Detroit Blinks as Definition of Health Expands

Posted on | June 21, 2007 | Comments Off on Detroit Blinks as Definition of Health Expands

Just last week it seemed as if Detroit had still not gotten the message — the world is changing. 11 states were still running radio ads meant to rally the people around resisting government intervention meant to force higher fuel standards on U.S. vehicles. “Change the subject” seemed to be the theme, with make-believe Americans saying “Why can’t they let me make the choice? I’m the one for better fuel economy, but for me safety is my top concern.”

Within health care we talk a lot about resistance to change. But it certainly isn’t unique to health care. Rather, it’s about power, influence and declining value propositions. Those in power use their influence to squeeze every last drop of benefit (financial and otherwise) out of dying value propositions. Why? I think there are three main reasons.

Number 1: They can.
Number 2: Change feels extra scary if you’re in control.
Number 3: They’re uncertain they can compete with a new value proposition (at least not at the same levels of historic profitability and market dominance).

Witness the auto industry. With gas exceeding $3 a gallon, energy front and center as a political and environmental/health issue, and Carl Levin and John Dingell (Senator and Congressman from Michigan) signaling they can’t hold the line any longer, the industry is finally muttering in a low voice “Coming About.” But the shift in tack is quite modest considering the stormy winds of change. The fuel economy standard in the U.S. for cars is 17.5 mpg and for light trucks (including SUVs and minivans) 21.3 mpg. That’s exactly where it’s been since 1983. Think about that. The auto industry has successfully and actively resisted clear signals for change for the past 24 years. And this while their competitors have embraced change and Toyota has become #1 in America. That’s the same Toyota whose domestic autos averaged 34.7 mpg in 2006. Now Detroit is acquiescing.

But the amazing part to me is this: It’s predicted that the new Energy Bill compromise will require 36 mpg for autos by 2022, and 30 mpg for light trucks by 2025. So to review, U.S. industry fights change tooth and nail to avoid a target 15 to 20 years out that is already met by their number 1 global competitor.

Regardless of sector in our society, we seem to have really perfected the “checks and balances” thing. But when it comes to transformation and exhibiting the leadership to, well, actually take the lead, we are remarkably shy. That’s not just a problem for Health Care. That’s a problem for America.