All indicators point to the healthcare
industry's transition away from the
traditional FFS model going much
slower than expected. Many entities are
taking a wait-and-see approach and
evaluating how other participants in
markets perform before fully engaging.
A Proactive Approach
The turmoil and distress in the healthcare
market is providing competitive
advantages to proactive strategic and
financial players. To capitalize on the
existing market forces, providers should:
• Develop and implement an
ambulatory or retail care strategy.
The continued evolution of
how consumers want to be
engaged is driving the rapid
growth in this area. Consumers
are demanding convenient and
affordable basic healthcare.
• Develop a population health
management model that that will
generate sustainable results coupled
with savings initiatives and quality
improvement efforts. Physicians
and nurses must be engaged in the
process to obtain buy-in from critical
physician networks seeking a partner.
The pioneers in population health
management will have significantly
more time to adjust and learn to
help capture critical market share to
bolster their negotiation positions.
They will be the participants sitting at
the table framing the reimbursement
criterion. Most importantly, truly
managing populations requires a
substantial market share or well-defined partnerships or alliances.
• Swallow the tough pill and
immediately begin the process
of transitioning to alternative
payment models. Current economic
conditions are frothy but positive,
but lower reimbursement levels
are the future. Being prepared
for what is to come is critical.
• Consider affiliations or partnerships
as part of growth and cost reduction
strategies, short of full mergers and
acquisitions. Many hospitals that
were former competitors joined
forces without full mergers in
2015, in part to avoid FTC scrutiny.
Organizations are moving to redefine
themselves in the era of value-based
performance, allowing them to retain
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their leadership teams and governing
boards, but increasing patient access
to services and the ability for the
facilities to better coordinate care.
The failure to proactively respond to the
evolving healthcare market will almost
certainly turn a healthcare entity into an
acquisition target through a distressed
acquisition or bankruptcy sale. The
only way to survive in 2016 and beyond
is to address underlying healthcare
distress in a practical manner. J
1 The index is prepared by Polsinelli Financial
Indices, LLC, a subsidiary of the law firm of
Polsinelli PC, and is licensed to Polsinelli
PC for distribution and publication.