Greetings from historic Gettysburg and the close of the annual OPEN MINDS Executive Leadership Retreat. I wrapped the week with an executive session, Reinventing Health & Human Service Organizations For A Value-Based World: Transformational Leadership Required!, focused on the likely changes ahead for most health and human service organizations, and the leadership challenges in making that happen.
My thoughts about the competitive framework for the evolution that lies ahead has changed in recent months. Recent mergers, acquisitions, and partnership have “melted” the previously clear lines between traditional stakeholder roles. And when things melt, you never know what shape they will take. The shift in the value chain means that many organizations need to rethink their market position in some very fundamental ways.
What are the big value chain changes with a likely strategic impact of provider organizations serving complex consumers? There are few fundamental shifts that are the top of my list.
The “service delivery boundaries” of specialty care are disappearing—The boundaries of “specialties” started to disappear several years ago. But, the shift is becoming even more pronounced in mental health and addictions, autism and intellectual disabilities, mental health and diabetes, and child welfare and trauma-informed therapies. The services that used to be separate are now viewed as a “whole”, with service line integration following the “whole person” concept. William Lopez, M.D., CPE, Senior Medical Director, Behavioral Health of Cigna Behavioral Health, put a fine point on this when he said in our recent interview that care coordination for consumers with complex needs is more about the model, than a focus on specific specialty conditions (see Focus On Models, Not Conditions).
The geographic boundaries of specialty care are becoming less relevant—Two market developments have made traditional geographic boundaries of specialty care delivery less relevant. First, there is the continued growth of national organizations providing specialty care. Second, there is the broader adoption (by consumers and by payers) of tech-enabled care delivery.
This past week, I had the chance to learn more about the work of many organizations expanding the geographic footprint of their services. For example, at yesterday’s 2018 OPEN MINDS Mergers, Acquisitions, & Affiliations Summit, the Centerstone executive team discussed their path and plan for creating a national service delivery system (see Merger, Acquisition, & Affiliations Activity In The Health & Human Service Space-A Look At The Drivers Of Change). And I think there are many organizations that will follow this path.
The other market development in the disappearing geographic boundaries is the increasing health plan integration of virtual care delivery into their services systems (for more, see my article, First Telehealth-Now Virtual Health). Anthony Hassan, Ed.D, LCSW, Chief Executive Officer & President, Cohen Veterans Network, in his presentation Creating Public/Private Partnerships: Making Meta Leadership Work, discussed the growing telehealth platform of the Cohen Veterans Network. And both of our featured speakers at this week’s Executive Leadership Retreat included robust discussions of their current and expanded future use of tech-enabled care, including Dr. Lopez in Key Issues Shaping The Market For Complex Consumers: The Health Plan Perspective On What Executives Need To Know To Succeed; and Debra Smyers, Plan Product President, Sunshine Health in Next Generation Models For Health Plan Behavioral Health Services.
The changing consumer interface—Technology has also changed the consumer relationship with the health care system. There are a growing group of virtual service delivery companies, like AbleTo, MDLive, MindDoula, MyStrength, Ginger.io, and Quartet Health that don’t just offer discrete tech-enabled services, they offer entire consumer service systems. In their planning, executives of traditional service provider organizations will need to consider how these new companies are reshaping consumer preference and consumer expectations. And there is certainly more work to do. In his presentation, “Creating An IT Strategy That Excites & Unites: Generating Support From The Board To The Front Lines With A Comprehensive Plan To Leverage IT As A Differentiator In The Marketplace”, Scott Green, Senior Vice President & General Manager, Behavioral Health, Netsmart, discussed how the consumer-facing functionality of EHRs (like consumer portals) are the least adopted technology functionality.
Health systems are embracing the entire value chain—There are 600+ health systems in the United States and they continue to get larger in both geographic service area and service scope. About 63% of accountable care organizations include a hospital (see Hospitals Participating In ACOs Tend To Be Large & Urban, Allowing Access To Capital & Data; The 2018 OPEN MINDS Medicaid ACO Trend Update, and The 2018 OPEN MINDS Medicare ACO Update: A Four-Year Trends Report). And, at yesterday’s 2018 OPEN MINDS Mergers, Acquisitions, & Affiliations Summit, Craig Albers, RN, MSN, MBA, President & Chief Operation Officer, Mercy Health St. Charles Hospital, spoke of both the recently completed of Mercy Health with Bon Secours (see New $8B Health System: Bon Secours, Mercy Health Finalize Merger) and their new telepsychiatry partnership with Lighthouse (see Lighthouse Telehealth Begins Partnership To Provide 24/7 Inpatient Psychiatric Coverage For Mercy Health). Just one of many examples of the expansion of size and scope of health systems.
Health plan backward integration continues at a rapid clip-Last, but not least, I consider the plans for backward integration by health plans as the greatest challenge to the market positioning of specialty provider organizations. United/Optum is acquiring primary care capacity (see Reliant Medical Acquired By Optum For $28M and DaVita Will Become Part Of Optum’s OptumCare Divisions Which Works With Over 80 Health Plans). Aetna and CVS will soon be merged, adding 9,700 CVS Pharmacy locations and 1,100 MinuteClinic walk-in clinics to Aetna (see The Merger Of Retail With Health Plans-Strategy, Please). Humana has purchased Kindred, the long-term care provider organization (see Kindred HealthCare Sold To Humana & Equity Firms For $4.1 Billion). In her presentation on Wednesday, Deb Smyers outlined an emerging plan by Centene to create co-owned behavioral health Independent Practice Association (IPA) as the preferred delivery system for behavioral health services.
When it comes to strategy and market positioning, there is no “cookbook” response to the changing health and human service market value chain. The impact of these changes will vary by geography, by consumer type, and by specialty. But, these are the forces that every executive team needs to consider in their strategy for long-term sustainability. For more on positioning, check out these resources from the OPEN MINDS Industry Library:
- Finding The Right EHR Partner To Bring Your Strategy To Life
- New Service Line Development: The OPEN MINDS Step-By-Step Approach To Developing Innovative Programs
- Building A New Value Proposition: Strategy & Positioning For Sustainability
- Is Your Organization Managed Care Ready? An OPEN MINDS Executive Seminar On Provider Organization Planning & Positioning For Success
- Managed Care & The I/DD Population: The Health Plan Perspective On The Strategic Challenges & Partnership Opportunities In A New Market
- 5 Tech Best Practices
- Meeting The Innovation Challenge In Health & Human Services: Building A Nimble Management Team To Respond To Opportunities In A Value-Based Market
- The Business Model Transition To Performance-Based Reimbursement: How To Optimize Your Data For Population Health Management
- Transformative Mobile Strategies for Delivering Patient-Centric Care
- Preparing For The Future In An Uncertain Market
Couldn’t join us this week here in Gettysburg? Check out our live coverage archive on Twitter @openmindscircle—#OMLeadership. And, coming up, don’t miss The 2019 OPEN MINDS Performance Management Institute session Innovative Collaborations & Partnerships For Long-Term Services: The Anthem Perspective by Leigh Davison, Vice President, LTSS Specialty Organization, Anthem, Inc. on February 15 in Clearwater Beach, Florida.