The End Game

By Randy Fuller

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In Backgammon, this term refers to the final period of the game when the player begins to bring all of their pieces into the home portion of the board and remove them one by one to win the game. This phase of the game is as critical as any other as the player must continue to make sound strategic decisions to continue their advantage or turn their game in their favor. For many healthcare providers the End Game is an apt term to describe their current strategic position. Many of our clients find that they've done the hard work of transforming their quality and cost performance and yet they aren't seeing significant increases in market share or clearly established competitive differentials between themselves and their competitors. So what should leaders do to leverage the cost and quality performance that should be a strategic asset to their organization?

The short answer to this question is that leaders have not yet developed a laser-like focus on their organization's customer value proposition. The following are some suggestions for areas that can help you address your value strategy:

  • Focus on process variability: One of the key lessons of Six Sigma is the importance of measuring and managing the variance in your processes. If one-half of your customers are delighted while the other half are dissatisfied has your organization really made progress? Narrowing the variance in your processes will add more supporters in your customer base.
  • Develop strategies based on the "real" value proposition of your key customers segments. A segmentation analysis of your patient population may be helpful to determine disease states or geographic locations that are growing. Provider organizations should survey patients in these populations to determine what they value most in making the choice among healthcare providers. Do they want the very latest in medical equipment and treatments or do they value a high touch experience? While the answer to this last question is likely to be a combination of the two, knowing and meeting the needs of your patients will be essential to future success.
  • Similarly, understanding the value proposition of your organization to the physicians in your market is just as critical. While the uncertainties of healthcare reform make it difficult to predict your specific market demand for services over the next 3 - 5 years, developing some working assumptions that can form the basis of strategic actions will likely be more beneficial than delaying action until later in course of reform. In our practice we find that a consensus building process with the leadership team which identifies what is known and the key questions to answer can guide provider organizations to the broad strokes of strategic actions. With the composition of an aligned physician group so critical to most provider strategies, having an early view on the desired specialty and geographic make-up of the physician group will help to avoid the mistakes of the last wave of physician / hospital consolidation in the 90's. Once the desired framework is established, provider organizations should build an understanding of what factors the physicians in the market use to determine which hospitals to align with. What is the relative importance of economics versus other determinants of the physician experience, such as scheduling, ancillary reporting processes, or connectivity / IT capability?
  • Once the value proposition of the organization to its customers is we understood, market messages should be honed to focus on those specific areas and highlight key differences between the performance of the organization and key competitors. Given that we are in the early stages of quality and cost performance reporting, including an element of education on the meaning of various performance metrics may be beneficial to the community.
  • Finally, approach insurers in order to build collaborative efforts focused on developing unique reimbursement programs such as payment bundles that incorporate physician and hospital services across the episode of care, co-branded insurance products, or provider networks. These collaborative efforts should only be undertaken once the organization's quality and cost performance is well managed and analytics can be performed to model any proposed payment methodologies.
It's becoming clearer every day that this "End Game" phase of market transformation will be every bit as challenging as the journey toward high quality / low cost care has been. This stage is fundamentally about understanding the needs of patients and physicians, meeting those needs, and making sure that the customer perceives the high quality of your services. Counting on an "If you build it, they will come" strategy regarding cost and quality performance will not be sufficient to insure success. Like every other phase of the improvement in performance, this "End Game" has to be played with sound strategy development and execution.

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