As the adage goes: “The more things change, the more they stay the same.” This certainly holds true for healthcare delivery. Today, health systems are attempting to reinvent themselves again – either by changing their name, logo, North Star vision or all of the above – to better reflect what they claim is a new value proposition for their patients and communities. While new labels may sound good, they do not change the grim state of the industry today. Healthcare systems are in critical condition, operationally and financially, largely the result of self-inflicted wounds. And given their continued fierce resistance to pivot from a failing fee-for-service (FFS) model to one that is more patient-centered, these latest moves appear to be, on some level, disingenuous.
Health system rebranding isn’t new. Many renamed themselves “XYZ Health” instead of XYZ Medical Center or Healthcare System. And another twist on this may be emerging. In the case of New York’s Stony Brook Medicine, “we’ve stopped calling ourselves a health system and started calling ourselves a health platform because we’ve got to have partnerships to make this happen,” said its Chief Strategy and Transformation Officer. The CEO of Tampa General Hospital and Florida Health Sciences Center at the University of Southern Florida added, “we look at ourselves as a family of businesses” to “address the healthcare challenges.” On the surface, these remarks may signal a move in a new direction, but when you start unpacking what’s going on, it is hardly a paradigm shift.
Call it whatever you want, but hospitals and health systems are far from “platforms.” As I said in my book, Bringing Value to Healthcare, and highlighted in my last column, no matter how beautiful their buildings are, fancy facilities and rebrand attempts only make evident that they are not in the business of healthcare. They have been and remain largely in the sickness business, making money by doing things to patients. They have largely failed to coordinate care across the continuum with various community ‘partners’ for the purpose of improving health outcomes at lower total cost of care. Their siloed IT systems, which have historically been mired in inefficiency and redundancy, were initially designed to improve payment. Their focus was to manage the administrative nightmare of billing codes and document care to shield against malpractice lawsuits. There was little if any discernible impact on improved outcomes at lower cost. Technology is certainly not their forte.
Aside from IT, healthcare delivery organizations have historically also failed to do simpler things well: coordinating patient care, being nimble and promoting ease of access. Anyone who’s been a patient in most hospitals knows that they are confusing, costly, and hard to navigate. But as these organizations now try to reinvent themselves to tout their foray into areas such as telehealth and at-home care, the reality is they have ceded that ground.
In terms of innovation, telehealth is not new. It has been around for years. Hospitals are also supposed to have community partnerships. As I explained in a Heritage Foundation paper more than a decade ago, an essential part of getting to a new and sustainable organizational model requires laser focus on social determinants of health (SDOH) and concepts that empower patients to be stakeholders in their own health care decision making. To accomplish this, delivery organizations must invest in prevention, health maintenance, and disease management, in partnership with community agencies. And while our latest Numerof & Associates State of Population Health Survey Report shows some improvements in these areas, far too many delivery organizations continue to find every excuse not to make this a reality.
Fierce resistance in the face of change continues to rule the day, and as we witnessed first-hand with Covid-19, holding on to an FFS approach doesn’t work. If the industry is serious about better health outcomes at lower total cost of care, it needs more than a rebranding exercise. It needs to redefine the underlying business model.
There is nothing wrong with rebranding, but to be credible and impactful, it has to answer a fundamental question: How are you changing the business model in a way that is transparent in cost and quality, ensures accountability across the continuum, ties payment to outcomes that matter, and places the patient-consumer squarely at the center of all decision-making? If you ask this of most healthcare executives, today, they simply don’t know and it will continue to be this way, so long as fear of financial loss continues to remain the number one impediment of transitioning to a new way of doing business – a consistent finding of our Population Health survey. As one hospital executive we interviewed for my book said: “If we’re really providing healthcare, we’re putting ourselves out of business as we have traditionally known it.”
For their part, retail disruptors have long been answering this question for them, as they chip away at traditional healthcare systems, making healthcare options far more convenient, accessible, and affordable over the offerings of legacy players. As I explained in a recent column, the blockbuster purchase of One Medical by Amazon now gives the online retailer the ability to fully integrate its three pillars – pharmacy, telehealth, and now primary care – into a comprehensive and attractive model. It is called the “doctor’s office, reimagined,” and rightly so, as it is positioned to be a potential game-changer in primary care. Efforts to rebrand may well have been prompted by Amazon’s move. But traditional players have a long way to go if they are looking to compete with these newer players.
Most legacy organizations remain hopelessly stuck on a FFS treadmill, and as I explained in my last piece, many nonprofit hospitals have veered wildly off course from their stated mission. These organizations have failed to understand a key principle — that getting to population health management, which a majority of industry leaders say is the way of the future, requires being held accountable in fundamentally new ways. This means making an economic and clinical value argument for the way in which they operate.
The irony of what we are witnessing in the latest brand reawakening is that hospitals have spent decades working to become “health systems.” And, as the flurry of mergers and acquisitions continues at a brisk pace, we know that bigger is not always better. As I opined on the impacts of hospital consolidation in the wake of Covid, the results are predictable: less competition, higher costs and deteriorating quality. Adding to this, if organizations have not mastered the challenges of merger/integration, the larger the organization is, the more it will struggle to rapidly adapt to major disruptions like the one we experienced over the past three years. Continuing down this path is a recipe for disaster, not forward progress.
Dr. Leonard Berry of Texas A&M University, who studied at the Mayo Clinic, said “the best way to build a strong brand in or outside of healthcare is to improve the efficiency and the effectiveness and the quality of the service you provide,” because “that leads to customer retention, that improves staff morale, that makes everything better.” Clearly, that is not where most healthcare delivery organizations find themselves today. Physicians have been sidelined because they can no longer do their jobs properly, and other healthcare workers have been treated badly during the darkest days of the pandemic. It should come as no surprise that clinicians are increasingly headed for the exit doors.
Rebranding in any industry is an expensive undertaking. When Partners HealthCare was renamed Mass General Brigham, the price tag was around $100 million. Changing even a logo can cost millions. Beyond the cost is the question of real impact. Trying to solve an identity crisis when the mission is lost at sea, will only accelerate a downward trajectory. Given the state of most hospitals’ finances today, change for change’s sake is a very risky and generally losing proposition.
Healthcare delivery organizations have not aged well, and until they conceptualize and implement a new model, we will be left with the same old wine – just packaged up in new bottles.