Developing Successful Partnerships Between Life Sciences and Integrated Delivery Networks

Recently, Sg2 talked to several integrated delivery network (IDN) health system members about the importance and relevance of strategic partnerships with life sciences companies. As the strategic planning cycles shorten for IDNs, the need to wisely invest time and resources in the right partnerships has become even more important. Time spent on the wrong relationship is an opportunity cost that could impact both competitiveness and sustainability, as well as execution of the organization’s mission. Time invested wisely with the right life sciences partner, however, has the potential to create a lasting advantage difficult to replicate by others.

Sg2 believes fostering an innovative partnership with a life sciences firm is an essential strategy for addressing a wide variety of IDN challenges, including negative margins (which nearly half of US hospitals have today), improving efficiency and outcomes, and transitioning to value-based care. But despite the many possibilities, partnerships are hard to pull off. A recent study suggests only a minority of pharma-payer partnership conversations on value-based contracting make the transition from informal discussion to implementation. Having a dedicated approach to partnership strategy can help get an effective, and ultimately successful, partnership off the ground.

Thinking About Partnerships?

During Sg2’s recent webinar, Supplier-Provider Partnerships 2019: Selecting the Right Strategic Partners, one of our IDN health system members outlined 5 key steps to developing a successful partnership with select life sciences organizations.

  1. Secure executive buy-in and support, and then ensure the value proposition for partnerships is not only well articulated but communicated across the organization and aligned with the overall enterprise strategy.
  2. Think big and focus on enterprise-wide challenges where the investment in a partnership can demonstrate a return on time spent.
  3. Create an exhaustive partnership list and prioritize using well-defined criteria that set all parties up for success.
  4. Engage in matchmaking to find the partner with whom there is a history of reliable and positive engagement and alignment on vision, values and mission, as well as current/future needs (gaps).
  5. Reach out to potential partners to test responsiveness and willingness to bring the right team, perspective and resources to the table.

An IDN’s Lessons Learned

No matter where your organization is on its IDN–life sciences partnership journey—or what business objectives you are focused on—getting the details right matters. Leveraging a structured approach similar to the 5-step approach outlined above will not only save time and resources on both sides but also maintain reputations, ensure relevance and open future opportunities.

A good strategic partnership is more about mindset, culture and fit, than size and reputation. Successful partnerships are not limited to large academic health systems and global fortune 500 firms (but do keep in mind that size and scale may bring more experience when solving unique, impactful challenges). Additionally, timing matters—some organizations might not be ready to fully commit to what often becomes a multiyear initiative. It is more important to find a good match: an organization that is up for the challenge and has the infrastructure and drive to move forward. Be prepared to fail fast and move on to the next partner option on your list but keep relationships warm and review options as needs change.

Tap Into Strategic Opportunity

While a lot of attention in US health care is focused on removing waste and reducing costs (eg, expenditure is expected to outpace GDP growth and exceed a fifth of GDP by 2030), the importance of partnerships beyond the traditional focus on price has never been greater—they are an untapped strategic opportunity for both providers and life sciences firms.

Sg2 members can access a full recording of the Supplier-Provider Partnerships 2019: Selecting the Right Strategic Partners webinar on-demand here. And for deeper insights on developing provider–life sciences partnership strategy from an IDN’s perspective, as well as specifics around partnership communication and metrics, reach out to Sg2’s Life Sciences & Industry team.

Karl Karlsson, PhD, Principal and General Manager
Amy Brouhle, Vice President, Business Development
Andrea White, PhD, Associate Principal

Sg2 Member Resources
Life Sciences and Industry Resource Kit


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