A chess grandmaster once said that the most powerful advantage in the game is simply to be ready with the next move. The same is true in healthcare, especially when you think about competition in local markets.
Unfortunately, today, healthcare leaders are often hesitant to make the next big move on the competitive board. We crave certainty of forecasting despite changes in volatile markets, both locally and nationally, that often outpace the relentless reliance on strategic and financial analytics. Leaders often struggle to execute their current plan, let alone anticipate multiple moves. Many have hit pause on emerging business and clinical care transformation strategies to minimize the downside risk, an understandable decision given stressed balance sheets and declining operating margins.
Many senior executives in healthcare are trying to maneuver through headwinds such as labor scarcity, stagnant reimbursement and rising costs that erode our ability to serve growing consumer demand in a financially sustainable way. Many markets are also seeing the disruptive nationalization of payer and provider sectors as large for-profit insurers and private equity physician aggregators threaten the market position of local nonprofit incumbents. With scale and enhanced access to capital and technology, they are flipping the gameboard in ways that fail to strengthen the local healthcare ecosystem.
Despite those challenges, or perhaps because of them, large health systems must remain committed to wielding the most powerful force in the market — the courage to make the next big strategic move with our physician partners at the forefront of change. Now is not a time to be timid, but instead purposefully engage and give physicians the authority and accountability for business model transformation and strategic performance improvement.
It's the local and personal connections of physicians to their patients that can improve healthcare outcomes and accelerate transformative business strategies. The business model imperative for health systems and their physicians in a highly competitive and crowded market hinges on three must-do strategies:
1. Elevate physician engagement, leadership
Many physicians report feeling devalued, disenfranchised and unseen. As leaders, we are obligated to create a different experience for clinicians by giving them leadership authority and establishing peer accountability for reliable and sustainable consumer experiences and affordability, while continuing to provide excellent care in our local markets. I learned long ago that involving physicians in decision making on the source, use and flow of funds can accelerate the alignment of performance metrics, compensation plans and resource allocations to the organization’s strategy. Well executed, this is essential to returning the joy to practice and ultimately the industry transformation we strive for.
2. Optimize clinical integration
To more effectively compete in their local markets, health systems must be intentional about creating economies of scale and removing unwarranted variation in clinical care. To accelerate scale with high-value care, we must enfranchise and equip our physicians and local care teams to optimize performance in a network that is clinically integrated across episodes of care, including home-based services. At Tufts Medicine, we are about six months into an exclusive five-year strategic operating agreement with a population health partner to accelerate that optimization in our local markets in ways that benefit both our value-based care and fee-for-service volume-based lines of business. That work is vital to our future success.
3. Create strategic payer partnerships
To create new market value, health systems must work closely with their payer partners to transform payment models in ways that reward performance and align system business goals to serve the unique needs of local markets. Local health plans and clinical enterprises must re-engineer how we work together to deliver the experiences and affordability that patients want, and create sustainable margins that the industry needs to survive and thrive.
While each of these three levers is crucial to delivering exceptional care to meet a specific community’s healthcare needs, none of this is possible without engaging and empowering physicians as equal, accountable partners to organize and operate integrated systems of care. Physicians are a direct connection to understanding the needs of their patients across individual communities. For the industry, headlines about physicians feeling marginalized is a massive red flag as we struggle to deliver high quality outcomes, affordability, and the financial performance needed to succeed. Resolving that disenfranchisement requires uncomfortable conversations among leadership. It demands courage from hospital and health system leaders to both do things differently operationally and do different things strategically in highly volatile markets with physicians as equal enterprise partners.
We all must commit to physician-inspired,-designed and -led strategies and tactics to bring our vision of meaningfully coordinated experiences and affordable care to life in both value-based and fee-for-service lines of business. Moving pawns in a series of small tactical moves while we leave rooks, bishops and queens on the backline is not a winning strategy. Instead, industry leaders must be confidently bold and committed to pushing through transformational change, with fully engaged and empowered physician partners co-leading game-changing strategies.