Changing Your Business Model to Achieve Population Health

Healthcare is an industry in massive transition, and Kimberly White, MBA, Numeroff and Associates, based in St Louis, Missouri, is working front and center on helping administrators and physicians to change their business models to promote survival in an unforgiving business market.

Major changes are underway, and big pharma, along with the device manufacturers, are being forced to change. Medicare, the nation’s largest provider, said “we’re done,” according to Ms White. Now, organizations must conform to the Affordable Care Act and its 2700-plus pages. The general goal—the triple aim of making healthcare accessible, with better outcomes at a lower cost, is noble, but this undeniably represents a number of challenges.

In her presentation at day 2 of the National Association of Managed Care Physicians’ Spring Managed Care Forum 2014 in Orlando, entitled ntitled Association of Managed Changing Your Business Model,” Ms White began by clarifying the characteristics of this transition as primarily involving changes in the compliance, regulatory, technology, and market expectations. She stressed that pliance, regulatory, technology, and, and so they require challenging fundamental business assumptions,” which hichtypically associated with enormous resistance.da

Ms White defined population medicine as nthe systematic and transparent delivery of services to improve the health status of a given population, ultimately delivering better outcomes at lower cost.”

Somewhat open-minded clients have attempted to protect the old while building on the new. Some businesses have made incremental changes that unfortunately are inadequate. This can lead to a situation resembling that of Wile E. Coyote chasing Roadrunner—eventually, the business runs out of available road and has nowhere to go but off the edge of a cliff. This is more thoroughly described in a new book, “Healthcare at a Turning Point—A Roadmap for Change,” by Rita E. Numerof, PhD, and Michael N. Abrams, MA.

No longer can we compete by purchasing beautiful buildings. Instead, it is clear that we must be increasingly transparent, advertising our most competitive services, according to Ms White. For example, the Cleveland Clinic has been advertising their successful epilepsy treatments on billboards. To date, we have been mostly brick-and-mortar businesses, with large hospitals preferring fee-for-service business models. However, the landscape has become much more competitive, with doctors available in some grocery stores, Wal-Mart, Costco, and walk-in clinics.

In fact, medical tourism is one of the fastest growing businesses today. While a typical bone marrow transplant in the United States may cost $400,000, this service can be provided in India for just $30,000.

In this increasingly competitive and transparent market, it is critical that healthcare organizations differentiate themselves from the competition. In relation to population health, organizations must take several steps, according to Ms White. They must define target populations, benchmarks, and the associated measures of success. Within the included target populations, subpopulations must be prioritized. Then, organizations should identify where there is great variation in all measures to see what can be done to improve outcomes.

The real difference between the old and new models is largely a greater focus on personalized medicine; this is to say a greater focus on specifically selected populations with the goal of implementing the right services to the right patients in the right settings.

In the end, Ms White made a great analogy to the transition that the banking industry has made since the 1990s, when there were over 10,000 mostly smaller banks. Today, there are less than 2000 banks. In the 1990s, the customer had to adjust their schedule to the bankercu hours, and many customers went to the brick-and-mortar banks and personally knew their bankers. Today, banking can be done mostly from home and/or mobile devices at any time, without having to interact with a person. Is this the future of healthcare? “Absolutely yes,” is the answer emphatically stated by Ms White. Most significantly, it will be critical to forge alliances and focus on considering evidence-based medicine in developing institutional guidelines toward the goal of achieving better outcomes at lower costs, according to Ms White.