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Strategic Options: It's Not ACO or Nothing

Mark DuBow, for HealthLeaders Media, September 2, 2011

As with ACOs, most providers will not have all of the critical success factors in place for any single role. But after reviewing the criteria for each, hospital leaders can identify the likely best fit based on their capabilities and competencies as well as the market opportunities.

They can then establish a clear future-oriented strategy in their annual management/board retreats and strategic plan updates. Subsequently, this roadmap can be used for focusing goals, action plans, and resource allocation decisions.

The following is a more comprehensive description of the features that define each of the six strategic roles that differ from the ACO framework:

1. Low-Cost Leader
  • Selective scope of services is provided
  • Strong brand identity based on low cost and patient convenience
  • Build and serve a large patient pool (high volume leads to reduced cost per patient and enables reduced charge per patient)
  •  Build volume via contracts and "word of mouth" with little to no investment in aggressive marketing
  • Care is provided in lowest cost, "no frills" settings
  • Operational standardization and efficiency are maximized
  •  Just-in-time clinical supplies inventory
  •  Mid-level providers are used to reduce and supplement the number of physicians and nurses providing care
  •  "Bare-bones" administrative personnel
  •  Electronic connectivity and outsourcing are applied to utilize the resources of others
  •  Where limited capital investment is made, the focus is on achieving a lower cost position, allowing for a lower charge structure
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