Your strategic vision for how your organization should fit into the care continuum should be realistic, but aggressive. Here's a North Star: Think of where you can add the most value and then focus.
Of all the megatrends affecting healthcare, from ICD-10 to consolidation, from Medicare demonstration projects to partnerships with payers and employers, one thing hospital and health system leaders can count on is the inexorable march forward, broadly, of value-based purchasing.
By that I mean that those who are paying for healthcare represent a lot of different constituencies—from employers to traditional payers, to the government, to individuals—but what unites them is that they want verifiable value for the money they're spending.
And they're getting better at determining the factors that influence value. Can your organization provide better outcomes than the competition? How can you prove it? What's the secret? The answers to those questions should inform every strategic decision leaders make.
For last month's cover story in HealthLeaders magazine, I wrote nearly 7,000 words on defining your place in the care continuum and I feel like I barely scratched the surface. I found several diverse examples of how some innovators are employing their time, talent, and vision toward demonstrating value.
But even given the unique nature of each of their stories, I kept coming back to one thing—the confidence of the people I interviewed and the clarity of purpose they demonstrate for finding how their organizations will fit in going forward, whether we're talking about a regional health system, a small hospital, or a giant nationally focused health system.
They all have the confidence of their convictions, and critically, a detailed plan to get there. Some important themes are common, regardless of their vast differences in size, scope and scale:
1. Inpatient is not a growth area.
Sure, inpatient is the most expensive site of care, and thus holds a big share of revenue, but organizations are trying to think more holistically—adding outpatient, ambulatory and even "e" modalities (telemedicine is growing) in the hopes of building a cohesive and coordinated system of care with the idea that commercial contracting will take on a more capitated style of reimbursement.
Further, many heretofore provider-only organizations are entering territory that was one reserved only for health plans. "Capitation is our friend," says Curt Kretzinger, Mosaic Life Care's chief operating officer.
The beauty of growing beyond the inpatient space is that it can be a good strategy even if value-based purchasing has not made inroads locally, by providing investment opportunities in growth areas such as primary care and outpatient surgery. But the continuity-of-care aspect of operating in a capitated environment should not be discounted.
2. For big systems, loose confederations are out—true operating company structures are in.
Ascension owns one of the largest health systems in the country, but it has largely operated as a loose confederation of regional systems that have been free to find their own way in many respects—especially in clinical standardization.
As taking variation out of medical care becomes a more important contributor to value, the organization is taking a big risk by building out and rolling up modalities like post-acute care and home health. That takes huge investment, but dovetails into Ascension's larger strategy of "taking care of millions of lives from birth to death," according to Anthony Tersigni, the system's president and CEO.
He believes that standardization of clinical practice and other operational priorities are more difficult under a holding company model.
3. Hospitals and health systems must become more paternalistic toward patients.
Navigating healthcare can be complex for even the most educated individuals. Ellis Medicine President and CEO James Connolly says the most recognizable healthcare authority in a given region needs to take responsibilities that it hasn't in the past. For instance, in helping patients make thoughtful and efficient decisions with their healthcare.
In some ways, this means getting into areas of social services and social work that hospitals have traditionally not been involved in. Building these linkages, in Ellis's case, with more than 50 local agencies and partners, helps patients avoid readmission or expensive follow-up care that happens when their social needs are neglected.
It's a tough learning curve, but Connolly says it's necessary given value-based reimbursement that is coming on ever more strongly in both the commercial and government payer sectors. "What we built is equally applicable to Medicare, Medicaid or commercially insured people," he says. "The main thing we were developing was the ability to coordinate and manage care in the community. That's a cornerstone toward being an ACO."
Not that every hospital or health system should become an ACO, or even should become part of a larger one. That's a decision that can only be made based on the facts as you see them and on the details of the possible deal.
Accountability, by contrast, will not be optional.
Philip Betbeze is the senior leadership editor at HealthLeaders.