Skate to Where the Puck is Heading
The JP Morgan Healthcare Conference took place this month in San Francisco. While most of the updates you’ll find from this conference focus on public, private-equity backed and venture-backed companies, the nonprofit track of the conference focuses on hospitals — and there were some pretty interesting and consistent takeaways. What you find below is composed mostly of an article written January 14, 2016. To read the entire article go their blog. Vince Panozzo currently serves as Senior Vice President and Chief Revenue Officer at Strata Decision.
I provide my commentary to each trend that is relevant to your therapy practice guide. Most health systems know what they want to and need to do. From this point forward, it’s all about execution. I encourage you to stay agile and let go of traditional practices as these trends work their way into main street therapy clinics.
Here were the top trends:
1. Changing payment structures
Every organization is starting to get paid in different ways. They are taking on payment risk for delivering better care at a lower cost. Most healthcare systems are betting that value-based care will be the system of payment of the future. Leverage the skills and experience of your team to design, test and deliver only services that your customer value. You know that they value it when they are willing to pay for it.
2. Understand treatment cost and margins
What is new is the increased focused on understanding cost as a requirement to driving margins in bundled care contracts. Clearly cost accounting is quickly becoming a core system with a focus on understanding both inpatient and outpatient cost, something traditional cost accounting systems can’t do. Know your cost per treatment. Avoid wasting time and money with programs and services that don’t work. How do you know they don’t work? Patients don’t get better in a cost effective manner and you don’t make a profit.
3. Outpatient shift
There continues to be a major shift to the outpatient setting, both in volume and revenue. Health systems are organizing themselves around this by increasing their presence in the ambulatory setting. West Des Moines, Iowa-based UnityPoint is an example of this. The system now has 100 + clinics throughout Iowa, Wisconsin and Illinois. As large health systems shift towards outpatient therapy position yourself as a cost effective solution to their problem. They might look for partners withing the private practice community to provide the services for them. If you run a tight ship that makes money you are in a better position to earn a contract.
4. Personalized medicine
Personalized medicine is becoming increasingly important so that specific treatment protocols can be developed for specific patients. As an example, Geisinger is using predictive analytics to look at family history to determine potential health issues before they happen. The distinction between high volume practices and personalized therapy will become more apparent. Smaller niche practices are in ideal position to learn from the consumer what they really want. Value is the key reason why consumers select one provider over another.
5. Scale
There is a push to continue to get larger through mergers and acquisitions to survive and thrive in the current healthcare marketplace. This allows systems to reach more patients, manage populations more effectively and to negotiate better rates from suppliers/insurers. As healthcare systems merge and scale there will be a growing demand for niche practices with lower overhead that can afford to provide more personalized care.
6. Partnerships
Per the point above on scale, health systems are increasingly looking to partner with other health systems that are geographically connected to compete and serve patients better. As an example, Aurora Health Care has started a partnership with seven other health systems in Wisconsin called ‘About Health.’ They compete with these organizations in some markets, but also partner with them to create scale. Think local. Small business owners band together with shared interests to sponsor “buy local” events. Develop partnerships with other healthcare providers like massage therapists, nutritionists, acupuncturists and pilates instructors to provide comprehensive alternatives to large health systems.
7. Consumerism
For the first time ever, healthcare is becoming a consumer product. People want better access to care and they want to know how much they are paying for their care. They want ease of access and don’t want to wait for a doctor who is only open from 9 a.m. – 5 p.m. As an example, Advocate in the Chicago market just bought 50+ of Walgreens’ clinics inside stores. Face this new reality and embrace consumerism. Wellness and fitness programs that weren’t consider therapy in the past are entry point to get in front of consumers. The complementary offerings are opportunites to move into self pay services while providing access for new clients to know and trust you.
8. Brand
Strong brands and reputations are taking center stage. Many organizations are focused on their brand’s reputation in their markets as healthcare becomes a consumer-driven marketplace. It was pretty interesting to hear the level of emphasis on this — clearly this ties to the consumerism push. Avoid trying to be all things to all people. Build your professional platform by emphasizing a particular niche in the market. Leave the comprehensive one stop shopping and it’s Walmart like experience to the large healthcare system. Develop your brand around providing a solution to a particular problem of your ideal clients.
Clearly there is a lot of change in the air and more to come. The JP Morgan Healthcare Conference highlights some of the key trends that showed up consistently throughout the presentations. Your awareness of these top trends and changing your practice systems accordingly will help your practice stay current and competitive.
Share with us how you’ve adapted your practice
in light of one or two of the above mentioned trends?
