Jeff Bauer News
Challenges and Opportunities for Textile Services
Healthcare futurist, Jeff Bauer, says concerns about climate change could spur changes such as increased demand for reusables.
Originally published in Textile Services Magazine.
Looking into a crystal ball is always a risky way to make a living. But I’ve enjoyed doing it in the medical marketplace and healthcare delivery system since the 1970s. I’m probably batting around .800—one strike-out for every four hits in looking 2-5 years ahead. Most of the major changes I foresaw happening (or not happening) ultimately happened (or didn’t). My biggest problem has been timing. When things changed as I’d foretold, they tended to happen more slowly than I projected. This reinforces the perception that incrementalism is part of American exceptionalism. The U.S. changes at a slower pace than other countries.
However, regardless of timing, the COVID pandemic and political chaos are so disruptive that making predictions is probably impossible right now. Why? Because predictive modeling requires a system’s underlying dynamics to be stable. Its methodology is based on a fundamental assumption that causal relationships from the past will interact in the same way in the future. (See my book, Upgrading Leadership’s Crystal Ball, if you are interested in a clear and concise explanation of how predictive science works.) Extrapolating trends into the future makes no sense when the forces that shape these trends not only change on a daily basis, but change in ways that are impossible to define and measure. I’m a full-time futurist with 50 years of experience, and it’s taking me an incredible amount of time and effort just to stay confused these days.
Ongoing upheaval in causal relationships makes it impossible to foretell specific changes and how to prepare your business for them. However, based on a half-century of experience across the medical marketplace, I feel comfortable offering two general recommendations for your consideration:
- Don’t believe specific predictions made under current circumstances. Nobody, including me, can possibly foretell a specific future event with reasonable certainty for the time being. We are certainly headed into uncharted territory.
- Remember that American healthcare is local. We cannot know what’s going to happen in any one marketplace or political jurisdiction due to widespread differences between them, and we have no reason to believe the same thing will happen everywhere.
Since I’m arguing that the future of any healthcare enterprise is unpredictable, you might be wondering whether to finish reading this article. Fortunately, I am now going to discuss a well-established alternative to predicting—forecasting—which can help you identify possible futures and prepare your business for them. A forecast is an estimate of the probabilities of possibilities, like the chance for precipitation reported on a TV forecast of tomorrow’s weather. A 60% forecast of rain is also a 40% chance of something else, not a 100% prediction that it will rain. (Again, see Upgrading Leadership’s Crystal Ball to learn more.) Forecasting relies on a careful analysis of key forces that produce different outcomes in a system operating under a general set of circumstances, collectively called the climate. A forecast encompasses a realm of possibilities, things that could happen based on the interplay of resources and events within a given system. When the climate changes, the possibilities change.
A prediction focuses leaders on preparing for a specific outcome at a specific time—one unlikely to occur in periods like the present because causal forces are not interacting as they did in the past. On the other hand, a forecast helps identify actions that can lead to one of several possible futures. The business leader’s role is to make decisions that enhance the likelihood of desired outcomes and/ or diminish undesirable results. Innovation is almost always a key to success with forecast-based strategies in turbulent times.
Because I was a meteorologist back in the 1960s, I have based my work as a health futurist on forecasting methods originally learned in atmospheric science. Just as weather forecasters generally focus on a small number of variables that generate a specific form of weather (e.g., the probability of rain is largely determined by temperature, atmospheric pressure, humidity and wind), I have spent 50 years trying to understand four key variables that generate outcomes in healthcare. Summaries of each appear below.
- MEDICAL SCIENCE—In the long-run, health spending in the U.S. is shaped by scientific research on what improves health and saves lives. Expenditures in the 20th century were largely determined in the context of physician-led, hospital-based care to cure common illnesses and injuries once they occurred—the acute-care model. Resource allocation is now shifting to reflect significant differences in patients and their diseases—the precision (i.e., personalized) model. At the same time, research shows that advanced nonphysician practitioners can treat many patients at least as well as medical doctors and that many services now can be adequately provided in new ways and places (e.g., telemedicine, workplace, home). Old patterns of care will decline, but not disappear, so executives in textile services and other ancillary services should be looking for new demand created by new providers and new care-delivery sites.
- INFORMATION AND COMMUNICATIONS TECHNOLOGIES
Business comunications in the 20th century were conducted by telephone, and transactional records were recorded on paper. Enterprise call systems and photocopy machines were ubiquitous. They have largely been replaced by personal communications devices and electronic records, changes that are transforming how healthcare is delivered. With the additional development of new delivery logistics tailored to new care models (see previous bullet), 21st century technology is redefining the supply chain and suppliers’ realm of opportunities for positioning their products.
The number of healthcare dollars and how they flow through the system have consistently explained the evolution of American healthcare. Both factors are now moving in directions that do not follow historical trends and, therefore, invalidate predictions based on the past. Governments and employers historically “called the shots” through the health insurance they purchased for their beneficiaries. Patients had almost no say in how this money was spent, and payments were based on fees for specific services. Now, patients with “skin in the game” are expected to pay an increasing portion of the bill. Value-based payment models are tying expenditures to results and spending on healthcare is no longer rising every year as it did in the past. Textile service providers and other vendors must respond accordingly under unprecedented forms of competition in a stagnant (i.e., no real growth) market.
Just about every 10 years since the passage of Medicare and Medicaid in 1965, Congress has pursued health-reform legislation. Republicans and Democrats interacted in civil and predictable ways, producing relatively modest changes in reimbursement and care delivery. The situation is obviously very different now. Neither party has a clear and consistent plan for the future of healthcare, and the possibilities for compromise across the political aisle are slim to none for the foreseeable future. The good news is that forward-looking health systems are transforming their business models without waiting for direction from Washington. They are making impressive progress in local markets. Multi-stakeholder partnerships are a common denominator of their success, giving textile services an opportunity to work directly with providers in the development of new products, services and economic relationships (e.g., pricing).
I regularly examine the variables in my forecasting model and modify them to reflect changes in the health system’s underlying dynamics. I recently took the unprecedented step of adding a fifth variable that can no longer be ignored:
- CLIMATE CHANGE
New weather patterns are beginning to have an impact on healthcare (source), (source). Textile services will be affected in several ways, including the development of new textiles adapted to rising temperatures. Most significantly, textile services should benefit in the long run from a return to reusable supplies in healthcare as regulations and prices begin to reflect the high energy cost of disposables.
My outlook for healthcare over the next five years is that the future will be mixed, depending on local circumstances and individual responses to evolving challenges and opportunities. Given the changes that make it impossible to predict a uniform future, my best advice is to prepare for surprises and remember that they can be good and bad. Create a future that avoids problems and promotes possibilities. It’s time to reinvent the business, not to throw in the towel.
Originally published in Textile Services Magazine
Copyright 2020, Jeffrey C. Bauer