As I was reading the interviews with our thoughtleaders in the children’s services market, I was reminded of a discussion I had yesterday with an investment banker specializing in the health and humans service market. His takeaway was that most of the market was stable, except for children’s services, which suffered from chronically low reimbursement and disproportionately high risk.
Many of the executives of child-serving organizations that I know would agree with his comments. It’s a tough market right now, particularly if you are serving children with complex needs. This includes those with severe emotional disorders, addiction issues, cognitive disabilities, autism, and physical disabilities, as well as children in the child welfare and juvenile justice systems, and children in need of special education services. For most organizations, braiding funding from three different payer sources (the health care system, the education system, the social service system) is a practical necessity for sustainability. We addressed these issues in the November edition of the OPEN MINDS Management Newsletter. (You can check out our entire series in The Changing Children’s Services Market.)
So what to do? I thought our four thoughtleaders had a very consistent theme—build on vision and strategy, keep tabs on the market, your market positioning, and the need for new service line development (and possible partnerships to make those new service lines possible). And don’t neglect marketing and branding to be successful. So what did they say exactly?
Best Practice Strategic Planning Is Essential
Howard Shiffman, former Chief Executive Officer of Griffith Centers for Children and OPEN MINDS Senior Associate, identified 11 specific challenges facing today’s child serving provider organizations – and the importance of enhanced strategic planning to stay on top of them. He noted the importance of focusing strategy on staying competitive, demonstrating the ability to manage financial risk for larger populations, and emphasizing outcomes with payers. He noted:
The demand for “documented success” will continue to increase in the future, and the provider organizations that have the best outcomes will be the ones that are able to survive and thrive. It’s imperative that executives have a performance-based vision that they can instill in both the organization’s culture, as well as the organization’s metrics-based management practices.
For our complete coverage of Mr. Shiffman’s work in this month’s newsletter, check out The Changes & Challenges In Today’s Children’s Services Market.
Create New Services When Needed & Don’t Shy Away From Collaboration
Todd Landry, Chief Executive Officer of Lena Pope explained that provider organizations need to pay close attention to contractual requirements, economies of scale, and ultimately, new service line investments as market changes push more organizations to diversify. He noted:
One strategy has been to partner with other local, nonprofit organizations to become their outsourced counseling center. We have done that with two agencies which helps them provide the needed service to clients and allows us to increase our economy of scale
For our complete coverage of Mr. Landry’s work in this month’s newsletter, check out Diversification, One More Challenge For Child Services- Q&A With Lena Pope’s Todd Landry.
Continually Reassess The Competition & Your Market Positioning
The view of the market from Paul Neitman, former Chief Operating Officer of Holy Cross Children’s Services and OPEN MINDS Senior Associate, is that the number of children (and the severity of their conditions) entering these systems has increased, and public and private systems of care have struggled financially. His strategic advice is to re-evaluate their market positioning and enhance sustainability by demonstrating comprehensive, integrated service models. He noted:
Organizations that can demonstrate comprehensive, integrated models of care with clear positive outcomes for those served will be the ones most likely to be sustainable. This includes the ability to sustain themselves under new value- and performance-based contracts which require effective, evidence-based interventions; and the ability to earn performance “bonuses” that will be needed to maintain financial sustainability.
For our complete coverage of Mr. Neitman’s work in this month’s newsletter, check out New Strategies For A Changing Children’s Services Market.
Invest In Marketing & Protect Your Brand
Steve Elson, Chief Executive Officer of Casa Pacifica, shared the situation in California, where over the past few years the state has enacted a massive child welfare reform effort that enhanced the importance of marketing, brand management, and sales and marketing to commercial insurance. He noted:
I think that marketing and keeping your name and reputation out there will be paramount for local providers. We are seeing more local, smaller, for-profit provider organizations jump into the market that commercial insurance is now focused on. There are more for-profit providers in the mid-range tier where we see ourselves. We have to be better, more nimble and have some sort of market advantage. That emphasizes the importance of sales and marketing.
For our complete coverage of Dr. Elson’s perspective in this month’s newsletter, check out Challenges For Child Welfare Services In California-Q&A With Casa Pacifica’s Steve Elson.
For organization’s serving children, finding a path to long-term sustainability is a challenge. And the current lack of action on the children’s health insurance program (see Children’s Health Insurance Program In Jeopardy) and the likely changes to social safety net programs in the year ahead (see Paul Ryan Says Republicans To Target Welfare, Medicare, Medicaid Spending In 2018) create even more uncertainty.
For more on remaining competitive, join Michael Griffin, Chief Executive Officer, Daughters of Charity, on June 5 for his plenary session, Sustainability In A Competitive Market: The Daughters of Charity Services Story, at The OPEN MINDS Strategy & Innovation Institute.