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Choose Your Path to a Sustainable Future

We all know that health care is shifting from the acute care to the community-based setting, driven by health care reform, consumerism and technology, among other factors. But what will health care look like in 2030 and beyond? How will each hospital prepare for this future? In a future world, we expect that:

  • More and more health care will be provided virtually
  • Common inpatient surgical procedures will be delivered in an outpatient setting
  • Many inpatient beds will have ceased to exist
  • Consolidation will have created new and different markets

Health care organizations will be challenged to remain relevant and will need to choose the right path toward sustainability. But which path will you choose?

Expand Your Impact
One path is to expand your organization’s impact. On this path, hospitals will broaden their physical footprint to other sites of care with an increased focus on interconnectivity. These organizations will concentrate on health care and wellness across the wider care continuum for broad patient populations. Increased efforts focused on healthy communities, senior living facilities, ambulatory sites of care and many virtual engagement points are examples of this path. For health systems pursuing this path, the acute care enterprise—limited to only an emergency department, ICU and a birthing center—will be considered just another cost center that must deliver the best product at the right price.

Narrow Your Focus
Another path would narrow your organization’s focus. Hospitals following this pathway will concentrate on high-intensity, high-complexity inpatient care and take a “focused factory” approach, offering a limited range of high-end services with proven, consistent and standardized outcomes, maximizing quality and efficiency. These organizations may also provide high-level medical or surgical solutions on a broad range of cases, addressing complex patient conditions and needs. They will carve out a range of high-intensity services that they do best with a strong focus on the remaining patients who need an acute setting for their conditions.

In select cases, some large health care systems may follow both paths. When they do, however, these organizations must plan carefully to ensure that the two directions are fully supported and adequately resourced. Separate business units that function independently will likely be necessary, for goals and execution strategies will differ markedly between the parts of organizations following these two different paths.

Strategic Outsourcing in 2030
Recognizing that hospitals will no longer be able to be “all things to all people” in 2030, all hospitals will need to focus their limited resources on what they do well as defined by cost, quality and patient-centered metrics, among other measures. For instance, some organizations will develop a niche service or expertise that is so efficient and cost-effective—and has corresponding positive outcomes—that it can be an additional revenue stream if marketed to other organizations. Think about current call center, dialysis or food service programs that are currently outsourced. In the future, social services, laboratory services, case management, palliative care teams and other clinical services will also be outsourced. Will your organization be the one that develops niche services or outsources them to someone else?

Hospitals can determine their appropriate path by evaluating internal capabilities and asking hard questions about how they can best maintain the health, mission and relevance of their overall enterprise. The decision should be grounded in a concrete analysis of current assets and future needs, and the future distribution of services and programs across their markets. The infrastructure and leadership required to realize the two pathways, including footprint, care models, supporting technologies and even key partnerships, will differ in important ways, which will be detailed in a future Sg2 publication.

So, what path will you choose, and how will you start executing toward that future state? Will you choose to expand your impact by focusing on widening the net with ambulatory and virtual care? Or, will you narrow your focus with a concentration on high-intensity services and complex care?

Note: Sg2 Consultant Allison Hebron contributed to this post.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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