The whitepaper, authored by Brett Spencer, MD, Igor Belokrinitsky, Szoa Geng and Neil Patel, explores the options hospitals have as they determine their “go-to-market posture” to differentiate themselves and capture their fair share of the market.
1. Must-have network. This system is ubiquitous, well-known, well-regarded and has a loyal customer base. To exclude this type of provider from a network seems unthinkable. “Every payer will want to have the system in their network, so picking an exclusive payor partner might cap the value creation,” according to the whitepaper. Systems in this position are well-placed to market directly to consumers and employers.
2. Convenient alternative. People view this system and its providers as a reliable and predictable alternative to the “gold standard.” These health systems can be valuable in a payer network, particularly those that try to exclude higher-cost providers like academic medical centers.
3. Segment specialist. This system targets its services to a particular market segment or demographic. Pediatric hospitals are a great example. The Children’s Hospital of Philadelphia, for example, has been able to achieve national and global prominence and a special status with payers. But as health plans aggressively reshape their networks, segment specialists risk being carved out.
“Each of their offerings will be closely examined by their customers (whether employers, payers or consumers) to determine whether it is truly differentiated or whether it can be obtained elsewhere — cheaper, faster and more conveniently,” the whitepaper states.
4. Population and risk manager. Health systems are increasingly selling their offerings directly to employers, cutting out the middle-man and complexity of insurers. “What they are selling is not just access to care at a particular price point — they seek to take over the management of health and wellness of a workforce — with guaranteed performance,” according to the whitepaper.
5. Clinical specialist. The ability to make a strong claim about clinical services is definitely a differentiator among health systems. Cleveland Clinic has demonstrated this through its partnerships with major employers for cardiology bundles based on its demonstrably lower defect rate and, consequentially, lower cost of care. This clinical specialization is meaningful to both payers and employers.
6. Exclusive brand. These systems are analogous to the Apples of healthcare — the have a fiercely loyal following, a reputation for innovation and excellence and consumers do not think there are acceptable substitutes. “Mayo Clinic routinely receives overtures from hospitals all over the world who would like to ‘bask’ in the halo of its brand,” according to the whitepaper.
7. Value maximizer. Consumers view these systems and providers as the best value for their money. They offer an affordable product and good experience, much like Southwest Airlines. This type of positioning “can be beneficial to many systems,” according to the whitepaper, but it is also difficult to pull off. “We expect health systems [that] are value leaders to emphasize their quality and convenience to the consumers, while telling the value story to payers,” according to the whitepaper.
Here are more thoughts from Booz & Company on hospital and health system strategy.
More Articles on Hospital Strategy:
Developing a Regional Hospital Strategy: Key Lessons and Takeaways
Health System Strategy: Remaining Relevant by Building Primary Care Delivery Beyond Physician Employment
6 Biggest Reasons Hospital Strategy Will Fail
