Looming disruptions prompt health care to adapt
August 5, 2014
The health care industry is facing a sea of change in the not-too-distant future and unless they adapt, the looming disruptions in the sector could prove costly to providers.. An article in Becker's Hospital Review, said disruptive innovation is something everyone in the industry needs to be aware of and prepared for. Because change in health care is rapidly becoming less incremental, Kenneth Kaufman, a health care consultant explained, the arrival of a disrupter is almost inevitable
"Our industry has never been through [disruptive change]," said Kaufman. "There are more and more signs all the time that we may not be going through just a change in business model, but we may be moving toward disruption."
What is a "disrupter?"
Companies with large successes are known as legacy companies. These are operations working so hard in real-time with customers and staff alike that vital business needs are missed. The disrupter then appears to address these other concerns, and the legacy companies can't adjust their business models fast enough to keep up. The current health care model, fee-for-service, is not geared towards profit-making, said Becker's. The new fee-for-value model is looking like the industry disrupter, and providers need to adapt.
Changing hospital operation strategy
Providers can adapt by embracing new business models that provide disaggregated services to the entire community. The current model offers aggregated services in a hospital environment. The industry also needs to discover new revenue sources, said Kaufman to the Health Care Financial Management Association's recent Las Vegas symposium.
"Pricing competition has arrived, and it's probably one of the scariest challenges hospitals have faced in the past 25 to 30 years," Kaufman told the convention.
Providers also need to work with the latest technological advances or risk being left behind, added Kaufman. For example, a new blood analyzing tool is available at most Walgreen stores around the country. The technology can test for more than 200 of the commonly ordered blood diagnostics in an instant without needles. Kaufman noted that because roughly 90 percent of the American populace lives within 2 miles of one of their stores, hospitals are facing a large threat to diagnostic and clinical operations.
Being prepared for the coming industry disruptions will enable hospitals and providers to move forward and not be left behind struggling to survive and adapt to the changes from a reactive position.