7 strategies for health systems to distinguish themselves

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Healthcare providers can't be all things to all people. It's time to define your organization before someone — or something — else does that for you.

 

Four experts at Strategy& — Brett Spencer, MD, Igor Belokrinitsky, Szoa Geng and Neil Patel — have explored the options hospitals have as they determine their "go-to-market posture" to differentiate themselves and capture their fair share of the market.

"Some systems are moving with a purpose and a clear set of priorities, but many others appear to be stuck, as if waiting for their competitors, regulators and payers to tell them how to define themselves. With a different way of thinking about function and form, hospitals and health systems can regain control of their destiny," they wrote.

Here are seven value propositions for health systems to differentiate themselves along care, access and cost.

1. R&D leader. This system specializes in clinical innovation and attracts patients who want the best treatments available, including those that are experimental and may not be available elsewhere. These health systems can attract patients from around the world. R&D leaders, such as Cleveland Clinic, invest in research and establish robust service lines. Patients go here for a second opinion or as a last resort when all other options are exhausted.

2. Clinical specialist. The ability to make a strong claim about clinical services is definitely a differentiator among health systems, and this clinical specialization is meaningful to both payers and employers. Clinical specialist systems have a track record of excellence. MD Anderson Cancer Center in Houston is one example of a clinical specialist, as it has taken one clinical area and used every bit of its attention and scale to delivery consistent results. "Customers who choose these hospitals and health systems have done their homework — going beyond reputation and word-of-mouth," the authors wrote.

3. Convenience king. People view this type of system and its providers as a reliable and predictable alternative to the "gold standard." Convenience kings can be valuable in a payer network, particularly those that try to exclude higher-cost providers like academic medical centers. They provide enough service offerings to meet most of the needs of their patients close to home and in community-based facilities. For other services, this health system or hospital may partner with a specialist institution or designate one facility as a center of excellence.

4. Integrator. These health systems deliver better results in individual and population health by coordinating care across a variety of settings. Integrators have strengths in wellness and post-acute care, and care managers tighten continuum of care by coordinating patient visits through various phases of illness. Danville, Pa.-based Geisinger Health System is one example, as it "offers its patients a high level of service at every point in the process — from diagnosis to surgical procedures to discharge to follow-up prescription drug regimen," according to the authors.

5. Premium property. These health systems provide the highest standard of care with the goal of enhancing the patient experience. Premium properties offer patients privacy, amenities and a hospitality-like focus on comfort and satisfaction, including luxury facilities, highly personalized services and holistic care offerings. The authors note, however, that it remains to be seen how successful this model will be under the roof of a community hospital.

6. Value maximizer. Consumers view these systems and providers as the best value for their money. They offer an affordable product that is high-quality and comes with a good experience. This is different from offering "everyday low prices." These systems want to communicate a "high value, but not cheap" message to their markets. Value maximizers remove waste, reduce complexity and seek to create pricing transparency to help patients get what they need while reducing the unnecessary extras. They also target value-conscious consumer segments, such as small businesses.

7. Price cutter. These health systems offer the lowest price point for a particular procedure while maintaining a reasonably robust standard of quality. This strategy is reinforced by the rise of price shopping for healthcare, which is already more common in areas where the patient is responsible for footing the entire bill, such as LASIK procedures or cosmetic surgery. Price cutter systems may reduce costs by delivering care in a lower-cost geography or lower-intensity setting, or they may allow physician assistants and nurse practitioners to handle more aspects of the care.

Here are more thoughts from Strategy& on hospital and health system strategy.

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