Healthcare providers are discovering strategic opportunities with large employers that are self-insured, but they need to be willing to partner more directly with payers and employers.
This article first appeared in the July/August 2014 issue of HealthLeaders magazine.
Delivering value is paramount to any healthcare executive who is fighting for his or her organization's place in the industry going forward. But the devil is in the details, and how you get there is dependent on a wide variety of factors. Two organizations—one that has already made the transition and one in the early stages of it—show that any executive who is hanging on to what currently works in healthcare (still largely volume-based fee-for-service reimbursement) is in a very dangerous situation.
So says Robert Mecklenburg, MD, medical director for the Center for Health Care Solutions at Virginia Mason, a Seattle-based system that includes a 336-licensed-bed hospital, a 460-plus multispecialty physician group practice, and a network of regional clinics. He knows of what he speaks; years ago, he and his colleagues at Virginia Mason found themselves in the kind of crisis that many of their peers are now facing. In fact, the Center for Health Care Solutions owes its very existence to a frank meeting between the health system's executives and local large employers that dates to 2004.
"They appreciated our innovations on adapting the Toyota production system to healthcare, but they said our healthcare was not affordable. They said, 'We're going to consider a variety of choices, including taking you off our network of providers,' " Mecklenburg says.
Quite a threat.
And quite an opportunity.
For all healthcare consumers, whether that consumer is a patient, a health plan, or an employer, one thing is clear: Seeking closer cooperation from employers and treating them as a partner to help reduce their cost of healthcare is a winning strategy.
Philip Betbeze is the senior leadership editor at HealthLeaders.