“Your ability to learn faster than your competition is your only sustainable competitive advantage” – Arie De Gues
“He who does not contemplate the future is destined to be overwhelmed by it” – H. G. Wells
Greetings from my historic hometown of Gettysburg at the start of our annual executive leadership retreat. Today I kicked off the retreat with an executive seminar focused on one of the key ingredients for successful leadership – accurate, timely, and meaningful market intelligence. The seminar, Addressing The Challenges Of The Complex Consumer Market: A Market Intelligence Update, provided an update of our current market intelligence and spending statistics on the core areas of health and human services focused on complex consumers – and the change drivers and market disruptors that are making those trends happen.
We spent part of the day talking about the numbers behind a few key trends. In particular, the discussion focused on the spending increases for opioid addiction treatment, child mental health services, services for children with autism, and services for consumers with dementias and Alzheimer’s disease. To address these rising costs, more complex consumers, such as children in the child welfare system, consumer with I/DD, and consumers in need of long-term support services (LTSS), are being enrolled in managed care models. Concurrently, we’re seeing an increase in value-based reimbursement models that encourage health plans and provider organizations to address housing, transportation, and other support services in their population health management models.
In this environment, the payer focus is on integration and on reducing the spend on the super-utilizer population by increasing integrated models of care coordination across medical, behavioral, pharmacy, and social support systems. The focus of integrated care coordination is aimed at achieving less acute care services and more home-based services. And this push is paving the way for both value-based reimbursement and the broader use of new technology.
This market evolution is creating a new set of strategic disruptors for the organizations serving complex consumers. The key market disruptors that executive teams need to keep an eye on fall into three categories – new competitors, new treatment and service delivery technologies, and new advances in science and analytics.
First up is the new competition. Traditionally, when thinking about strategic competitors, executives are accustomed to thinking about the organizations “down the street” that deliver similar services. But in a market driven by value, competition takes on a different shape and it is the organizations with the biggest market footprint that are most likely to be the competition. The recent payer push for the integration of care coordination has resulted in an increase in “vertical” care management models for high-cost consumers with multiple chronic conditions and complex social support needs. Accountable care organizations, specialty LTSS health plans, and Medicare D-SNPs are all new models that manage specific subsets of the complex consumer population, and are increasingly taking market share. Additionally, health systems and health plans are expanding their service offering to become a full-service organization that functions as both a provider of services and an insuring organization (see The Vertical HMO Arrives; The Changing Medicaid Carve-Out Market: The 2016 OPEN MINDS Update On Vertical Carve-Outs; and Performance & The New Competition).
Next, there is an increasing variety of new technologies that change where and how services are delivered. Right now, technology is peripheral to strategy for most organizations, but value-based reimbursement both facilitates and necessitates new investments in technology. And as the market becomes more competitive, the most successful and sustainable organizations will be those that can strategically incorporate the use of technology into their business plan. Consumer and payer preferences, coupled with demonstrated positive outcomes and decreasing regulations are driving a push for the use of more telehealth and virtual service delivery systems (see Forecasting The Future: Emerging Technology & Its Impact On Community-Based Care: OPEN MINDS Circle Elite Member Executive Briefing).
Finally, advances in science and analytics are enabling new paths for both customization and standardization of how organizations manage care. Advances in analytics and decision support are slowly remaking the health and human service markets by changing both systems and the expectations of consumers and professionals. Big data, artificial intelligence, and cognitive computing are shaping the way organizations manage their service delivery and operations. And new science spurred by advances in genetics is creating a growing opportunity for customized prevention models, diagnostic accuracy, and precision medicine. These advances enable health plans and provider organizations to manage populations and consumers in new ways that can lower costs and improve performance (see Ready Or Not, Cognitive Computing Will Change Your Organization).
Having the right market intelligence is one of those essential ingredients to good leadership and a key responsibility of executive teams. To quote Frederick The Great, “It is pardonable to be defeated but never to be surprised.”
We’ll be taking a deeper dive into both the market intelligence and the best practices in good leadership this week at the 2017 OPEN MINDS Executive Leadership Retreat. Can’t join us this week here in Gettysburg? Follow our live coverage of the retreat on Twitter @openmindscircle – #OMLeadership.