The Opportunity in Disruption, Part 5: Five Strategies of Cooperation

By JOE FLOWER The system is unstable. We are already seeing the precursor waves of massive and multiple disturbances to come. Disruption at key leverage points, new entrants, shifting public awareness and serious political competition cast omens and signs of a highly changed future. So what’s the frequency? What are the smart bets for a strategic chief financial officer at a payer or provider facing such a bumpy ride? They are radically different from today’s dominant consensus strategies. In this five-part series, Joe Flower lays out the argument, the nature of the instability, and the best-bet strategies. There are five ways that both healthcare providers and payers can cooperate while they compete to bring the highest value forward to the customer. Align incentives in the contracts: Healthcare providers must be able to provide performance guarantees that give at least some of the bottom-line risk to them. Work with third-party companies that can actually audit organizations’ abilities to give performance guarantees consistently over time. Eschew embiggening: Size per se is not a safe harbor from risk. There are few economies of scale in healthcare. Concentration within a given market can be essential to success in offering a true range of services, well supported, at a lower price, customized to the regional population, the provider mix, the state laws, and the local economy. But local concentration is not the same thing as size per se. And size does not ...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Economics The Business of Health Care cooperation Joe Flower Payers Providers The Opportunity in Disruption Source Type: blogs