Think like tech: Lessons for healthcare organizations

Byron Jobe
Vizient Chief Executive Officer

I was reminded recently of a quote from former General Electric CEO Jack Welch that's fitting for hospitals and healthcare today: "If the rate of change on the outside exceeds your rate of change on the inside, the end is near."

From workforce pressures and digital disruption to consolidation and value-based care, the external changes in healthcare can be daunting. But that doesn't mean hospitals can afford to ignore them. In fact, it's just the opposite.

Which got me thinking: who knows better about keeping end users at the heart of their business while constantly improving amid rapid change? Tech companies. And more specifically, software as a service (SaaS) companies.

SaaS companies such as Adobe and Salesforce offer customer services like information, tools and apps through the internet. As a result, they have a few characteristics that make them better suited to today's environment than traditional businesses:

• Quick to pivot: SaaS companies often navigate uncharted territory and must adapt to technology changes and customer demands to stay afloat.
• Relentless focus on retention: Many SaaS companies operate on a subscription model. That means that even once someone signs up for their service, they must work to keep their service valuable, so customers stay subscribed.
• Experience-obsessed: Subscription business models generate revenue by having a continuous and consistent positive impact on their users. That means exceptional customer service is crucial throughout the entire consumer journey.

Healthcare organizations have similar goals. Adapting to digital disruption, avoiding patient leakage that impacts market share and truly understanding every step of the patient journey all contribute to a sustainable and effective health system.

We've noticed top performers using SaaS-like principles to optimize their organizations. Here are three examples of how these game-changing tactics go beyond traditional healthcare performance improvement practices.

1. Improving access to primary care through segmentation

Primary care has long been a source of friction in the healthcare system. But new market entrants like Oak Street Health and the Amazon/One Medical partnership are customizing care for specific patient segments, highlighting the need for a reimagined primary care model.

Sg2 projects traditional, fee-for-service clinics will make up less than half of primary care clinics by 2030. Personalized, convenient access to care via transactional models and concierge-like platforms will be the new norm, allowing patients to receive care in their preferred location — in-person, over the phone or online.

In response, health systems should use analytics and consumer insights to identify growth segments and gaps in their primary care models. This will enable them to make strategic decisions on whether to partner, like Orlando Health did with Walmart, or compete directly with new entrants.

By providing a cohesive primary care experience, health systems are thinking like a SaaS company. Primary care activates patient loyalty and keeps them coming back to the system when they have more complex care needs.

2. Alleviating capacity crunches by rethinking ambulatory

Hospital leaders often tell me about their capacity challenges. To address this, organizations must refocus and recommit their ambulatory strategies to decompress inpatient capacity and allow more patients to access their facilities. Here's how:

• Segment outpatient volumes: Assess consumer needs and differentiate care based on clinical specialties.
  
• Understand consumer preferences: Analyze purchasing patterns and preferences to build patient loyalty.
• Embrace price transparency: Proactively implement price transparency tools to stay ahead of state-level mandates.

If you consistently had trouble getting a streaming service or app to work, you'd likely cancel your subscription. Similarly, if healthcare consumers can't easily access your providers and facilities, they'll gladly go elsewhere. By segmenting the ambulatory market and capitalizing on opportunities to differentiate your services, health systems can better address capacity challenges and retain patient loyalty.