A view from the Center

Deloitte's Life Sciences & Health Care Blog

Scoring the goal: A game plan for reform strategy and innovation

During soccer season, I spend as much time as I can watching my four-year-old fly around the field with his fellow preschoolers. They have a rudimentary understanding that the objective is to put the ball in the back of the net. At least I think they do, because they often seem more interested in chasing the pack than scoring a goal.

Health care companies might be excused for feeling the same way. They understand that the goal of reform is cutting costs, better serving populations, improving outcomes, and streamlining processes. But going from theory to practice is easier said than done. Putting the ball in the net, even for some billion-dollar health care companies and their leadership, can be tougher than it seems.

That’s understandable, too. Health care was largely a static, fee-for-service business industry prior to 2010. It’s a different game today. The Affordable Care Act (ACA) delivered a kind of shock to the system, unleashing powerful winds of reform across the health care landscape. And many organizations are struggling to map short- and long-term strategies that embrace innovation and enable them to compete in an evolving marketplace.

In the years since the 2008 financial collapse, that landscape has begun to shift dramatically. Mergers and acquisitions are reshaping the industry. But it isn’t just the new players making a big impact. The teams are changing, as well.

Major innovators across the industry aren’t just working for Pfizer, J&J, Aetna, or Cigna anymore. Large technology-based companies and a growing number of smaller, non-traditional businesses are joining the fray, writing new business models, and gaining a foothold in an emerging market.

Disruptive innovation can be good for an industry, but this level of disruption is unprecedented in health care, and is making the path more difficult. What’s contributing to the challenge is a system that continues to be fragmented and too disconnected, especially as it pertains to data collection, storage, and exchange.

So finding the right model and right strategy to build competitive advantage should be top of mind for health care organizations. And focusing on key areas will be instrumental in helping them win the market shift.

Determining where customer value is created and delivered is critical. In a more customer-centric health care delivery system that is unfolding, organizations should transform their businesses to appeal directly to the consumer, working wherever possible with strategic partners to increase value.

Smart organizations also play to their strengths. You can’t go wrong by taking stock of what enables the organization to excel and making that the foundation, whether a pharma organization, biotech company, hospital, or health plan.

When contractors build a house, they follow a blueprint. That’s a model all good competitive businesses should follow. Make sure there are enough resources to get the job done, helping to ensure you have sufficient contingencies, and develop and stick to a timeline that will bring the project in on time, and on budget.

Organizations that don’t follow a progressive path, that don’t look to partner with health care enterprises that enhance their product offerings and customer service, are the ones who will likely be left behind. Regardless of political leaning or assessment of the value of the ACA, we accumulate about $2 trillion in health care expenses each year, and that’s heading towards over $4 trillion by 2020.  Our GDP isn’t growing nearly fast enough to keep up. So the drive to value-based care and providing the resources that can make it work are pivotal.

I worry when I see sectors of health care chasing after each other like the kids on my son’s soccer team. What they need is a thoughtful game plan, someone to point them in the right direction and to help ensure a strong finish that ends up with the ball at the back of the goal.

 

Author bio

Tom has over 15 years of consulting experience focusing on developing innovation and growth strategies as well as helping organizations build sustained capabilities. His experiences are diverse and range from defining and implementing new business models, enterprise growth strategies, product commercialization strategies to assessing the performance and value of R&D organizations. Tom has an MBA from the University of Pennsylvania, The Wharton School where he majored in Health Care Management and was a Leadership Fellow.