Why Integrate and Rationalize?
Redundancy, duplication, and waste are pervasive in today’s healthcare delivery system, driving up both operating and capital costs. Opportunities exist in the administrative and clinical functions of all provider organizations, regardless of size, scope of services, and financial success. The vulnerabilities of healthcare’s economic model and the pressure to demonstrate better performance in conjunction with increasing scale have led some organizations to proactively address these opportunities. The financial repercussions of COVID-19 will compel more systems to do the same.
To achieve economic sustainability and market essentiality, we believe health systems must integrate and rationalize to enhance clinical care, optimize operations, and lower costs, ultimately focusing on the improvement of every aspect of patient care operations. While the benefits for patients and providers can be significant, reaching this future state isn’t easy, which is why many organizations have been slow to start down this path.
Later in this paper, we discuss four imperatives for organizations that are looking to advance their efforts in this area. But we begin with definitions of “integrate” and “rationalize”:
Integrate: To form, coordinate, or blend into a functioning or unified whole
Rationalize: To apply research-based managerial principles to make something (e.g., company, process, method of working) more effective and/or efficient, usually by combining or stopping particular activities with the appropriate workforce
For hospitals and health systems, integration might mean implementing common operational processes and workflows, adopting evidence-based protocols and clinical pathways, and approaching decision-making with a system mindset. Rationalization is more likely to centralize corporate functions or alter the scope, mix, and/or distribution of clinical services.