Operations Management

Healthcare Delivery Disruption: Four Practical, Strategic Approaches

April 2, 2018 1:13 pm

Craig Allan Ahrens and David Fairchild will be presenting at HFMA’s 2018 Annual Conference, taking place June 24-27 in Las Vegas. This blog post touches on the theme of their presentation, Improving Medical Group Performance Through Radical Convenience Notions.

Health care is in a state of constant disruption today, with mounting competition coming from many outside sectors. The situation is creating growing opportunities for health systems to position themselves as leaders in offering disruptive healthcare delivery strategies that enhance convenience, increase patient access, and create more efficient care models.

As an industry, we are starting to witness significant investments by non-traditional players (e.g., private equity, venture capital, Amazon), the realization of technology’s promise (e.g., telemedicine), and the emergence of nontraditional alliances (e.g., CVS/Aetna, Davita Medical Group/Optum), all of which will disrupt markets where traditional health systems are not prepared for such developments. Many strategic disruptions are centered around healthcare delivery disruption strategies, seeking to seize upon the idea of patients receiving radically more convenient avenues for improved access and efficient care. 

Within health care, however, there is a widely held perception that outside industry players are underestimating the healthcare market complexities and overestimating their ability to disrupt healthcare delivery. Meanwhile, with the benefit of a having a deeper understanding of the healthcare market’s complexities, traditional health system players have a timely opportunity to differentiate themselves proactively against nontraditional players and/or shift share from traditional competitors by employing nontraditional delivery disruption approaches themselves.

With that in mind, health systems aspiring to be innovative leaders should consider four strategies that can help them effectively prepare for and respond to healthcare delivery disruption.

Strategy 1: Radical Convenience

Technology is providing new platforms for patients to obtain convenient care in an efficient manner. Amazon, for example, has gotten attention because of its recent strategic investments in hiring healthcare industry consulting leaders with the aim of disrupting traditional, office-based care. Some think that by leveraging their Alexa voice technology they may be able to disrupt a chunk of the electronic health record (EHR) marketplace held by providers such as Epic’s My Chart  by providing a more efficient messaging portal for patients to schedule appointments and interact with their physician’s offices. 

Health systems can mirror this strategy by strategically enhancing their telemedicine and virtual office strategies offering radically convenient access to care. Many already are embracing this strategy. A February 2018 survey of 100 healthcare executives by Baltimore-based Sage Growth Partners reported that over 50 percent of the respondents “have adopted telemedicine and most non-adopters see it as a priority.” Mobile apps and outpatient care are viewed as most promising area for growth. Respondents also said that telemedicine has transformed the standards of care for stroke, and specialties where there are frequently shortages of clinicians such as behavioral health, neurology, primary care, and cardiology “are poised for transformation.” 

Strategy 2: Patient Segmentation

Another example to learn from are companies that mine consumer datasets to segment their markets and learn their preferences to offer services that anticipate needs. These companies’ approach includes use of collaborative filtering and natural language processing like Amazon and Netflix to understand their consumer’s needs and preferences, sometimes before the consumer even figures them out themselves. Determining how patients with the same disease will respond to treatment may be difficult, but predicting how they will make decisions about where and when to get care may be easier. There are just a handful of types of patients in the United States, according to experts in consumer profiling. Among them are the ones who follow their physicians’ advice without question, those who give more credence to information they find on their own, and a striking number who want little if anything to do with the healthcare system.

Many healthcare organizations have the opportunity to tap into the power of consumer data by beginning to use the consumer profiling tools that shape advertising in order to get to know their patients beyond the examining room. Tri Health, a Cincinnati health system, is one pioneer in the field,  utilizing consumer information to shape their approach in understanding risk groups and managing their population’s health. By segmenting their patient types through the use of data, they can more effectively and efficiently managing their care processes and exceeding patient expectations. 

Strategy 3: Access Management

A significant area of disruption within the healthcare industry today is around patient access, with a focus on developing ways to make access easier in response the needs and demands of patients as consumers. Areas of focus have included greater flexibility in scheduling services and more easily accessible sites for care. As a result, many health systems are starting to develop access governance boards where thoughtful questions around standardized scheduling templates, the hours of service, and phone systems are being addressed to proactively anticipate and meet the needs of their patients—and more effectively manage their systems capacity.  The disruption ranges from technology solutions to brick-and mortar-urgent care sites offering ease of access to non-traditional care venues. For example, urgent care is a rapidly growing component of primary healthcare, with 6 – 10 percent growth per year.

Strategy 4: Improved Efficiency of Care

Analyzing how care is provided, the outcomes, costs, and the most efficient manner has been an elusive component in health care. The myriad data systems and lack of resources have proven to be a challenge. Applications of artificial intelligence have offered  an avenue to combine these data sets to quickly identify ways to improve care in a more efficient manner. IBM’s Watson, for example, has been employed many healthcare systems as a tool to manage patient care more effectively through taking data from myriad  databases that otherwise would have been lost and turning those data into information to be acted upon. 

A key consideration is that healthcare delivery disruption doesn’t always require more advanced, outside industry techniques. Rather, it could include things as simple as providing transportation for patients and/or standardizing physician schedules to allow for online patient scheduling. 

By focusing on these four strategic areas, and proactively framing opportunities, health systems can better position themselves to be healthcare delivery disrupters in their markets, fully ready to effectively meet challenges from aggressive, new market entrants. 

Craig Allan Ahrens, MHA MBA, is a senior advisor at BDC Advisors, St Louis. 

David Fairchild, MD, MPH, is a director at BDC Advisors, Boston.  


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