Industry Transformation Requires a Long View Strategy for Health Systems

Over the next decade, the US healthcare system will undergo an unprecedented era of reform and transformation, driven by the tenets of government-led reform. A shift of this magnitude changes the underlying basis for competition and will challenge even the most successful of health systems to stay ahead of the curve.

In the short term, the end point and exact design of health care reform are less important than the wheels being set in motion regarding increased industry consolidation, physician integration, care coordination, cost restructuring and competitive positioning. Over a longer horizon, however, the elements of success for health systems will be dramatically different than today, requiring a vision-driven approach to evolving and transforming the enterprise.

Now is the time for health systems to take a fresh look at their strategic plans, and assess whether they are prepared to compete in a value-based marketplace with increased emphasis on cost, quality and access.

Success will require executives, board members and physician leaders to develop a shared understanding of industry changes, adopt a vision for the future of the health system, anticipate the pace of market transformation and maintain focus through the stages of strategy execution.

Here are 7 key questions to get the conversation going at your next leadership meeting:

• How does the leadership of the health system believe the future is likely to unfold?
• What will be the fundamental requirements of success and how do those differ from today?
• What role do you want to play in that future and what will it take to get there?
• In what businesses and markets should the health system invest its resources, either through ownership or partnership?
• What core competencies will create sources of advantage and market leverage?
• How should the parent company influence and relate to the businesses under its control?
• What changes will be required in the operating and leadership structure to achieve the vision?

A defining characteristic of leadership is the ability to drive strategy-critical change in the face of uncertainty. This is certainly one of those times.

Karen Corrigan