"All for one and one for all" seems to be the operative mantra of our current collaborative mindset in healthcare. While we all know that the healthcare market is transforming, opinions vary as to how the transformation will occur – and exactly what it will encompass. In a recent PricewaterhouseCoopers survey, 85 percent of corporate and private equity respondents said they expected healthcare consolidation, merger and acquisition activity to increase1. At the same time, a recent analysis highlighted a dramatic drop in the rate of hospital-physician consolidation, which fell from nearly 50 percent in 2011 to only 14 percent in 20132.

Motivated by the desire to increase market share, hold their own against expanding competitors, and gain economies of scale, healthcare systems have evolved to incorporate more and varied physician practices. While many systems have set the goals of the Institute for Healthcare Improvement's Triple Aim initiative3 as their own, it has been difficult to demonstrate an improved patient experience, reduced costs or dramatic improvements in the quality of care. Patients continue to report their frustration with the appointment scheduling process, billing, and communication with the hospital and its satellites.

At the same time, organizations have struggled to achieve physician alignment, even among employed doctors. In 2015, the 2.8 trillion dollar healthcare sector is expected to see another rise in the growth rate to 6.8%, after a slower increase in 20144. The market is ripe for disruption, whether from retail urgent care centers, newly formed physician-owned organizations, or even evolving payer networks. With healthcare organizations pivoting from fee-for-service to value-based reimbursement, there has never been a better time to align your payers, providers and patients, or to consider healthcare consolidation. The confluence of risk-based contracting, high-deductible health plans and a focus on population health offers hope to today's healthcare leaders.

Organizations that are capable of not just healthcare consolidation but also the integration of contemporaneous, prioritized and actionable analytics will lead the market in finally realizing IHI's Triple Aim – and ultimately promoting the wellness of their communities. Ideally, patient data should both "feed forward" and "feed back." Contemporaneous data should follow the patient across multiple venues, while simultaneously serving to build retrospective databases that will help organizations assess the quality and cost of the care they deliver.

Similar to the Three Musketeers' guiding principles, the following three strategies will help organizations considering healthcare consolidation eliminate waste and invest resources into the outcomes of the populations they serve:

  1. Ensure all investments, project charters, values/goals, and work groups are aligned around your organization's strategic pillars. If an activity does not map clearly to your consolidated strategic plan, it should not be funded or accepted. Governance is the concept that needs to be fully leveraged here. The governance model is not simply a committee function, but rather an overall framework for decision making and accountability.

  2. Define value milestones that map back to your consolidated strategic goals. These milestones should clearly articulate how value will be measured and success recognized.

  3. Enforce an organizational model around information orientation:

    1. Information technology. Eliminate or minimize the proliferation of tools that have evolved throughout the history of your consolidated organization.

    2. Information management. Data stewardship across the lifecycle of the data is a central tenet to success. Every stakeholder should understand that every mouse click generates organizational data; they should strive to be careful stewards of the quality and judicial use of that data.

    3. Information behaviors. Setting targets and holding constituents accountable is the cornerstone of driving a culture of sustainable, constant performance improvement. Again, this must be modeled from the top down and bottom up.

Healthcare consolidation is not easy. By definition, healthcare consolidation involves bringing together entities which have traditionally been held apart. With the right strategy and a thoughtful approach to implementation, however, the sum can truly be greater than the parts.

Contact us to learn how Healthcare Analytics can help your organization spot high-value opportunities for healthcare consolidation.

1"PwC's Health Research Institute Projects Modest Uptick in Healthcare Spending Growth Rate in 2015." PWC. PricewaterhouseCoopers LLP, 24 June 2014. Accessed December 16, 2014.
2Gamble, Molly. "Integrated Chaos: Health Systems and the Aftermath of Defensive Physician Acquisitions." Becker's Hospital Review. ACS Communications, 9 June 2014. Accessed December 16, 2014.
3"IHI Triple Aim Initiative." Institute for Healthcare Improvement, 2014. Accessed December 16, 2014.
4"2.8 Trillion U.S. Healthcare Market Threatened By Disruptive New Entrants Like Those That Reshaped Retail, Banking and Travel, According To PwC's Health Research Institute." Health Plan Innovation. From Wire Services, 11 April 2014. Accessed December 16, 2014.