Health Systems and Health Reform – Now What?

 

By Cliff Frank

With the Supreme Court decision behind us, health system leadership has to face new realities and prepare for a future filled with big changes.  Here are five big ones headed your way:

1)    The days of solving hospital operating margins through contract renegotiation are done.

Insurers are moving toward narrow network products to be price competitive and to fit their premiums inside regulatory allowances.  If you offer a payer a take-it-or-leave-it offer, they might just take to leaving you.

2)    There is a new sheriff in town – the consumer. 

Insurance decisions are more likely going to be made by individual family units, not solely employers by 1/1/14. Different customers, different decision processes, different motivations.  What are you going to do to turn your brand into consumer affiliations?

3)    Provider brands are going to matter more than insurance company brands.

Consumers are going to choose insurance plans that have narrow provider network affiliations with their provider(s) of choice.  Why are you relying on insurers to do your marketing?  When was the last time that worked?  Reaching out to patients before they are horizontal in your facility is going to be critical to growing a stable customer base.

4)    If you’re not leading, you’re bleeding.

Tweaking a tired formula of buying physicians, bullying payers, and ignoring regulators won’t work anymore.  Anybody looked at the Boston insurance market lately?  New shared savings models, new care delivery models, and new value equations are going to drive market share, especially if you learn how to communicate that value to your customers – consumers.
 
5)    Focusing on IT and other internal process changes are not enough to make you a survivor.

Your investments in new systems, informatics, and lean management techniques are all necessary but will not pay off without simultaneous changes in the way you generate revenue – your link to health consumers.
It’s a wide open market now.    The landscape is changing.  Too many leaders are still on the railing so that when their health care ship starts to sink, they’ll be sucked down with it.  You can do better, be different, and thrive.  Think about people, not just patients – and make them love you.