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New Market Realities

News  |  By Christopher Cheney  
   March 01, 2017

The shift to value-based care and consumerism is driving health systems and hospitals to optimize gains from nonpatient service activities and innovation.

This article first appeared in the March 2017 issue of HealthLeaders magazine.

For nonpatient service activities at health systems and hospitals, the evolution of financially lean value-based business models and consumer-driven care is transforming strategies for success.

As this evolutionary process unfolds, healthcare providers are facing new market limitations on mature mainstays of nonpatient service activities such as parking facilities. With patient satisfaction among the rallying cries of the value-based revolution, there are limits on generating revenue from parking garages and campus eateries, which patients prefer to enjoy as conveniences rather than to dread as drains on their wallets.

With these market realities, health systems and hospitals are turning to innovation activities as a vehicle for generating a host of benefits, including clinical care advances that improve quality and lower costs, new revenue stream opportunities, and support for broad strategic objectives.

Satisfaction among patients and employees is one of the primary limitations on traditional sources of nonpatient service revenue, says Stephen Allegretto, CPA, MPH, vice president of strategic analytics and value innovation at Yale New Haven Health System (YNHHS) in Connecticut, which includes an academic medical center, more than 6,300 physicians, and a 600-member multispecialty physician foundation. "We have generated parking and cafeteria income for years. That has been a long-term strategy for us. We need to do that; but the more we charge for parking, the more upset both our patients and our employees are."


Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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