Are Hospitals Healthcare's Department Stores? - Part 2

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Hello again friends and colleagues,

In Part 1 of this article, we discussed the challenges facing hospitals and health systems due to technological transformation of healthcare, and the limitations of mega-mergers as a response. It was my intent to publish Part 2 last Thursday, but unexpected duties delayed the release. Today, we delve into two alternative strategies inspired by the retail industry: platform building like Amazon and Walmart, and specialized retailers like Best Buy and Sephora. These strategies offer more effective solutions for hospitals to adapt and thrive in the changing landscape.

Strategy 1: Platform Building

Drawing inspiration from retail giants like Amazon and Walmart, hospitals can create a platform that integrates various healthcare services and technologies to improve patient care, enhance operational efficiency, and foster innovation.

Key points to consider for platform building:

1. Embrace digital transformation: Invest in telemedicine to expand access to care, especially for rural and underserved communities. Implement AI-enabled EHR to streamline patient information management, identify patterns and trends that can inform clinical decision-making, and improve the productivity of providers and staff.
2. Collaborate and integrate: Form strategic partnerships with other healthcare providers, such as primary care physicians, specialists, and pharmacies, to create integrated care services that offer comprehensive and coordinated care. Additionally, collaborate with community organizations to address social determinants of health and improve population health outcomes.
3. Adapt to value-based care models: Transition from fee-for-service models to value-based care models, which emphasize patient outcomes and cost-effectiveness. This approach encourages hospitals to prioritize preventive care, early interventions, and efficient resource utilization.
4. Enhance patient experience: Prioritize patient satisfaction and engagement by providing exceptional customer service, offering user-friendly online portals, and creating seamless patient journeys across various stages of care.
5. Invest in workforce development: Attract and retain skilled healthcare professionals by providing ongoing training on new technologies such as AI, and new care delivery models. Enable interdisciplinary collaboration and foster a culture of continuous learning.
6. Adopt a agile management approach: Implement agile management principles to accelerate innovation, streamline decision-making, and improve overall efficiency. This approach can help hospitals optimize resource allocation, reduce costs, and enhance patient outcomes.

Strategy 2: Proprietary Specialization

Hospitals can also learn from specialized retailers by focusing on offering tailored, personalized care for specific medical conditions or patient populations. Proprietary Specialization that is suggested here is different from the centers of excellence the provide undifferentiated specialty services to a local or regional market. Specialization suggested here is national (or possibly global) differentiated specialty services powered by proprietary technology or expertise.

Key points to consider for specialization strategy:

1. Focus on unique and personalized care offerings: Develop proprietary technology or expertise for specific medical conditions or patient populations, such as a specific procedure or chronic condition, and scale the delivery of this service nationally. To be successful, hospitals pursuing this strategy will have to recruit top talent, foster innovation, and develop the competency of scientific research and regulatory process management to create and protect the intellectual property needed for success.
2. Optimize resource management: Implement advanced inventory management systems to minimize waste and ensure availability of essential supplies across a national supply chain and delivery locations. Utilize data-driven decision-making to optimize resource allocation, such as staff scheduling, patient flow, and facility utilization.
3. Invest in workforce development: Attract and retain skilled healthcare professionals with expertise in specialized areas by providing ongoing training, opportunities for professional growth, and competitive compensation packages. Encourage interdisciplinary collaboration and knowledge sharing among team members to accelerate innovation and learning.

Mayo Clinic: A Promising Health System Platform Strategy

The Mayo Clinic is an innovative example of a health system that has been effectively adapted to the needs of the modern healthcare landscape. A few years ago, Mayo Clinic was among the first to offer remote care to acute patients in their homes. By leveraging the increased availability of traveling medical staff and portable internet-enabled devices, the Mayo Clinic has been able to provide high-quality care to patients outside the hospital setting, helping them recover faster and more comfortably.

The Mayo Clinic also built an effective healthcare innovation platform, the Mayo Clinic Platform, starting by creating an anonymized data repository that the Platform made available to startups to develop and validate AI models for a variety of medical conditions. Mayo partnered with Google for it's expertise and technology capabilities to supplement Mayo's resources.

Mayo, then, started expanding its data assets, partnering initially with Mercy Healthcare, and more recently with Hospital Israelita Albert Einstein in Brazil, Sheba Medical Center in Israel, and University Health Network (UHN) in Canada. This global alliance creates a data-sharing network that transcends language barriers and accelerates AI-based solutions by utilizing current data science and years of clinical data to improve patient outcomes worldwide.

By shifting from the traditional pipeline model to a platform model, Mayo Clinic fosters collaboration among providers, researchers, and health partners, enabling tools to scale and adapt in a more accessible and intuitive environment. Their vision for an AI-powered platform model demonstrates how healthcare institutions can create a more efficient, patient-centric system by embracing the transformative power of AI.

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See you next week,

Sam