Bob Dylan once wrote, “…..he not busy being born is busy dying”. This sentiment could not be more relevant in today’s healthcare market where reform has amplified the strategic imperative of innovation. While the highest priority for all stakeholders is, unquestionably, to improve the cost and quality of care, healthcare executives must compete in a zero sum game to increase profits from customers that wish to reduce their overall expenditures without compromising effectiveness. The fundamental economic reality for healthcare market participants today is that maintaining the status quo is not a recipe for success.
In an increasingly retail healthcare environment where high deductible benefit plan designs propagate, and Federal, State and private exchanges serve as a rising tide for consumerism, health insurance plans must fight not only to maintain their relevance to employers who, historically, have offered employees substantially subsidized health benefits, but also to establish themselves as a value-added partner to self-funded employers and healthcare providers (e.g. health systems, hospitals, physician groups etc) who aspire to assume more financial risk. Indeed, in the emerging value-based healthcare market, providers will seek to translate risk assumption into increased profitability by adeptly managing population health, and astutely catering to the demands of patients who, increasingly, will exhibit consumer behavior patterns. Moreover, health plans will endeavor to implement narrow networks in order to extract price concessions from providers in order to offset the increased costs associated with expanded access. The new value-based healthcare business model blends benefits and payment competencies with care delivery and data analysis capabilities, and will transform previously siloed business processes into a more integrated and interrelated value chain. No matter how you look at it, in a value-based market where economic benefits will be driven by performance, collaboration is an essential alternative to internally building the capabilities and competencies required for success.
While Dylan implied that doing nothing is a recipe for extinction, his lyrics capture the creative, and perhaps traumatic, process of innovation and the high stakes repercussions of failing to do so. Legendary management consultant, Peter Drucker, claimed that innovation is as much about discipline as it is about creativity. In today’s healthcare market where the lines of competition are blurring and the velocity of change can paralyze anyone without the vision to navigate, disciplined collaboration will become healthcare’s most important innovation. It seems perfectly clear that no firm, whether health plan, provider or vendor, can reasonably possess all the assets and capabilities, whether human, financial, intellectual or operational, necessary to be sustainably successful in such an environment. Market participants must build a framework for evaluating, prioritizing and executing collaborative relationships and transactions that will create an advantage in an increasingly complicated ecosystem. Collaboration, looking outside the boundaries of one’s firm to enhance competitive position, must be embraced as new table stakes and, as Dylan might say, “….get busy collaborating, or else.”