Luke Peterson, a National Director of Kurt Salmon's Healthcare Strategy Group, discusses how hospitals are approaching new strategic plans and using effectiveness data to gain a competitive advantage.
1. Move from growth plan strategies to effectiveness strategies. When devising strategic plans, hospitals should now focus more on effectiveness strategies than growth strategies, says Mr. Peterson. "What we are seeing in the market is that effectiveness is critically important, along with growth," he says. "We anticipate some push-back to this change of focus, but we believe this is where the market is heading."
While growth plans are predominantly about external markets and volumes, effectiveness plans require the organization to look at its internal processes and value equations says Mr. Peterson. "It is no-longer simply about growing the top line," he says. "Finding ways to fundamentally change the care processes to improve quality, service and reduce costs require different approaches and information."
2. Focus on quality of care for marketing strategies. As the amount of transparency in hospital information grows, it has become more tenuous to assume large volume means high quality. In the past, large hospitals were assumed to have better quality than small community hospitals, and now that isn't always the case, says Mr. Peterson. "The hospital can be a small hospital that is really connected to the community, has strong customer service and is easy for surgeons to arrange operating room time," he says. "Or, the hospital has the huge infrastructure with research and high-level specialists. People are starting to look more closely at the outcome data and want hospitals, large and small, to prove that they have a better model."
Some community hospitals are taking advantage of HCAHPS scores and other quality outcomes to prove they provide superior care. "The big competitive aspect for the future will be how organizations use this information as an asset," he says. "Those who are able to mine quality data and use it with good market information will be the ones who win the market."
3. Improve efficiencies through streamlined care. Hospitals should be able to produce data about how patients are moved through the treatment process and ensure these processes run as smoothly as possible. "Information on the effectiveness of an organization's care model as a new competitive asset is something that is becoming more front and center for hospital CEOs, not just CIOs," says Mr. Peterson. "Organizations have spent millions of dollars on clinical information systems. While these systems improve the patient care process they also collect data that can be strategic asset. How you use the information to prove your care effectiveness is very important."
The hospital can present information on improved outcomes, efficiency and cost-savings to payors during negotiations for unit better rates.
4. Take control over the elements of competition that you can influence. There are certain competitive strategies that the hospital can't influence — including geography, demographics and payor competition — but they can influence the relationship between the hospital, payors and area physicians. Many times, this includes a physician-hospital alignment strategy. The hospital can also explore alignment with other tertiary providers in the community to provide a seamless continuum of care. All of this requires access to information across the continuum.
Additionally, hospital executives can influence how they develop the different departments. Many departments are modernized when the hospital partners with surgeons to perform new procedures, purchases new technology and updates data collection capabilities. "Timely access to the right information is key, but don't forget to have the right human resources assets in place and the right people in leadership positions to focus on advancing care and improving the department's culture," says Mr. Peterson.
More Coverage From Kurt Salmon:
5 Tips for Aligning Physicians Through Contracts
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Bringing Certainty to Uncertain Times: 6 Imperatives for Future Hospital & Health System Success
1. Move from growth plan strategies to effectiveness strategies. When devising strategic plans, hospitals should now focus more on effectiveness strategies than growth strategies, says Mr. Peterson. "What we are seeing in the market is that effectiveness is critically important, along with growth," he says. "We anticipate some push-back to this change of focus, but we believe this is where the market is heading."
While growth plans are predominantly about external markets and volumes, effectiveness plans require the organization to look at its internal processes and value equations says Mr. Peterson. "It is no-longer simply about growing the top line," he says. "Finding ways to fundamentally change the care processes to improve quality, service and reduce costs require different approaches and information."
2. Focus on quality of care for marketing strategies. As the amount of transparency in hospital information grows, it has become more tenuous to assume large volume means high quality. In the past, large hospitals were assumed to have better quality than small community hospitals, and now that isn't always the case, says Mr. Peterson. "The hospital can be a small hospital that is really connected to the community, has strong customer service and is easy for surgeons to arrange operating room time," he says. "Or, the hospital has the huge infrastructure with research and high-level specialists. People are starting to look more closely at the outcome data and want hospitals, large and small, to prove that they have a better model."
Some community hospitals are taking advantage of HCAHPS scores and other quality outcomes to prove they provide superior care. "The big competitive aspect for the future will be how organizations use this information as an asset," he says. "Those who are able to mine quality data and use it with good market information will be the ones who win the market."
3. Improve efficiencies through streamlined care. Hospitals should be able to produce data about how patients are moved through the treatment process and ensure these processes run as smoothly as possible. "Information on the effectiveness of an organization's care model as a new competitive asset is something that is becoming more front and center for hospital CEOs, not just CIOs," says Mr. Peterson. "Organizations have spent millions of dollars on clinical information systems. While these systems improve the patient care process they also collect data that can be strategic asset. How you use the information to prove your care effectiveness is very important."
The hospital can present information on improved outcomes, efficiency and cost-savings to payors during negotiations for unit better rates.
4. Take control over the elements of competition that you can influence. There are certain competitive strategies that the hospital can't influence — including geography, demographics and payor competition — but they can influence the relationship between the hospital, payors and area physicians. Many times, this includes a physician-hospital alignment strategy. The hospital can also explore alignment with other tertiary providers in the community to provide a seamless continuum of care. All of this requires access to information across the continuum.
Additionally, hospital executives can influence how they develop the different departments. Many departments are modernized when the hospital partners with surgeons to perform new procedures, purchases new technology and updates data collection capabilities. "Timely access to the right information is key, but don't forget to have the right human resources assets in place and the right people in leadership positions to focus on advancing care and improving the department's culture," says Mr. Peterson.
More Coverage From Kurt Salmon:
5 Tips for Aligning Physicians Through Contracts
5 Best Practices for Achieving Successful Hospital-Physician Relationships
Bringing Certainty to Uncertain Times: 6 Imperatives for Future Hospital & Health System Success