Changing Face of HC Competition

Posted on September 11, 2012


Becker’s Hospital Review provided a compact summary of an issue I have blogged about in the past: competition for healthcare providers in the post-PPACA era. 

Becker’s focused on non-traditional challengers, which is my thesis for where the market revolution will come from.  Some of their suggestions to watch for:  niche providers in new markets, private equity, out-of-staters, and those with deep pockets (lots of cash).

Consolidation is necessary, and previously mentioned, I see healthcare becoming more like banking:  a handful of dominant national players.  Some are already well on their way.  It is a similar argument about health insurance.   Who wants to be traveling and not know if their local provider is accepted at a particular hospital in another state?  Patients need certainty, and not worry about whether they are in-network or out, just like I need to be able to go to Detroit, Maryland or Texas and know I can find a Bank of America.

Yet from a disruption standpoint, a new business model is what I would fear most if I were a healthcare provider.  Some smart ladies and gentlemen have done some very good research on the topic, and laid out some road maps to the aforementioned disruption.  Clayton Christensen published a good approach.  I am reading Michael Porter’s ideas now.  These ideas are coming from outside the healthcare industry.

Change on the scale of more aggressive billing or physician acquisition is not going to do it.  I have a hunch success in healthcare will involve blowing up how things are operating now, or at least a massive overhaul.  Even the wellness initiative will take years for most hospitals to understand, years to buy in, and years to implement change, mainly because it will involve hospitals collaborating more—with insurers, patients and architects—and changing their business model.

The future is uncertain but exciting for sure.  And architects must be ready to respond as well!