When the integrated model works well, it can be a wonderful thing in terms of improved visibility and better efficiency. However, it is incredibly difficult to pull off. The path is littered with acquisitions gone bad as the pendulum swings between waves of consolidation and waves of divestiture. Culture clashes, incentive misalignment, and complex replacement or integration of technology systems are just a few of the barriers to overcome.
For most of the market, vertical integration followed by a rip-and-replace systems strategy is just not an option. The challenge for healthcare technology providers in 2015 and beyond is to provide a credible alternative that leverages the integration of disparate systems, spanning healthcare providers that are not financially integrated. In fact, we need technology that can enable coopetition: a care delivery system that will enable intervention solutions that span the care continuum to address the needs of specific populations, while still protecting the ability for the same players to be competitors in other parts of their business.
I see three significant trends developing as the healthcare delivery system struggles to find a path to a virtual integration model that works: Community coalitions, narrow networks, and evidence-based models.
Healthcare is local -- the majority of healthcare costs incurred within a few miles of patient’s home. Some of the early pioneer ACOs tried to manage the vertical integration path without the connectivity infrastructure in place and have already thrown in the towel. Too many of their patients were receiving care out of network. Not only did they have to struggle to impact outcomes for these patients, but they were not even able to track where they went until after the bills came in.
However, in some city markets, health coalitions composed of competing healthcare providers are taking shape. Most of these participating providers have already invested heavily in EHR systems to improve care delivery within their own walls. Now they also need healthcare IT infrastructure to coordinate transitions of care beyond their walls — efficiently sharing data with selected partners, reducing gaps in visibility and improving care coordination and care transitions. To compete against vertically integrated rivals, these care networks need to span the care continuum, including hospitals, post-acute care, physicians, outpatient clinics, social service agencies, pharmacists and other community-based organizations.
The catalyst for forming community coalitions vary. It could be a visionary hospital system, post-acute care provider, a grant-funded pilot, or a CMS demonstration project. In each case, some critical mass is required to get the ball rolling and establish sufficient value for other coalition partners to join. In 2015, healthcare IT infrastructure will allow coalition providers to collaborate with other providers across the care continuum, without sacrificing each provider’s distinct competitive interests.