Engineers: Heal Thyselves (and Health Care)

Oct 30, 2024

By KIM BELLARD

The article I can’t get out of my head is one by Greg Ip in The Wall Street Journal: Crises at Boeing and Intel Area National Emergency.

I’m old enough that I remember when the Boeing 707 took airline passenger travel from the prop age to the jet age. I’m old enough that I remember that we all wanted PCs with Intel chips when companies starting giving office workers their first PCs. I’ve read enough history to know the storied engineering background and achievements of both. I mean, those B-52s that have been the backbone of the U.S. Air Force bomber command for the past 70+ years: those are Boeing planes.

To younger people, though, Being is the company whose doors pop out mid-flight, or which abandons astronauts in space. When they think of Intel – oh, I’m just kidding; when younger people think about chip companies, it’s NVIDIA or TSMC. Intel’s stock is doing so badly it may get kicked out of the Dow Jones Industrial Average.

So, as Mr. Ip says: “A generation ago, any list of America’s most admired manufacturers would have had Intel and Boeing near the top. Today, both are on the ropes.”

He goes on to add:

The U.S. still designs the world’s most innovative products, but is losing the knack for making them.

At the end of 1999, four of the 10 most valuable U.S. companies were manufacturers. Today, none are. The lone rising star: Tesla, which ranked 11th.

Intel and Boeing were once the gold standard in manufacturing groundbreaking products to demanding specifications with consistently high quality. Not any longer. 

What is most frustrating, Mr. Ip points out, is: “Neither fell prey to cheap foreign competition, but to their own mistakes. Their culture evolved to prioritize financial performance over engineering excellence.”

As an example, in a Blockbuster-could-have-bought-Netflix parallel, The New York Times reports that Intel could have bought NVIDIA in 2005, but the reported $20b price was considered too expensive. NVIDIA is now worth $3.5 trillion. Whoops.

Boeing’s new CEO, Kelly Ortberg, admits: “The trust in our company has eroded,” and that Boeing needs “a fundamental change in culture.” It doesn’t help that its machinists have been on strike almost 2 months, with the union rejecting Boeing’s latest offer last week. Boeing is slashing some 17,000 jobs, considering selling off its Starliner business, and trying to raise as much as $25b. 

Intel has also cut jobs, is trying to beef up its manufacturing through a revitalized foundry business (which some believe Intel should spin off), and has seen its stock crater (down 52% YTD), but CEO Pat Gelsinger vows: “We see the finish line in sight.”

Intel is still waiting for some $8.5b in CHIPS Act funding, “There’s been renegotiations on both sides,” Mr. Gelsinger told The New York Times. “My simple message is, ‘Let’s get it finished.’” But, as former Commerce Department official Caitlin Legacki noted: [There is fear that] Intel is going to take chips money, build an empty shell of a factory and then never actually open it, because they don’t have customers.”  Its much-hyped plants in Arizona and Ohio have both faced setbacks. 

Meanwhile, the vultures are circling: there are rumors that Samsung and Apple may want to acquire Intel.

The trouble is, which is Mr. Ip’s point, neither has any real domestic competition; if either would fail, it would throw even more of our economy to the mercy of foreign manufacturers (or, in its space business, make the U.S. even more dependent on Elon Musk’s SpaceX). That’s the national emergence he is warning about.

My point with all this is not so much to add another lament about the decline of U.S. manufacturing as to emphasize the decline of the role of engineers. Earlier this year Jerry Useem, writing in The Atlantic,  argued: “When the wave of Japanese competition finally crashed on corporate America, those best equipped to understand it—the engineers—were no longer in charge. American boardrooms had been handed over to the finance people.”   

 Mr. Useem points out that a revitalized GE “is belatedly yielding to the reality that workers on the gemba [Japanese term for the shop floor, where value is actually created] are far better at figuring out more efficient ways of making things than remote bureaucrats with spreadsheet abstractions.” That sounds a lot like what Mr. Ortberg is saying: “We need to be on the factory floors, in the back shops and in our engineering labs.”

So what, you might ask, does this have to do with healthcare? 

It turns out that there is something called a healthcare engineer.

In fact, there is an American Society of Healthcare Engineers, which says is “dedicated to optimizing the health care built environment. ASHE’s 12,000+ members design, build, and operate hospitals, and are involved in improving the health care physical environment from the time hospital blueprints are drawn throughout the lifespan of a facility.”

I rather prefer a definition from much-cited 2015 paper: Healthcare Engineering Defined: A White Paper, which asserted that, despite being in use for decades, “the definition of “Healthcare Engineering” remains ambiguous.” It sought to resolve that.

The authors – and there were 41 of them – didn’t agree with ASHE that it was (just) about building hospitals and other healthcare facilities. The authors believe: “Healthcare Engineering is engineering involved in all aspects of healthcare.”

More specifically:

Healthcare Engineering is engineering involved in all aspects of the prevention, diagnosis, treatment, and management of illness, as well as the preservation and improvement of physical and mental health and well-being, through the services offered to humans by the medical and allied health professions.

The definition covers both engineering interventions (for patients), and engineering for healthcare systems – “the complete network of organizations, agencies, facilities, information systems, management systems, financing mechanisms, logistics, and all trained personnel engaged in delivering healthcare within a geographical area.”  

That’s quite a bigger role than I expect most of us think of engineers in healthcare…to the extent we think about them at all.

Many think our healthcare system has become so dysfunctional because businesspeople run it, not clinicians. Others blame the clinicians, such as for focusing more on income than on, say, quality and equity. We can all agree: however we got here and whomever is to blame, our healthcare system is a mess.

I think healthcare should take a lesson from Boeing and Intel: let the engineers take charge. E.g., not just build the building but design the processes of interventions as well as the buildings that house them.   

After all, they could hardly do worse.  

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor