At some point in the future we will come out of this pandemic and things will try to return to some form of normal. We will develop a vaccine and/or treatment which will eliminate or at least significantly alleviate the clinical risk of Covid-19. When that happens, the world will try to pick up the pieces of a damaged global economy and move forward. While no one knows exactly what a post Covid-19 world will look like we do know it won’t look like the world we knew in 2019. It’s very likely that the US economy will take some time to bounce back. Some economists are worried that it will be several years if ever for the US to return to something that looks like 2019. Some industries and some companies may never fully recover.
For health care we can assume that, absent some major legislative change like Medicare for all, the number of uninsured and underinsured will go up. The number of people on Medicaid will go up. We can also assume continued and intensified cost pressures from both payers and the government. All of this will happen during a time when consumerism and the demands of the consumer will be increasing.
So, the big question is what should a medical group or hospital do in light of these major industry and economic shifts? Well, let’s begin with some wisdom from the great Sun Su. In the book, The Art of War, Sun Su tells us that “Strategy without tactics is the slowest route to victory and tactics without strategy is the noise before defeat.” This is something that every medical group and hospital should keep in mind. Success in the future will depend on a well thought out strategy paired with the detailed execution of tactics that support that strategy. Just doing one of the other will not get the results you are looking for.
With that said, let’s examine the strategies that will succeed in the future. The future for physicians and hospitals will focus largely on three areas. Market Position, Value and Service. Your strategies should focus on and address each of these areas. Let me explain.
Market Position is not just market share or size. Market position means becoming or remaining indispensable. This can be a result of size and market share. It can also be a result of having a service or procedure that only you can provide. Solid market position can come from patient loyalty and/or relationships with major employers. Anything that would make it difficult for a payer to be successful without a relationship with your group or hospital creates a valuable market position.
Value is the second item to be addressed. Notice I did not say cost. Value is larger discussion that includes total cost of care not just price per unit. For example, a surgical group that can perform more surgeries in a lower cost setting like an ASC or office setting can actually produce value even with a higher fee schedule than their competitors. This is because of the savings they produce from reduced facility costs. An OB group with a lower c-section rate produces value even with a higher fee schedule. Value is about total cost and return on the investment more than just the price per unit. Groups in the future will need to be able to calculate and prove their value. They are going to need to constantly improve their value proposition to be able to stay ahead of the competition and be successful.
Service is the final strategy that should be addressed. Service is going to become even more important to the success of medical practices in the future. In the future groups are going to need to attract the right kind of patient. More and more that patient is going to be a consumer that is going to demand higher levels of service, more flexibility in hours and appointment scheduling and increased online and electronic communication capabilities.
As we move through this crisis, successful practices are going to need to develop a strategic plan that addresses each of these three major areas. Once their strategic plan is developed, they are going to need to execute on that plan with precision and speed. Doing this will ensure your success. Failure can lead to the long slow goodbye.
I will leave you with another quote from Sun Su.
“In the midst of chaos, there is also opportunity”