When the Patient Protection and Affordable Care Act was passed in 2010, it presented the notoriously complex challenge of reducing health care spending by $200 billion over the course of a decade. Because this endeavor would impact (and surely meet resistance from) multiple stakeholders, it would need to be led by an individual with experience in the three major sectors of health care: private (e.g., insurance providers), nonprofit (e.g., hospital systems), and public (e.g., federal and state agencies).
Armed with $10 billion to test new payment and delivery models, the Centers for Medicare and Medicaid Services (CMS) turned to Patrick Conway, MD, who had previously worked as a consultant at McKinsey (where he had developed an understanding of private investors and cost models), as a White House fellow (which had provided him with a working knowledge of the breadth and limitations of government policies), and as a practicing pediatrician (which had provided him with direct experience in how payment policy could shape the delivery of care). Taken together, his tri-sector background uniquely positioned him to align stakeholders in all three sectors to pioneer radically innovative models of health care delivery. In just five years, the CMS has tested more than 26 different payment models across all 50 states, with many of these models demonstrating multi-million dollar savings. More impressive than these results has been the unprecedented collaboration across the private, nonprofit, and public sectors within the field of health care.
Dr. Conway is an example of what those in business call a tri-sector leader. Tri-sector leaders have a deep understanding of all three sectors, often because they have had years of experience within each individual sector. Such individuals are well poised to navigate each sector’s culture, to leverage tacit knowledge, and to align incentives in order to solve complex problems. Outside of health care, tri-sector leaders have been central to progress on some of the world’s most pressing crises, including water scarcity, energy access, and climate change. Within health care, such leaders remain in short supply, yet the industry’s current challenges call for tri-sector leadership precisely because they are so broad and intransigent.
Characteristics of Tri-Sector Leaders
Nick Lovegrove and researchers from the InterSector Project have followed more than 100 tri-sector leaders in various industries and have identified six fundamental traits that make them effective:
- Balanced motivations. Independent of their current sector, tri-sector leaders ultimately want to create public value by balancing motivations to have influence (often in government), to create wealth (often in business), and to demonstrate social impact (often in nonprofits).
- Transferable skills. Tri-sector leaders often develop specific skills in one sector (e.g., modeling profit margins at a private company) and then apply these skills advantageously in a new sector (e.g., overlaying different profit margins to policy proposals in a government setting).
- Contextual intelligence. Each sector carries its own language, culture, and set of key indicators (e.g., profit in the private sector, mission in the nonprofit sector, and policy in the public sector) that tri-sector leaders know how to recognize and communicate across sectors.
- Integrated networks. Because most sectors often hire talent from within, tri-sector leaders distinguish themselves by recruiting expertise across sectors to diversify thought in their teams.
- Prepared mind. Opportunities for leaders to move from one sector to another are often unplanned, but, in the words of Louis Pasteur, “chance favors the prepared mind,” and thus tri-sector leaders are prepared for such opportunities both mentally (i.e., they are willing and eager to try a new sector) and financially (i.e., they can accommodate a potential salary cut).
- Intellectual thread. Tri-sector leaders maintain focus on similar problems when transitioning between sectors to develop a holistic expertise of a topic from different perspectives, resulting in a trackable intellectual thread.
While each of these individual traits is valuable to any leader, the research by Lovegrove and colleagues indicates that the combination of all six traits together constitutes the most distinguishing characteristic of tri-sector leaders.
Applying Tri-Sector Leadership to Health Care
Because of the broad and intransigent nature of today’s health care challenges, tri-sector leaders such as Dr. Conway are increasingly needed to lead in all sectors of health care. For example, CareMore, a pioneering value-based health plan and care delivery system with over $1.2 billion in revenue, recently promoted Sachin Jain, MD, MBA, to the position of CEO. Dr. Jain’s combined experience, which includes training in internal medicine, serving in public office at CMS, and holding the position of Chief Medical Information & Innovation Officer at Merck Pharmaceuticals, allowed him to expand the plan’s “extensivist” model to over 100,000 individuals covered by Medicare Advantage. In doing so, CareMore has been able to reduce health care costs by delivering highly coordinated services to extremely high-risk patients.
Bob Kocher, MD, is another prime example of a tri-sector leader within health care. After medical training, consulting at McKinsey, and working on the Affordable Care Act as a member of the Obama administration, Dr. Kocher joined Venrock, where he invests in disruptive health care technology start-ups at the interface of all three sectors.
Leaders like Drs. Conway, Jain, and Kocher are improving health care, but the problems requiring cross-sector leadership in health care far outweigh the number of tri-sector leaders we are developing. Outside of health care, efforts to develop tri-sector leaders include dedicated tri-sector coursework tracks within graduate schools, foundation-funded tri-sector fellowships, and cross-sector civic programs. While opportunities in health care are not nearly as developed, there are some pioneering examples that could be scaled up to cultivate more tri-sector leaders in the early, middle, and late stages of the career path.
For much of the workforce in health care, the initial framework for understanding the challenges that we are facing takes shape during formal education. Increasingly, medical schools and nursing schools have created integrated joint degree programs in business, public health, and public policy. Additionally, some medical school curricula have integrated such disciplines into longitudinal “paths” required of all students in areas such as entrepreneurship and health policy. For those interested in even further immersion, private-sector firms such as McKinsey offer visiting “rotations” designed for early-stage health care professionals.
Developing tri-sector leadership for mid-career health care workers can be pursued best through a growing number of fellowship programs. In addition to the well-established White House Fellows program, foundations are also creating cross-sector opportunities. For example, the Robert Wood Johnson Foundation recently launched its Change Leadership Programs targeting both health care and non–health care workers to collaborate on cross-sector projects.
Individuals in the late stages of their career can play two different roles in cultivating tri-sector leadership. First, they can diversify their teams by intentionally filling top positions with leaders outside their sector. For example, multiple hospitals systems are “insourcing innovation” by recruiting expertise outside their sector into their administrative and research teams. Second, established leaders may themselves look for opportunities outside their sector. These later career transitions may often be the result of consulting that integrates the networks of multiple sectors.
Developing more tri-sector leaders may be the inspiring innovation our workforce needs to tackle health care’s most challenging problems. By recognizing cross-sector experiences and transitions as a novel and underutilized form of leadership development, we may be able to amplify the effect of our current talent pool. Moreover, by promoting a culture that breaks down sector silos and encourages collaboration and transitions, we will also attract a more innovative and talented workforce.
This article originally appeared in NEJM Catalyst on June 20, 2016.