SAN DIEGO — Outside forces are hovering around the periphery of the health care industry, eyeballing all the little things that irk customers. Hospital leaders who don't take heed could see their organizations suffer serious setbacks or crushing blows, depending on how long they sit back and let the market move around them.
Noted economic theorist and author Adrian Slywotzky did his job of rattling hospital leaders Sunday during his keynote address at the Health Forum–American Hospital Association Leadership Summit. We've seen it happen dozens of times in recent years: Industries rife with inconveniences for the customer suddenly turned upside down by forward-thinkers (remember Borders and Blockbuster?). In the old days, business designs could last 30 or 40 years, but with today's fast-paced market, they're lucky if they last five.
Health care, in particular, is a "hassle map heaven," with everything from inconsistent and opaque pricing policies to poorly coordinated care, Slywotzky argues. Retailers such as Walgreens and CVS, which thrive on targeting cost-conscious consumers, are slowly taking on a bigger role in the health care field. Plus, tech companies, big and small, that make a living by improving the customer experience are investing billions of dollars a year with the desire to expand their health care portfolios.
"It's momentum, it is extraordinarily high, and it's growing at 30 percent a year," Slywotzky told attendees. "Yes, there are hundreds of small companies. That's not important. There are dozens of companies that are very, very well-financed and, more importantly, they are not darts thrown at a board. They are all specifically tied to answer consumer questions unanswered by the system today, and they are moving at Silicon Valley speed."
Slywotzky said it would be wise to take a couple of your key people, sit them down and have them draw out a radar screen to figure out who is lurking at the edges, both inside and outside of the business. Don't think of it as a defensive maneuver of "who's out there trying to destroy my business?" Rather, ask yourself who is competing on value and who has come up with a technology that is easily replicable or could make for a partner in the future.
In a separate presentation Sunday, Christopher Dadlez, president and CEO of Saint Francis Care in Hartford, Conn., spoke of how his organization was inspired after hearing Slywotzky's remarks at another function. Rather than waiting for the edges to close around them in a competitive Connecticut market, they've invested in an innovative accountable care organization arrangement, partnering with physicians and insurer Cigna to better manage costs and quality.
They had no interest in seeing how long the old model might last, and are comfortably in the "chasm" between the old and new models of health care, waiting for others to catch up.
"In this world, we're having a tough time keeping our heads above water, even though we're the most efficient player in the state of Connecticut. But, we have to jump to this new curve," Dadlez said. "We need to do that as quickly as possible or else we're not going to make it. And there's no safety net under here. There's no one who's going to catch us and say, 'OK, you can have another try, let's put you back on the curve up here.'"