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Your Outpatient Strategy: Flexibility?

Are some of your most valued business partners also your most challenging competitors? I can almost hear the response from most businesspeople: Absolutely not! You’d like to bury your competition in any legal way you can, and you certainly don’t expect your partners to compete against you.

But that’s often not the way it is in healthcare. For Dave Brooks, CEO of Providence Everett Medical Center in Everett, WA, he’s got both a partner and a competitor in the same 250-physician multispecialty practice. You knew I was talking about physician competition when I started this line of thought, didn’t you?

Dave was nice enough to take a whirlwind 24-hour round trip across the country to Nashville a couple of weeks ago—switching planes in Dallas on the outbound and Kansas City on the return—to participate in my outpatient strategies roundtable, which you will find in this issue. In Providence Everett’s case, a local large multispecialty physician group in the area developed a lot of outpatient competition that, undoubtedly, the senior management and board were not happy about. During the past few years, Everett Clinic’s two surgery centers, their diagnostic imaging center, and their sleep health center opened for business. One area that the Everett Clinic hadn’t branched into was cancer services. So naturally, this being healthcare, Dave and Providence Everett partnered with them in a new outpatient cancer center that will drive patients and revenue to both entities.

I often write in absolutes in this space. For instance, if you’ve read these columns much, you’ll know that I think patients should have more skin in the healthcare game. Hospitals should strive to add value to the patient experience and develop a continuum of care rather than simply trying to maximize current revenue through procedures. Medical device makers shouldn’t be able to hide their prices from hospitals through contracts. Those are easy. The notion that hospitals should integrate with their physicians through employment is one of my favorite oversimplified absolutes.

For some hospitals, the clean and absolute solution is simply not an option because of decades of evolution between how the local hospital and its affiliated or employed physicians relate to each other. In this case, the complicated partnership that resulted from Providence’s situation is a “dirtier” solution in theory but works well in practice.

That $62 million outpatient center adjacent to Providence Everett’s campus would have never happened had both sides been determined to do their own thing.

Worse, it might have happened twice.

Philip Betbeze