overpromised and Underdelivered

As the disastrous rollout of Obamacare’s federal insurance exchange continues, politicians are palpitating over what went wrong.

On Tuesday Marilyn Tavenner, head of the Centers for Medicare and Medicaid (CMS), expressed regret for the difficulty people have receiving insurance. In typical fashion for the Obama administration, she blamed the contractors and high portal traffic. While President Obama has publicly apologized, no one has yet explained what really went wrong.

This fiasco is rapidly becoming Obama’s Katrina, and it could get a lot worse before it gets better. Hurricanes eventually subside, but flawed software systems rarely heal themselves. Throughout the push for national insurance reform, the President and his Democratic allies in Congress repeatedly overpromised and underdelivered. The Republicans didn’t help the situation, opposing Obamacare long after the U.S. Supreme Court declared it the law of the land.

We can trace the origin of the problems back to the inception of the Affordable Healthcare Act (AHA), which tried to accomplish far too much, far too fast. Instead of offering limited insurance coverage for catastrophic events, the President “overpromised” by offering full health care coverage for all Americans–without a sound way to pay for the cost of 30 million new enrollees. He promised individuals they could keep both their doctor and their insurance plan, knowing full well that the high standards of Obamacare would cause many physicians to refuse inadequate reimbursement and many insurers to drop their plans. 

As egregious as these errors were, they are overshadowed by the “underdelivery” of the information technology system managing these processes.  Better management certainly could have prevented these problems, but once they arose, the White House staff chose to treat this challenge as a political issue, not a business issue. Eager for power, President Obama’s staff, which has little experience in complex healthcare business issues, did not properly delegate this initiative to the head of Health & Human Services (HHS).

As a consequence, an extremely complex web and software application challenge is being treated as a political issue. The White House communications staff has tried to control the rollout of the healthcare exchanges, taking a political approach instead of recognizing this as an extremely complex technical and business issue. Sadly, this approach is quite typical of the Obama administration which has repeatedly placed politics ahead of leadership and sound management principles.

The fundamental error that Sebelius and Tavenner made was to think they could manage this massive project internally, instead of putting an experienced healthcare contractor in charge. As a result, no one wound up in charge. In her Congressional testimony on Tuesday, Tavenner ducked responsibility, blaming the contractors for the myriad problems involved.

All too late, HHS figured out it needed a general contractor. Fortunately, it chose CGI Federal and Quality Software Services (QSSI), a unit of UnitedHealth Group that was willing to step up immediately to the challenge. United’s Andy Slavitt, one of the nation’s leading healthcare experts, has personally taken charge of the project. He has been given an impossible deadline of November 30, 2013 to fix what would take most companies 6-12 months. We can only wish him well. If the deadline is missed for sound technical reasons, let’s hope that the Obama administration doesn’t try to blame QSSI instead of stepping up to its own responsibilities for these failures.

Many of us in the business and healthcare communities recognized this disaster in the making. We felt powerless to do anything about it though—especially since we weren’t being asked.

At the start of his second term, the President should have replaced a skilled politician like Secretary Katherine Sebelius with a seasoned healthcare veteran like George Halvorson, former Chair and CEO of Kaiser Permanente, the nation’s largest non-profit healthcare system. Halvorson, who retired at the end of 2012, successfully implemented the nation’s leading health care information system at a cost of $1.8 billion. It’s still not too late for the President to ask Halvorson to save his beloved plan.

Ironically, the states that built their own health care exchanges, such as New York, California, Kentucky, and Minnesota, have fared much better than the federal exchange. What the Obama administration should have done was to test out its system on a pilot basis in one or two states before rolling it out nationally. That’s what any private company would have done.

When the federal exchange is finally up-and-running, we can turn our attention to the real questions: how many people will actually sign up? Will they include the healthy young people the administration is counting on to offset the high cost of older, sicker Americans? How will people react to their inability to retain their current plans and their doctors, a direct contradiction of the President’s promises? How will the government fund the high cost of the new patients in the system?

Ultimately, this administration must get serious about focusing on improving the health of our population rather than focusing downstream when people are really sick. An integrative approach to health in mind, body and spirit that integrates the medical system with a wide range of health and wellness practitioners is required to put America on a healthier path and bring health care costs in line with other nations. Without this, we cannot bring costs under control. Without tackling that fundamental challenge, any IT system is built on a shaky foundation.

A Solution to Our "Manufactured" Crisis

Unlike our counterparts in Southern Europe, the United States is blessed to have a fairly steady economy these days. While economic growth is not as robust as it has been in years past, it is at least solid and jobs are steadily returning in the private sector. Financial markets reflect the solid outlook for leading U.S. industries like information technology, health care, energy, automobiles, and basic manufacturing industries. The U.S. has become the world's leading energy producer, helping to ameliorate our long-standing dependence on foreign oil that has led to unfavorable trade balances. Even the enormous government deficits of the last decade are starting to decline, thanks in part to the involuntary sequestration of spending.

A Manufactured Crisis with No Easy Way Out

So why are we flirting with a historic default on U.S. government bonds that will harm the U.S. credit and credibility for decades to come? Simply stated, our political leaders have manufactured a crisis. They know they are playing with fire, but no one seems to know how to put it out.

At this weekend's meetings of the World Bank and International Monetary Fund, world financial leaders like Christine Lagarde, head of the IMF, and Jim Kim, president of the World Bank, were almost apoplectic in their dire warnings about the impact of a U.S. default on the global economy. Even the threat of a default risks “massive disruption the world over,” said Lagarde on Sunday. U.S. leaders like Jacob Lew, Secretary of the Treasury, and Jamie Dimon, chair and CEO of JP Morgan, echoed similar concerns but offered no viable solutions.

In the past two years many U.S. political leaders seemed to enjoy beating up on the Europeans for the fiscal crisis in Greece that threatened to spread to Italy, Spain and Portugal. While Germany's Angela Merkel steadily worked to solve the problems through austerity and restraint, U.S. leaders and commentators like Paul Krugman took potshots at the Germans for not bailing out the Greeks with greater deficits and expanded borrowing.

The big difference here is that Greece's fiscal crisis is real, while the U.S. problems are entirely the result of a dysfunctional political system. The blame can be squarely placed on leaders who fail to put their country ahead of personal political gain. Sadly, there is no easy way to overcome this political crisis, as the sides are so polarized. They are likely to remain so due to the gerrymandered Congressional districts that created the split in the first place.

I feel confident we will find a way to muddle through the artificial debt ceiling, even if President Obama has to violate the law to do so, but the damage being done will stay with us for years to come. The Chinese and other big lenders will eventually find alternative currencies or a reserve currency basket where they can park their funds. Interest rates will rise, giving an upward nudge to inflation.

But what about Washington? When a power vacuum is created in a democracy like ours, other forces take over. Under the leadership of Chairman Ben Bernanke, the Fed has been offsetting the lack of fiscal policy during the last four years by making ever greater uses of monetary tools like quantitative easing. Bernanke's successor, vice chair Janet Yellen, is likely to continue these policies until Congress and the administration get their respective acts together, which could be a long time.

A Solution for this Manufactured Crisis: "Think Local"

The solution, I predict, is that states and municipalities will steadily assume more power. As federal entitlement programs assume an ever-larger share of the federal budget, they will squeeze out spending for most domestic programs. At present no one in Washington seems to have the political will to solve the looming fiscal crises of Social Security, which could actual be resolved quite easily, and Medicare/Medicaid, which will become an increasing sinkhole for funds for the foreseeable future until we get serious about healthcare costs.

This puts the burden for quality of life on the backs of the governors and big city mayors. Given the diversity of the country across 50 states, this may be a good thing. Locally-elected officials are that much closer to the people who vote for them and thus more responsive to their needs. By returning power to states and municipalities, we empower local people and their elected leaders to tailor solutions to their local problems.

Health care and education are essentially local issues. The complexities of health care and education, coupled with the growing diversity of our states, are so great that they defy "one-size-fits-all" national solutions. Ultimately, local leaders will come up with sounder, more practical solutions that fit the needs of their unique populations. They will be more effective at engaging the business community and non-profit organizations to partner with them in seeking these solutions. Instead of spending money and time lobbying in DC for little gain, business and non-profit leaders can focus on making things work locally and on contributing their own resources to enhance quality of life for their employees, dependents and communities.

My bottom line: because of the dysfunctions in the federal government and the growing diversity of the country, we are witnessing nothing less than a historic shift of power to states and municipalities. In the end this will prove healthy for our country as we generate higher levels of commitment and collaboration among the government, business and non-profit leaders that lead to higher quality of life for all Americans.

John Noseworthy: Overcoming Fragmentation in Health Care

Here is an exceptional article, written by Mayo CEO John Noseworthy, addressing fragmentation in health care & solving it through information sharing (http://bit.ly/1cDUkE6). Mayo is taking the lead nationally as a role model of how to solve these problems.

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America is a nation of innovators and entrepreneurs. We are a nation that cares for our fellow citizens, yet we have failed to create a health care system that fully meets the needs of people in this country. Health care is fragmented, and the quality of care varies widely, which leads to unsustainable health care spending.

As the Affordable Care Act (ACA) continues to be implemented, we are seeing increased access to insurance coverage for many. But the ACA does little to address fragmentation, quality of care, and the sustainability of the financial model for U.S. health care — how health care is paid for. More work is needed to achieve the drastic change in market forces that is necessary to create a sustainable health care system. To achieve this, we must reduce fragmentation of care, ensure that the highest quality care is delivered in all settings, and build a sustainable health-care financial model.

Addressing Fragmentation

Health care is experiencing a significant trend of consolidation through mergers and acquisitions. At Mayo Clinic, we have chosen a different path — a path focused on sharing our most scalable product:  our knowledge. We believe that fragmentation and variability in care may best be addressed by creating tools to share knowledge than can be used by providers as they care for patients in their own communities.

At the foundation of our approach is a knowledge-management system — an electronic archive of Mayo Clinic-vetted knowledge containing evidence-based protocols, order sets, alerts and care process models. This system, which can be made available to physicians in any location, brings safer care, better outcomes, fewer redundancies, and ultimately cost savings for our patients. Ask Mayo Expert, one of the many tools in our system, helps physicians deliver safe, integrated, high-quality care. Through this system, physicians can find answers to clinical questions, connect with Mayo experts, search national guidelines and resources, and find relevant educational materials for patients. This knowledge is updated in real time and made widely available.

We have used this knowledge-management system to support the creation of our Mayo Clinic Care Network, an affiliation model rather than a merger or acquisition model. This tool supports health care professionals in their communities, enabling them to provide better care locally at lower cost. This network has been built over two years and includes 21 health systems and hospitals in the United States, Puerto Rico, and Mexico — all of which use Mayo Clinic-vetted knowledge so that other patients can benefit from our 150-year history of innovating and improving patient-centered care.

Addressing Uneven Quality

The proliferation of mandated quality measures and programs is daunting and some would argue has done little to improve quality and transparency for health care consumers. Quality in health care must be based on a comprehensive look at the entirety of a patient’s experience. It is alarming to see more than a two-fold variation in health care quality across the country. Streamlining quality of care can be difficult, which is why we’ve incorporated the use of engineering principles to improve our quality outcomes, safety, and service. We purposefully design, implement, and systematically diffuse quality-improvement efforts at all of our locations around the country. Through this commitment, Mayo Clinic physicians and scientists have contributed more than 400 peer-reviewed papers on quality improvement in the last five years.

The promise of the emerging science of health care delivery is profound, some say game-changing, in its ability to both reduce costs and improve quality. The full potential will be realized through the distribution of the right tools and resources. One such resource is the work of Optum Labs, which we formed with Optum earlier this year. Optum Labs, an open R&D facility with a unique set of clinical and claims data, is being used to drive advances that will improve health care for patients and our country. We are now inviting others — providers, life science companies, research institutions, consumer organizations, and policy makers — to be part of Optum Labs. This opportunity to apply world-class analytical tools to both cost and quality will provide the evidence necessary to deliver care that reduces costs and increases quality at the same time. This effort will allow health care to finally measure value for patients and payers.

Creating a Sustainable Future

Investment in health care is critical at this time. At Mayo Clinic we are investing in new areas of research that will define the future of health care, such as individualized medicine and regenerative medicine. We are also intentionally investing in our most precious resource: our staff. We constantly strive to have the most talented health care workforce anywhere in the country and are investing in their growth and knowledge expansion. For example, we have initiated team-based methods to enhance learning about new regenerative-medicine therapies that help us tailor diagnostics and hold promise to teach the body to heal itself from within. We use the same team-based learning approach to drive ongoing improvement in the quality of care through the discipline of the science of health care delivery.

Just as the private sector must continue to fund research, the same is true for government. Funding for the National Institutes of Health and other agencies is essential for the health of Americans and the economic vitality of our country. Recent reductions in research funding put our nation’s competitiveness, economic security, and future at risk.

We also must embrace the elusive goal of value — higher quality of care at lower cost. We need a payment system that recognizes the spectrum of health care delivery across primary, intermediate, and complex care while rewarding the quality and value of each. This includes all payers — both private insurance and government-funded programs, particularly Medicare. The sustainable growth rate should be replaced with new, negotiated payment models that tie reimbursement to quality outcomes across the spectrum of care.

To transform health care in America into high-quality, patient-centered care that the nation can afford, we must address fragmentation, we must address variable quality, and we need to create a sustainable health-care financial model. Collaboration is key. Mayo Clinic has a long history of innovation focused on improving the value of health care, but we can accomplish much more by working together — integrating and sharing knowledge with one another.

Together, we must create the future of health care, a sustainable future that Americans expect and deserve.

Video - Almanac: Mayo Clinic Expansion

From DMC, August 13, 2013

Former Medtronic CEO and business ethics leader Bill George called Destination Medical Center "the most important thing for Minnesota's future" in an interview with TPT's Almanac last week. 

George, a member of the Mayo Clinic Board of Trustees, was appointed to the Destination Medical Center Corporation Board, which is the governing board responsible for overseeing the DMC initiative.

"... It's brand new - it's a whole new idea that has never been tried here - I'm not sure where it's ever been tried," he said of the $6 billion economic development inititative that will leverage Mayo Clinic and private development to ignite growth and create jobs over the next 20 years. 

"I see this as the most important thing for Minnesota's future," he said. "This is making Minnesota a health care mecca. Our best opportunity for economic growth, jobs and good health is making Minnesota the healthiest state in the nation … that should be our goal."

Watch the full interview with George on TPT.