5 Points on Health System Strategy Today Versus That of 2003

Health systems used to grow by getting bigger. Now? They grow by getting better.

A report from the Advisory Board compares health system strategy in 2003 with that of 2013-2023. Ten years ago, health systems practiced "price-extractive growth." Growth was positioned as input and a means to advance some larger end, such as funding innovation or extending the mission. One of the key success factors under this growth strategy was expanding market share.

Hospitals today and in the next 10 years will instead grow "because they're doing something right," according to the Advisory Board. Leaders must reposition growth as output rather than input, and a key determinant of growth is how a system expands covered lives.

Here are five points comparing health system strategy today versus a decade ago.  

Key success factors for system growth
2003: Expand market share, strengthen service lines, exert pricing leverage, solidify referrals, secure physicians and increase utilization
Today: Expand covered lives, compete on outcomes, minimize total cost, assemble networks, offer convenience and expand access

Performance metrics
2003: Discharges, service line share, fee-for-service revenue, pricing growth, occupancy rate, process quality
Today: Share of lives, geographic reach, risk-based revenue, share of wallet, outcomes quality, total cost of care

Targets of a system's growth strategy
2003: Commercial payers, government purchasers and physicians
Today: Employers, individuals and population health managers

Critical infrastructure for growth
2003: Inpatient capacity, outpatient imaging centers, ambulatory surgery centers and clinical technology
Today: Primary care capacity, care management staff and systems, health IT analytics and a post-acute care network.

Competitive dynamics
2003: Service line competition, centers of excellence, referral channels, physician loyalty
Today: Comprehensive care, patient engagement, clinical quality, service quality

More Articles on Hospital and Health System Strategy:

Hospital and Health System Strategy in 2012: 6 Key Initiatives
3 Strategic Considerations for Hospitals and Health Systems
5 Retail Principles for a More Effective Hospital Market Share Strategy

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