Across the nation, ambulatory care initiatives are among the top three focal points of C-suite leaders at independent hospitals and healthcare systems, whether their organizations are sole community providers or entities in highly competitive markets.
However, many organizations are not achieving the full potential of a well-designed and executed ambulatory care strategy, resulting in lost patients and revenue.
The array of potential delivery models is expanding, creating an opportunity for ambulatory care to make a significant contribution in addressing consumerism and supporting service line growth and revenue diversification. A strong ambulatory strategy also can enhance performance around bundled payment, clinically integrated network (CIN), and accountable care organization (ACO) initiatives.
Success in ambulatory care requires that healthcare leaders develop an effective, diversified portfolio, choose an array of strategic partners with which to deliver services, and pursue selective adoption of innovation and disruption in building out their approach. This work isn’t easy, but when done thoughtfully and carefully, the results will better position organizations to thrive in an era of value.
There are 10 questions that can help healthcare leaders better determine how to optimize their ambulatory care strategy.
1. What ambulatory components are best suited to optimizing our market position and financial performance? Consider how the ambulatory options available in your network address the growing trend in consumerism. Do they address the factors that influence how patients choose where to obtain health services and the focus of their selection process, like ease of scheduling, accessible location, convenience (“one-stop shop”), out-of-pocket cost, and consumer ratings?
Consider how digital healthcare and remote monitoring have changed patients’ expectations of how and where they prefer to interact with clinicians. These factors imply that providing a diversified portfolio of ambulatory modes of care is generally an appropriate strategy. However, there is no “best in class” model that defines the right combination of components (see the sidebar). Instead, the optimal array of components is market specific and requires a careful assessment of the value sought by customers (residents, employers and payers) in the target market, the competitive environment, the pace of adoption of innovation, and the stage of evolution of value-based care and reimbursement.
2. Which organizations are our optimal partners in terms of clinical capability, operational expertise, strategic advantage, brand value, and access to capital? Think about whether your organization has the capabilities in each of these areas to successfully implement and operate the portfolio of services you selected in response to question No. 1. If not, it may be worthwhile to seek out partners that are best able to support your objectives. For instance, if you are embarking on a retail strategy, you may wish to partner with a strong retail operator that has utilized its customer information data- mining skills to select optimal locations in the community and boost foot traffic. Other examples of partners include physician specialty organizations (such as those with a recognized brand), companies with experience in managing ambulator surgery centers, and telehealth providers. It’s important to think creatively and strategically about selecting partners that will best meet your organization’s goals, rather than simply looking to your physician base for partnership possibilities. Generally, using a diversified portfolio of strategic partners is an appropriate strategy. Beginning with clear objectives and a set of evaluative criteria are an absolute “must
3. What is the best manner of aligning physicians and other ambulatory care network members in decision making, strategy, and operations? To ensure a high-performing ambulatory care strategy, alignment with physician organizations and independent physicians is crucial. There are at least two levels of consideration here: the legal and organizational forms of alignment (e.g., employment, CIN, ACO) and the practical steps used to collaborate. One critical success factor: bringing together the leaders of physician entities, ambulatory care centers, and the hospital(s) to share in decision-making regarding the ambulatory care strategy and its implementation. Doing so enables leaders to jointly address issues such as:
• Where should the provider network establish a new ambulatory care site so that it capitalizes on market opportunity without cannibalizing business from other members of the network?
• Which physician entity should recruit and have fiscal responsibility for practice support for new specialists?
• How can the hospital(s) reduce the cost structure of the ambulatory imaging services to make it viable for the physicians to utilize that site rather than one operated by a competitor?
Recognizing the value of shared decision-making and strategy is relatively easy once all parties embrace the “burning platform” for doing so. It is more difficult to facilitate open and honest dialogue and building shared accountability for mutual success.
4. What is the optimal “geographic footprint” for our ambulatory network? Addressing consumers’ expectation for convenient access and capitalizing on market “gaps” to achieve competitive advantage are key elements in deciding where to locate services. Thorough research on and insight into both are important initial steps in determining the best footprint. Additionally, it is crucial to understand the timing and implications of evolving trends specific to residential and commercial development, commuting and patient care travel patterns, and payer mix. Performing detective work to anticipate the strategies of traditional competitors as well as new market entrants (e.g., retail operators, physician kiosk companies) will provide “signals” that enable your organization to capitalize on an opportunity before others do and create barriers to competitor entry by providing superior value.
5. What is our compelling value proposition for each customer? When contemplating this issue, healthcare leaders often apply a default approach and define value from their own perspective: “We provide outstanding quality and service.” Given the evolution of the industry, it is increasingly important to define the value of the ambulatory care network components from the perspective of each customer served—patients, employers and payers. In general, patients value convenience (including convenience in location, online access to care or scheduling, and coordinated care delivery), transparency around out-of-pocket costs, rapid access to test results and their medical record, and dialogue with the clinician. Employers value services that help maintain employee productivity, ensure employee satisfaction, and minimize the cost of care. Payers value efficient (low-cost) and effective (strong outcomes) care and limited turnover of enrollees stemming from dissatisfaction. Fine-tuning these generalities to reflect the nuances specific to your market and then applying them to the design of your ambulatory network and your value proposition requires investigative research and careful thought.
6. What is the optimal approach to creating and sustaining competitive differentiation? Understanding the value sought by customers, your value proposition, and your competitors’ vulnerabilities are important inputs in determining an effective approach to differentiating your ambulatory services. An honest assessment of how your own capabilities and performance compare with those of competitors is crucial. Research will reveal the most effective focal point(s), which may include convenience, outcomes, cost, availability of particular services and/or resources, use of digital health tools, and/or other factors. With the evolution of technology, clinical information connectivity (e.g., the ability to upload data from patient wearable monitoring through Apple’s Healthkit), the use of artificial intelligence supported health advisor devices and apps (e.g., Babylon), or a linked EMR or a health information exchange may be the basis for competitive differentiation. When devising an approach to differentiation, it is important to assess its sustainability, monitor its effectiveness, and refresh your approach when necessary.
7. How/where can we redesign our ambulatory care components to achieve efficiency and be a low-cost provider? Since achieving efficiency and reducing costs is an enabler of competitive distinction, it is important that organizations consider how to address this objective relative to each of the functions within an ambulatory care service setting—both administrative (e.g., scheduling, check-in, check-out, billing) and clinical (e.g., diagnostic, therapeutic). One example is the efficiencies providers can gain when they put scheduling and check-in in the hands of patients, whether through app-based and on-line solutions or ambulatory care site-based kiosks. This approach eliminates manual inputting of patient data by front-desk staff, increasing efficiency. Some wearable medical monitoring devices also eliminate the need for clinical staff to record patients’ weight, height, and medical history by transmitting this information directly to patients’ electronic medical record prior to arriving for an office visit. These examples illustrate the importance of considering the role of new technology in supporting efforts to be a low-cost provider.
8. What forms of innovation and disruption provide an advantage and are a good fit? Can we pursue them alone, or would we benefit from/require a partner? Some forms of innovation provide new tools and processes that enhance access to ambulatory care, thereby strengthening an organization’s strategy (see the sidebar). Other forms of innovation introduce new entrants to the ambulatory care playing field and increase competition. The escalating pace at which new forms of innovation are being introduced makes it difficult to discern lasting trends from fads. At the same time, it is challenging to know the extent to which payers and regulatory agencies support new products and services. Given all of this “noise,” it may seem safe to take a wait-and-see approach, yet doing so increases the likelihood that competitors gain a substantial advantage. It is imperative that organizations have both the capabilities and the process in place to evaluate and select from an array of healthcare innovations and/or be at the forefront in developing them.
9. What performance goals/metrics and incentives are needed to drive the results? People generally act to maximize their reward for achieving outcomes by which their performance is measured. This maxim is particularly relevant when introducing a new strategy, service, or model of care or when seeking to change behavior. It is important to set goals that are directly related to the strategy and the operational and financial success of the ambulatory care network (e.g., number of visits, share of the ambulatory care dollar). Build incentives around the types of behavior change needed from the hospital leadership team and medical staff to support the ambulatory strategy. To ensure action, it is critical that both the upside and downside incentives are of sufficient magnitude and that they are realized in a timely manner.
10. What “triggers” would shift us to a contingency plan? On occasion, sudden changes occur in the environment that alter the conditions around which an organization planned an ambulatory care initiative. If the organization is unprepared, this dynamic can lead to a broad array of negative strategic and financial consequences. Alternatively, if the organization is adept at recognizing change at an early stage and making the proactive shift to a prepared contingency plan, there is a greater likelihood of being able to adjust the initiative with successful outcomes. Thus, it is crucial that organizations have specified the types of change that would trigger shifting to the contingency plan and have an established process in place for doing so. Common triggers include significant modification to reimbursement, new initiatives by an existing competitor, entrance of a new type of competitor to the market, and clinical or technological innovation.
Positioning for Success
A robust and effective ambulatory care network and strategy is fundamental to optimizing clinical service line performance, achieving savings in a bundled payment program, and ensuring a high-functioning CIN and ACO. Well thought-out answers to these 10 questions provide a strong framework for developing the right strategy for your organization.
bio:
Mark J. Dubow, MSPH, MBA, is a director for Veralon (mdubow@veralon.com).
sidebar:
Components of Ambulatory Care
There are several points of access healthcare leaders should consider in determining where and how to provide ambulatory care services. These include:
• Comprehensive centers (“big box”)
• Small-scale centers
• Urgent care centers
• Ambulatory surgery centers
• Imaging centers
• Special services centers (e.g., oncology, sports medicine)
• Employer-site clinics
• School-based clinics
• Retail clinics (e.g., Walgreens, Walmart)
• Digital health