What Can Academic Medicine Learn from Netflix?

Much has been written lauding the ability of Netflix to disrupt its industry not just once but twice. It artfully replaced the movie rental store with DVD delivery by mail, vanquishing competition like Blockbuster. It repeated the feat with impressive self-cannibalization of its first disruption through the introduction of video streaming. Today, Netflix stands tall accounting […]

Much has been written lauding the ability of Netflix to disrupt its industry not just once but twice. It artfully replaced the movie rental store with DVD delivery by mail, vanquishing competition like Blockbuster. It repeated the feat with impressive self-cannibalization of its first disruption through the introduction of video streaming. Today, Netflix stands tall accounting for 34% of peak wired download traffic in the home streaming video business with YouTube in distant second at 13%. The impressiveness of Netflix’s external wins is driven by the stoutness of its internal culture well disseminated throughout the organization’s hierarchy.

Within the business of healthcare, there exists an indisputable need for reform at several levels. Improved usage of the available resources to reconcile the system’s inefficiencies is high priority, as evident by the Institute of Medicine’s description of a gaping “quality chasm” that needs crossing. Within the arena of academic medicine specifically, there exists room for a more novel approach in bridging the gap between the lab and the market. Offices of technology transfer have garnered poor reputations in commercializing innovative ideas. Root causes cited for shortcomings are centered on leadership, stemming from entrepreneurship inexperience and a dearth of industry engagement. We look to prominent academic medical institutions like Harvard’s Massachusetts General Hospital and Mayo Clinic to provide the latest medical breakthroughs, but there exists no simple framework in place for these outstanding institutions to diffuse these brilliant ideas into the open market. This issue in fact translates across nearly all academic disciplines and is at the heart of the value proposition of institutions such as Cornell Tech that cultivate an interdisciplinary entrepreneurial spirit.

The current barriers preventing commercial reward of breakthroughs made by powerhouse academic medical institutions serve as a warrant for deeper investigation into its organizational culture. Within academic medicine, there exists a unique set of values, attitudes, and beliefs. At the core of the field, everyone tacitly shares a mutual respect and appreciation for evidence-based patient care, research-driven advancement, and education of the next generation. This translates into a unique set of values, as exemplified by the Hospital for Special Surgery: excellence, creativity, passion, teamwork, and integrity. Artifacts of these beliefs and values outwardly translate to state-of-the art facilities, brilliant faculty from impressive institutional pedigrees, complex clinical cases, and the word-of-mouth reputation of the hospitals themselves.

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Arguably one of the most significant artifacts is research publication, which is judged by journal reputation and impact factor. Innovative research is celebrated with publication and presentation at national conferences, which affords the collaborators the opportunity to disseminate their ideas. An often forgotten (or legally forbidden) alternative to mass diffusion of an idea is entrepreneurial commercialization. Instead of viewing startups spun out of nonprofit academic hospitals as purely capitalistic behavior, approaching these institutions as incubators for world-changing ideas that save lives should be advocated. There exists a clearly unique culture within academic medicine that may play a major role in the reason behind our healthcare system’s sluggishness to reform and reinvent itself.

One organization that reinvented itself twice in the same decade was Netflix. The unique DVD delivery system and leverage of new video streaming technology were mere artifacts of the organization’s cultural successes. What is Netflix doing right, and what can it teach physicians and scientists within academic medicine? When Reed Hastings and Patty McCord of Netflix delivered a 127-slide deck, arguably “one of the most important documents ever to come out of Silicon Valley” on its envisage of the firm’s culture and motivated performance, it reinvented human resources. Three principles Netflix hangs its hat on that most readily translate to academic medicine are as follows: (1) act in the best interest of your organization, (2) curtail bureaucracy and enable creativity with fewer rules and better processes, and (3) recover rapidly.

Netflix internally popularized “act in the best interest of Netflix” as it relates to employee expensing as both a gesture of good faith in its people and to inculcate a responsible relationship with the brand. Similarly, a codependent relationship between individual physicians and scientists with the academic center should be welcomed as neither can thrive without the other. In some academic settings today, individuals value their research before the institution itself resulting in goal misalignment. One way this can be circumvented is through the hospital publicly recognizing individual members with every success while incentivizing departmental, rather than individual, successes via merit-based access to funding and amenities. Doing so fosters the habit of doing what’s best for the institution, while leveraging the greater brand to bolster individual success. Once goals are aligned from the bottom up and the appropriate schemas are in place for everyone to ‘act in the best interest of’ the academic hospital, the table is set for the entire organizational team to move in tandem seamlessly.

Netflix illustrated how process mechanisms in complex organizations are instituted to “stop the chaos” but result in the adverse effect of driving the best talent away. Such process mechanisms translate to “bureaucratic” behavior that shackles the creativity of their high performing employees, a problem that was resolved by empowering Netflix employees with unparalleled freedom in the workplace. This attitude has crystallized into the famous “no vacation policy” at Netflix that symbolizes its refusal to track its trusted employees with unnecessary policy. In academic medicine, there are numerous instances where processes cannot and should not be hastened, especially with regards to patient safety. However, where possible, red tape should be removed and trust should be transferred to arguably some of the world’s most philanthropic people. Given the sensitivity of medical content, it is fair and pragmatic – not optimistic – to assume that those within academic institutions are qualified to assume greater responsibility. Instituting overbearing rules and processes for the sake of error prevention automatizes the workplace, devalues the judgment of the institution’s bright minds, and may result in the loss of talent Netflix portended. In empowering the physicians and scientists who are already acting in the best interest of the academic hospital through fewer bureaucratic processes, room is made for creativity to take footing.

Numerous reports from academic publications to media outlets have proclaimed players in the healthcare space to be too slow to respond, technologically antiquated, and overall lacking in genuine innovation. To an extent, the historically hierarchical structure within academic medicine has engendered such behavior. In organizations like Netflix, a “highly aligned but loosely coupled” structure facilitates interdisciplinary trust with a significantly “flatter” hierarchy. In academic medicine, there are significantly fewer opportunities to make mistakes so the idea at Netflix of “rapid recovery” doesn’t hold literally. However, it conveys the entrepreneurial spirit of trying unfamiliar processes with the preparation to adapt. This spirit can manifest in multiple ways within academic medicine, whether it be through the facilitation of innovative startups as aforementioned or early adoption of the newest technologies. While both these scenarios can result in failure, protective systems should be put in place to facilitate the trial as well as its recovery to learn from the error. If a flatter organizational structure with support for creativity like that of Netflix’s were incorporated into the culture of academic medicine, the stage may finally be set for a paradigmatic shift in healthcare.

Requests for reform in healthcare are longstanding. This perspective addresses the fundamental change that must occur both organizationally and culturally before establishing a sustainable body capable of adapting to change in the long run. As of now, overseeing processes from both federal and business leadership are in place across the board within healthcare. A salient point made by Netflix leadership in its cultural reinvention is that overseeing processes are meant to curtail error but result in the downstream effect of driving the most talented away from the field. While funding is a huge factor, this loss in talent may also play a large part in explaining the national physician shortage. Numerous processes have been imposed with the best intentions to control the “chaos” of an increasingly complex and unmanageable healthcare space, but the novel solution Netflix offers is yet to be fully welcomed. This is the notion of empowering and trusting the individual movers in healthcare and the institutions to which they belong, an option not yet tried in a climate where no solution should be overlooked. Given that the practice of medicine is regulated by stakeholders both federally and financially external to the delivery of care between patient and provider, the changes imposed on the system are reactionary rather than internally driven. In order to truly change in a united manner, the context must be appropriately framed and appreciated from within the healthcare. The idea of contextualizing the problem is yet another page from Netflix’s playbook that highlights changes should be internally driven and not in response to oversight.

Focusing on academic medicine as the first domino in disseminating the message throughout the system yields the greatest chance of actualizing a bona fide culture change in healthcare. While there do exist standout examples of the highlighted aspects of Netflix’s culture scattered across teaching hospitals, there simply are not enough. Acting in the best interest of the institution, enabling creativity by curtailing bureaucracy, and recovering rapidly does happen, but not at the pace the market demands. Physicians and other healthcare providers blanketly cite “bureaucracy” at all levels – from internal hospital administration to federal imposition – as a source of personal pain. With acknowledgment that certain aspects, such as federal oversight or HIPAA compliance regulations, cannot be sidestepped in academic medicine, the opportunity to learn from a robust organizational culture such as Netflix is essential in disrupting the healthcare landscape with a sustainable solution. Successful adoption of good practices from standouts in other industries, no matter how unlikely the source, resulting in a cataclysmic culture shift may prove to be the long-awaited gesture of true healthcare progress.