“Leadership is the challenge to be something more than average.” Jim Rohn
Enterprise growth is an emerging trend in the ambulatory specialty space. The shift to a value-based market with an emphasis on quality rather than volume, together with associated pressures in the healthcare landscape, has fueled the consolidation of individual practices into super groups.
This trend was a predictive model and growth strategy for hospital systems as the shift to value-based care loomed on the horizon. Hospitals understood the need to grow by becoming better—leveraging cost, quality, and service advantages to attract key decision-makers as opposed to pursuing prior, price-extractive growth strategies that were driven purely by increasing size through acquisitions and expanded market share. (Advisory Board: Health System Growth Strategy for the Value-Based Market)
A similar shift is occurring with ambulatory specialty practices, which face challenges from declining reimbursement, increased costs, changes in government regulatory requirements with the advent of MACRA/MIPs, hospital system pressure and competition, and the shift from a fee-for-service model to value-based care. Physicians have realized that, in order to remain independent and profitable, they need to come together and create regional—and in some cases statewide—groups united under a common brand name and/or the formation of clinically integrated networks (CINs).
Enterprise growth empowers physicians to practice independently and compete with area hospitals and health systems. Enterprise specialty groups are a strong sustainable alternative to hospital employment and they support ancillary growth opportunities like ambulatory surgery centers (ASCs), urgent care, imaging, and physical therapy locations. They provide a platform from which to negotiate local/state/national contracts inclusive of malpractice premiums, and to direct employer opportunities. This bargaining power allows for a reduction in overhead together with an improved revenue stream. Enterprise groups also have the advantage of scale to tackle infrastructure and HCIT investments, improvements, customizations, and maintenance.
In any industry, growth through acquisition and consolidation brings challenges. It’s not easy to merge management, staff, locations, and office cultures—it requires strong leadership and governance. A unified community-facing brand, a shared growth strategy /approach, and the development of KPIs are key determinants of success. Performance metrics may include market share, geographic reach, patient growth vs. physician density, annual revenue by specialty, total cost of care, and outcomes quality. Other important considerations are developing an integrated approach for human resources, employment contracts, health and malpractice plans, purchasing/procurement, and Bundled Payments for Care Improvements (BPCI).
The emerging organization must keep the community it serves as its top priority as it transitions and the pieces come together. The main driver of enterprise growth—the need to demonstrate quality outcomes and low-cost episodic care—also serves as the attraction for referral sources within the surrounding medical community and their consumers, the patients.
Done well, the demonstration of quality outcomes will support a strong brand reputation, providing the necessary bargaining power needed with payers and employers. To accomplish this, many groups seek a common HCIT platform for patient engagement, regulatory compliance, and outcomes reporting. While this represents yet another change during a time of transition, the right HCIT partner is an integral part of the success of the organization. Other key considerations are the ability to integrate these solutions to drive a seamless experience for both the clinician and the patient. Equally important is that the HCIT solution participates in a collaborative dialogue regarding ongoing needs, and supports each individual specialist’s clinical workflow preferences and patient volume while providing reliable, dedicated, hands-on support.