Driving Down Healthcare Costs Through Service Transformation
Becton, Dickinson and Company (BD) is a major American medical technology company with more than $10 billion in annual revenues. Like other healthcare companies, they face an industry that is undergoing radical change. An aging population and resultant cost pressures are having a major impact throughout the healthcare sector. Waste isn’t an option – every dollar spent on organizational inefficiencies is a dollar lost.
During Knowledge15, we spoke to Mike Zill, Becton Dickinson’s SVP of Global Shared Services, about this industry-wide drive for efficiency – and the role that cloud and shared services are playing in the transformation.
Bending the healthcare cost curve
We asked Zill about the state of the industry, and its implications for healthcare companies. According to Zill, “We’re in a very different world compared to 10 years ago. Back then, we had never heard of the Affordable Care Act. Governments weren’t being bankrupted by aging populations. Now, governments don’t have the money. So, they are bending the cost curve with legislation and technology.”
To respond, healthcare companies have to bend the cost curve as well – and that means looking beyond healthcare. Zill says that, “We’re bringing in S curves from other industries. That means using techniques that high-tech companies like Amazon use. We’re applying these so we have the scalability to compete. The companies who can bend the curve the best – delivering high quality at a low price – are going to win.”
The case for shared services
For Zill, shared services is a huge part of the solution. “Imagine isolated groups of people around the world trying to execute similar processes. They’re so dispersed that it’s very hard to know what they’re doing. Shared services collects these processes and puts them in a single location, so we can drive process understanding and efficiency.”
Shared services are about more than centralization. Zill stresses the need to optimize processes, saying, “At BD, we map the process and try to understand if every step is useful. For example, why do we need that approval? It’s 100% approved every time. It costs 30 cents per approval – and if you do a million a year, that’s real money.”
Learning from Amazon
Automation and consumerization of shared services is also essential. Zill laments the state of services today, saying, “There’s a lot of paper and email flowing around.” He continues, “Go back to Amazon for a minute. Have you ever talked to anyone at Amazon? In our business, for some reason we still touch 60% of the orders that come in. Why?”
Zill also says that the cloud is ready for prime time. “What most people don’t realize is that we are all using cloud services every day. As an individual, almost everything you use on the web is a cloud service. Now, enterprises are getting comfortable using things called clouds, and are adopting them as quickly as possible. Cloud, mobile and social are turning those old email and paper workflows into something more measurable and manageable. The stars are starting to align, and it’s very exciting – and very safe.”
“Service begins and ends with people”
When asked about what makes shared services successful, Zill talks about understanding end-to-end processes, and about needing technology to measure and manage processes. However, he is most passionate about people, saying that, “Service begins and ends with people. How can I build something that will help this person get what they need? It’s all down to Amazon – begin with one click to order. Because if people don’t use it, then it doesn’t matter what you do.”
Zill also stresses the top leadership needs to recognize the people who are driving service transformation. “Every time the top leadership is giving out awards, they have to say this wouldn’t be possible if we weren’t transforming the services side of this business – investing money in these new technologies and go-to-market strategies.”
Finally, Zill offers some pragmatic advice. “We want to shrink the distance between people and what they’re doing. So, think about your nearest neighbor, the work you’re handing them, and the work they’re handing you. How much friction is there around that? Just get your interactions with your nearest neighbor to be a little more efficient, and you’ve made progress.”