Don Berwick is an amazing individual. I took a course he taught years ago at the Harvard School of Public Health, a few years after he founded the groundbreaking Institute for Healthcare Improvement, which he ran for many years. Don has always been an outspoken critic of “business as usual” in healthcare, and made a huge impact on Harvard Community Health Plan, a Boston area staff-model HMO, in the 1980s. I was always impressed by his good humor, clear thinking, and relentless focus on improving efficiency and quality in healthcare.

In 2010 he was Barack Obama’s recess appointment to head CMS, the US Centers for Medicare and Medicaid Services. He served well but not long enough: sadly, but not surprisingly, his formal nomination met with significant Republican opposition and his nomination was withdrawn at the end of 2011.

But Don is far from quiescent. He continues as a healthcare activist and at IHI, and he is currently running for Governor of Massachusetts.

He spoke at the American Hospital Association‘s Leadership Summit recently, and Cheryl Clark wrote a nice article about his presentation for HealthLeaders Media: Berwick Names 11 Monsters Facing Hospital Industry. In his presentation, Don discusses eleven terrible monsters that US hospitals must confront.

She quotes Don:

“We’re scared of the truth, the next wave of what we have to do to transform healthcare. And it crosses some scary landscape. It’s stuff we don’t want to think about and don’t want to talk about,”

His comments about the huge challenges facing hospitals and health systems reminds me of my ongoing concerns about the future of US healthcare provider organizations in the face of drastically shifting payment models. How can businesses that since their founding have been paid on the basis of quantity of care delivered suddenly be paid on the basis of cost effectiveness and quality of care? This is the challenge of trying to rapidly steer a very large ship to avoid an obstacle—many will meet with disaster. After all, this will require massive changes in information technology infrastructure, staffing, patient engagement, and mind-set, and not all health providers will be up to it. Clay Christensen, Jeff Flier and Vineeta Vijayaraghavan nicely summed up the challenges in this WSJ opinion piece. Perhaps this is why nine of 32 Pioneer ACOs are leaving the program.

So although this sounds all doom and gloom, I think the direction we are headed, in which we pay for value rather than quantity of healthcare services, is correct. In fact, the combination of incentives to improve value of care delivery, the imperative for patient engagement, and availability of health information to patients and providers will unleash tremendous innovation in healthcare delivery. But getting there will require significant rethinking and retooling, and many of our healthcare systems will not be up to the task. And first hospitals must confront their monsters.