The health and human service world is changing and it’s changing fast. New technology (see Virtual Care Comes To Complex Consumers), new and different competitors (see Unlikely Bedfellows), and new financing models (see The ‘Melting’ Value Chain) are reshaping the market for provider organizations, forcing executive teams to build a new strategy to keep their organization sustainable and to reassess their organizational, technical, and cultural competencies. To be sustainable in a value-based market, organizations need scale and they need partners. Connecting with the right partner in a time of change and consolidation is essential to long-term sustainability—and the right technology investments are critical ingredients in partnership development.
At The OPEN MINDS Technology & Informatics Institute this week, Matthew M. Dorman, Founder & Chief Executive Officer at Credible Behavioral Health Software stated that to convince potential Partners and payers that you are ready to compete in the VBR environment, you need to build a case for your organization. To do that, Mr. Dorman discussed two investment theories—the “Firm Foundation Theory” and the “Castles in the Air Theory”—in his session, How Your EHR And IT Optimize A Merger, Sale, Or Acquisition.
The Firm Foundation Theory is based on the idea that any asset has an intrinsic value, and while the market value of the asset may fluctuate, investors can base investments on past data. The Castles in the Air Theory, on the other hand, is based more on investor behavior and predicting probable price rises. How do these investment theories relate to building partnerships in the health and human service market? Mr. Dorman suggested that provider organization executives should play to both of those theories of investment to demonstrate their organization’s value to potential partners.
In other words, potential Partners are looking to determine your organization’s value, so you should focus on building both the intrinsic and fundamental market value of your organization to create more partnerships opportunities across the market.
Firm Foundation Theory—Build your intrinsic value. For provider organizations, this means ensuring that you have the data you need to demonstrate your organization’s value proposition for different consumer populations and services. But this will only happen if you make the effort to identify and collect those metrics that will show your organization and service lines as a solid investment. Ensure that you have core measures, including number of consumers served, until costs, payer mix, staffing models, treatment outcomes, etc. When you show this information to potential Partners, you are showing them the business model, and how successfully the organization fits into the market.
The key—put in the work to identify, track, and store the metrics. Your organization should be able to show financial performance and clinical treatment outcomes, and then be able to tie that information to your long-term goals and strategic decisions. This is where you can demonstrate to health plans, accountable care organizations (ACOs), and other potential Partners how your organization is positioned in the market and what you bring to the table.
Castle in the Air Theory—Build your potential for value before someone else does. Provider organizations need to use data from their EHR to demonstrate the “secret sauce” that can address the pain points Partners have today, and how that will bring increasing value in coming years. Building these relationships now, before someone else offers a different solution will be more lucrative in the long run.
The key—simply having data is valuable but analyzing that data so that it gives you usable knowledge about complex, high-cost consumer populations is more valuable, by far. Use your current strategy and performance outcomes as evidence to demonstrate how you will be able to address the “pain points” of potential Partners through new programs and treatment models.
The main takeaway from the day is that no matter what, it is fundamental to any organization to show what they have that the competition doesn’t—be that a better long-term business model, or a unique service line that is uniquely capable of addressing payer, health system, or Partner needs. Your performance data will help to create a clear picture of your organization’s past, present, and future.
For more on how to position your organization for success in a data-driven, value-based market, check out these resources in the OPEN MINDS Circle Library:
- Your EHR Might Be The Key To M&A Success
- Tech Management As Executive Competency
- Getting That Return On Your Tech Investment
- EHR Implementations: What Could Possibly Go Wrong?
- Your Insights For Tech Management & Strategy
- Technology = Data = Management
- For Successful ‘Integration’, It Takes Interoperability & Patience
- Is Your EHR Up To The Challenge Of Value-Based Reimbursement?
- The Change Iceberg
For more on getting your tech adoption “right,” join OPEN MINDS Senior Associate Joseph P. Naughton-Travers, Ed.M. for his Executive Seminar, Making The Right Tech Investments For Your Organization: An Executive Seminar On Technology Budgeting & Planning, on February 13 in Clearwater, Florida.