Where Did That Competitor Come From?
Thursday, March 22, 2018 | Pat White
You know who your competitors are, right? The hospital down the street. The CV practice around the corner. Imaging centers, the PCPs with diagnostic imaging in their offices. No surprises here. But what about those competitors that are creeping into your market? The ones you can’t see coming?
Let me share some examples of non-traditional competitors that might wrest some of your business from your not-so-firm grasp.
There may be nothing worse than to be excluded from a network or to realize that patients have incentives to pursue other providers.
In 2012, the Cleveland Clinic contracted with Walmart, Boeing, Lowes and other national corporations to provide heart surgery and other major procedures for their employees. There are no employee out-of-pocket expenses and the payer also covers travel, lodging and food for the patient and a caregiver. Using a local provider incurs some out-of-pocket costs to the patient. Lowes originally signed on in 2010. Four additional centers are also eligible for providing heart surgery: Geisinger, Scott & White, Virginia Mason and Mercy in Springfield, MO.
Of course, we have all heard about how health insurers embrace the opportunity to exclude providers they perceive to be either high cost and/or low quality. I gave a talk at an ACC chapter meeting a few years ago after United terminated a large number of cardiologists from its Medicare Advantage program. One of the topics was narrow networks and when I mentioned the United move, one of the physicians lamented that he was one who was terminated and had lost the ability to follow patients who had been seeing him for years. Another physician quickly commented that he was now seeing those same patients. (More on this topic was covered by Nicole Knight in her recent blog post.)
Micro-Hospitals tout lower costs and better access. It seems to me that a small venue might be very appealing to some – ease of parking, less intimidating building, etc. Will there be concerns for the quality of the physicians and staff? Pharmacies have opened walk-in clinics with some success, mostly related to primary care. Will they expand to compete in specialty care? I wonder if they will get into the micro-hospital business.
Virtual Hospitals and Virtual ICUs are prime examples of how a competitor can reach into your market from a distant geography. Will your local competitor improve its standing by partnering with a major academic system to provide virtual care? (Read about Intermountain’s strategy here.)
We have all heard stories about how millennials will demand convenience, and telemedicine seems to fit. I am no millennial but I can understand the attraction. I recall a time when I had to either call the airlines to get a ticket or go to the ticket counter at the airport. Choosing my seat meant asking an agent what was available without my ability to see. Now, I seldom interact with staff until they scan my phone as I get on board. Granted, healthcare is a far more complex business, but ease of access will differentiate you in the market.
Remote monitoring is picking up steam. I shudder to comprehend how we will respond to patients who want their EKGs interpreted after they upload the results from their wearables. It’s coming!
One of our members recently told me that they were considering abandoning some of their rural communities, some of which they served by flying a physician to the location. But after reviewing some of the solutions our corporate partners are offering, keeping those locations is now a viable option. (If you are looking for more on this topic, I recommend Dr. Bove’s article on the digital health revolution and this critique of Tel-A-Docs.)
What will health care delivery look like in five years? Likely much different than today. Now is the time to review your delivery strategy and see if you are serving your community at the level that will make it difficult for new competitors to enter the market. Technological advances will continue to emerge. Make sure you are keeping your finger on the pulse of change.
Review your delivery strategy and see if you are serving your community at the level that will make it difficult for new competitors to enter the market.
MedAxiom’s blog post is published every Thursday at www.medaxiom.com/blog
Illustration: Lee Sauer
About the Author
Pat White, MPH, Senior Advisor of MedAxiom, is a trusted cardiovascular healthcare leader and statesman. Pat has been in the healthcare management field for over 40 years. Prior to joining MedAxiom, Pat was in medical group practice management for 17 years. He spent 13 years with the Henry Ford Health System, including five years as the Administrator for the Department of Internal Medicine. He also served as the Executive Director of Michigan Heart, a 36-member cardiology practice in Ann Arbor.
Pat does senior consulting work and currently serves on the board of the Cardiology Advocacy Alliance.
To contact, email: firstname.lastname@example.org