In the past few weeks, a lot of writing and discussion around the market competitive aspects of innovation, price, quality and access pressures that hospitals are under, from non-traditional healthcare market entrants has taken place. It’s easy to say look out, wake up, pay attention, etc., and discuss the pros, cons and implications.
What does it all mean?
We do know for instance, that at some point the hospital will tip from being a revenue center to a cost center. We know that as the sophistication of the healthcare consumer grows, they will be more demanding about the value they receive for their healthcare dollar. We know that the hospital or health system is already, or will be engaging in population health management. We know as unsettling as it is, there will be new non-traditional entrants into the healthcare economy that will place intense competitive pressures- price, access, convenience, quality and speed on the hospital. It could even be considered that the big box hospital is a dinosaur, doomed to extinction only to be replaced by smaller, highly focused, cost effective and efficient places of care with better outcomes.
I postulate for your consideration then, the following question to answer and manage the velocity of change seen and unseen from a marketing perspective.
What business is the hospital in?
That is not an easy question to answer. Like the railroads of the past that went though massive change before realizing that they were in the transportation business not the railroad business, many hospitals and health systems face the those same challenges. Can one answer whether or not their organization is in the hospital business or the healthcare business? And I am not writing esoterically here and it’s not so simple a question.
Please don’t answer the question with the dismissive of course we are in the healthcare business. At which point I say prove it. And the bet is that it’s just lip service, for at the end of the day one is in the hospital business, because everything is about the hospital and what that hospital does, not the healthcare consumer.
For when one is in the healthcare business, the healthcare consumer is your focus. Their needs understood like never before. Creativity applied to the development and delivery of the healthcare services. Being in the healthcare business in a time of great never going back change, means being innovative and externally focused on what brings real value. It means not doing something because someone thought it’s a good idea, or will make the Board and physician happy.
It also means that being in the healthcare business takes the shackles off of the inherent limitations of being in the hospital business. Hospitals are not innovative healthcare consumer friendly places and never will be. Healthcare business companies are focused on the needs of the mark, healthcare consumers and value, wherever that may lie, not just what can be delivered within four walls.
The choice is clear. Are you in the hospital business or the healthcare business? And if it’s the healthcare business then time for the radical organizational makeover to prove it.