The myth of excellence
Cathy Eddy, President, Health Plan Alliance
03/08/2016
Several years ago I read a book called “The Myth of Excellence: Why Great Companies Never Try to be the Best at Everything.” The authors are Fred Crawford and Ryan Mathews. My takeaways from this book involved performance expectations, prioritization, allocation of resources and reputation in the marketplace.
These issues come up in the discussions we have with members in the Health Plan Alliance. Three recent exchanges come to mind. One CEO called me to discuss NCQA – should the plan strive for excellent ratings or target being accredited and allocate limited resources to hit higher Star ratings, state Medicaid quality metrics and risk adjustment targets? We evaluated the marginal value of an accredited vs commendable vs excellent rating and what it would take to move the current measures. I encouraged the plan to focus its efforts where it has more than $80 million of incentive payments on the line.
We had another session with the leadership team of a plan that was evaluating innovation in operations. Three members of the Alliance team shared the trends we are seeing with members around the country. Some of our examples included increased attention on customer experience, brand reputation and service as key differentiators. Strategic alignment, clinical integration and risk management are also important areas to our plans.
Earlier this week I spent time with another plan that is looking at its 2.0 strategy and how that will position it for growth in the future with joint venture partners. Again, key to the discussion was reputation, performance and effective use of resources.
If we can’t be everything to everybody, where do we focus our time, money and people? How we answer this question will be key to our future success.
The gist of “The Myth of Excellence” is that value comes from five traits:
- Product
- Price
- Service
- Access
- Experience
In order to set yourself apart from your competition you should dominate in one trait and differentiate yourself in a second one. The rest of the traits need to be on par with the market to be competitive. If you are below par on any of these, you may not be considered a viable option, regardless of how well you are on the rest.
If you asked yourself where your health plan is on these traits, would you be:
- Level III: Consumer seeks the company (dominate)
- Level II: Consumer prefers the company (differentiate)
- Level I: Consumer accepts the company (operates at par)
- Consumer Underworld (below par)
Would your board and leadership team agree on which traits would set your plan apart from the competition? Are you prioritizing your resources to accomplish this?
The bandwidth in our health plans is increasingly being stretched. Our plans are being asked to add new product lines, expand geographically, form new joint ventures and produce additional revenue. Getting the most value from limited resources will be essential to future success.
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