Developing a non-acute strategy: How health systems can tap distributors to help

New healthcare policies, whether federally or payer mandated, are pushing patients to lower-cost care settings — a trend that is driving hospital leaders to develop and execute growth strategies in the non-acute care space.

As this trend continues and more procedures are reimbursed in the non-acute setting, it will be imperative for hospitals to offer patients convenient care options in the outpatient setting, according to Darren Marani, senior vice president of U.S. non-acute and inside sales at Dublin, Ohio-based Cardinal Health.

"Adopting non-acute facilities into healthcare offerings will be essential, not preferred," Mr. Marani said.

Here, Mr. Marani discusses why hospitals should adopt a non-acute strategy, how distributors can help execute this strategy and how the non-acute space is evolving.

Editor's Note: Responses have been edited for length and clarity.

Question: Why should hospitals adopt a non-acute strategy?

Darren Marani: I'll quote the former professional hockey star Wayne Gretzky, who said, "skate where the puck is going." This holds true of hospital systems as well. Hospitals are aware of the shift to alternate sites of care and are recognizing a need to diversify their offerings. This push to the non-acute sector really requires health systems to create and implement a well-baked strategy, rather than just having loose affiliations or subpar relationships with ambulatory surgery centers, physician offices, long-term care centers or suppliers. Having a well-rounded continuum, with outpatient and inpatient offerings, helps provide coordinated care to support positive patient outcomes, the retention and acquisition of patients and physicians, and new revenue streams. Additionally, a non-acute strategy is key because consumers are expecting seamless transitions between inpatient and outpatient care as well as accessible, high-quality care.

Q: How can distributors help hospitals implement a non-acute strategy?

DM: Distributors should be viewed by hospital systems as business consultants that can help them expand into the non-acute market. It is a distributor's responsibility to provide robust, high-quality product selection, clinical training and education to hospital systems so they can provide efficient quality care to patients throughout the care continuum. 

We have heard from some of our customers that using a one-vendor approach for their acute and non-acute distribution needs has helped them experience a high degree of value and efficiency. A one-vendor approach enables systems to have a holistic view of their facilities, including ordering patterns, product formulary data and logistics information. At Cardinal Health, we know an ASC runs differently than a hospital or a long-term care facility, and each have different supply chain needs. We have the supply chain expertise and capabilities to help systems optimize each site of care with dedicated sales forces that specialize in the specific markets they serve.

Q: How has the non-acute space evolved in the past few years?

DM: Payers are increasingly steering patients to lower-cost care sites, like ASCs and office-based labs. In addition, more complex cases, such as total joints and spine surgeries, are moving into ASCs.1 Starting Jan. 1, CMS will reimburse six coronary interventional procedures, including angioplasty and stenting, in the ASC setting. CMS predicts that about 5 percent of percutaneous coronary intervention cases will shift to outpatient settings within the first year in the stent market alone, which will provide significant volume for these centers.2

Also, consumerism has played a significant role in driving growth for ASCs. Patients are seeking more convenient, accessible care and are attracted to lower copays.

Q: How do you see this space changing in the next five years?

DM: In my opinion, I foresee three major changes:

1. Due to the advancement of technology, like minimally invasive surgeries, ASCs will experience meteoric growth in both procedure volume and revenues due to the types of procedures moving to the outpatient setting. As a result, traditional hospitals will receive less funding, and systems will look to grow share within the non-acute space.

2. For ASCs to compete, they will require further specialization of a suite of services to meet the growing demands of their patients. With this, hospital ownership of ASCs will increase.

3. Today, North America dominates the ASC market. As healthcare costs continue to rise globally, other regions will look to expand their non-acute offerings.

To learn more about Cardinal Health and how it is helping health systems and their alternate sites of care improve patient outcomes, drive efficiencies and reduce costs, click here.

1. https://newsroom.vizientinc.com/vizient-blog/operations/how-migration-orthopedic-procedures-ascs-impacting-hospitals
2. https://www.beckersasc.com/asc-turnarounds-ideas-to-improve-performance/cms-will-reimburse-ascs-for-6-coronary-intervention-procedures-in-2020-5-things-to-know.html
3. https://www.dallasnews.com/business/health-care/2018/04/26/tenet-spends-630-million-to-boost-stake-in-addison-based-outpatient-surgery-company/
4. https://www.amsurg.com/news/envision-healthcare-and-amsurg-complete-merger/
5. https://www.reuters.com/article/us-surgical-care-m-a-unitedhealth/unitedhealth-to-buy-surgical-care-affiliates-in-2-3-billion-deal-idUSKBN14T15E

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