HIMSS, Ice Cream, and the Law of Diminishing Returns (LoDR)
By Mike Lucey
“Clearly the third scoop has fewer calories than the first and second. It is simply the law of diminishing returns.” This perverse application of the LoDR only returns a derisive, “You are pathetic” from my wife when used to justify the purchase of a large ice cream sundae. But I carry on and get the nuts on top — they are healthy.
It’s not that the LoDR doesn’t apply, just that I apply it to the wrong side of the counter. The medium at $2.75 (two scoops) and the large at $3.25 (three scoops) delivers less value to the ice cream lady. Extended (five or six scoops?), it would reach the breaking point where the ice cream would cost more to scoop then it would return in cash.
I wonder if some in our industry are confused as to which side of the counter they are on? More importantly, that the LoDR will flip the counter when we are not looking. Are we effectively and consistently asking the question, “Am I getting more than giving, or giving more than getting as I continue down this project path?”
Back in my days in financial services (maybe because our product was money), every project was systemically graded for current value. “Current” being the critical word. Not graded against the expected value we assigned at the start, but against the current costs, current value, and (here’s the kicker) current alternatives.
The Boston Globe recently published an article citing a Health Policy Commission study of the disparate cost of care in Boston-area hospitals. Using maternity services as an example, the study found large differences in what hospitals charge.
For us in the healthcare IT industry, it is notable that four of the five top hospitals are actively using or have recently installed Epic with a big price tag (three Partners hospitals, one UMass). This correlation raises the question: how much IT cost flows through the system, and are there effective checks against these rising costs? Did LoDR flip the counter in these cases?
To Epic’s credit, there is a concerted effort on their part to control costs that are often embedded in questionable customization. In other words, the folks at Epic are applying the concern of LoDR against the impulse of the client to work toward the elusive “best” at an ever-growing expense.
As we head toward HIMSS, our annual festival of IT goodies, we get to see a whole new set of “current” alternatives. Can we review the new stuff through the filter of LoDR? Stuff that is truly new for me, does it get me more then I need to give? And the stuff that is newer than what I have, does it keep me on (or get me back on) the right side of the counter?
And for me the ultimate question: who’s giving away free ice cream? Because free ice cream has no calories. Everyone knows that.
Mike Lucey is president of Community Hospital Advisors of Reading, MA.