Conceptualizing the Healthcare Business Model and Management

Book Extract from Chapter 3, page 37

THE INCREASING FOCUS ON THE COSTS OF CARE IS FORCING HEALTH CARE organizations to critically look at their basic set of processes and activities, to determine what type of value they can deliver. The basic healthcare business model is a doctor treating a patient. A more detailed business model, on the other hand, describes the resources, processes, and cost assumptions that an organization makes that will lead to the delivery of a unique value proposition to a customer. As health care organizations are beginning to transform their structure in preparation for a value-based delivery system,
understanding business model theory can help in the redesign process.
Hospitals and health systems will face a crossroads if they want to succeed in a consumer-driven healthcare economy.


The traditional business model, which puts hospitals at the center of healthcare, will not create value and attract customers. Singh and his colleagues at PwC’s Health Research Institute (HRI) found out that hospitals will likely adopt one of the four hospital business models to stay open and succeed in the shifting landscape. The models are the Product Leader, Experience Leader, Integrator, and Health Manager.


A. The Product Leader
Hospitals and health systems in this business model deliver the highest quality, most advanced care that generates predictable outcomes for one or more clinical outcomes, the organizations provide ‚best-in-class‛ care to their
geographic region, as well as to patients who travel to receive care at the organization.


B. The Experience Leader
Hospitals and health systems selecting the Experience Leader business model will place customer satisfaction at the top of their priority lists. The Experience Leader captures and retains patients by positioning itself as providing the premier customer experience when compared with the competition. Experience Leaders must understand consumer preferences and identify methods for delivering consistent experiences across all providers in the system, and even those in the virtual space. Investing in concierge-like services will be vital to supporting a high-quality consumer experience.

C. The Integrator
The Integrator is a hospital or health system with a multiregional or national reach. Through its large footprint, the organization achieves value through a broad network of providers, especially those who are low-cost. With such a
wide reach, all patient populations are a target consumer market for the Integrator hospital. Lower costs are a top priority for the Integrator business
model. As the popularity of high-deducible health plans continues, patients are putting more focus on the cost of care when selecting a provider. The Integrator is a position to show patients different care options along the cost spectrum.


D. The Health Manager
Hospitals using the Health Manager Business model are all about enhancing the health of an entire population over time. A Health Manager improves the health of entire populations over time as it focuses on finding ways to serve
complex populations and address the social determinants affecting health. This model likely will contract directly with the public sector and employers; however, an understanding of the underlying consumer markets, especially its target segments, will still be integral to a Health Manager’s strategy.

A Health Manager hospital will not resemble the traditional care delivery setting. Instead, the hospital may operate as a community organization or integrated care provider to deliver services beyond the scope of traditional healthcare.

Watch out for Series 2: Hospital Profitability Transformation Framework-ICE

Raising the bar for interoperability in Healthcare: The Covid-19 Influence.


Interoperability means the ability of health information systems to work together within and across organizational boundaries in order to advance the effective delivery of healthcare for individuals and communities.

No one who delivers healthcare hasn’t been affected in many ways by the events of 2020. Not only have we been impacted by the pandemic, but we’ve seen major government regulations passed for interoperability and data sharing.

As a champion of interoperability and population health, I’ve noticed this occupies a lot of time for both our healthcare teams and our clients. We’re adapting to rapid change in remote care delivery and safe data sharing. The impact of COVID19, and the need to create engagement, empowerment, and drive to change course of care for patients who are impacted by this disease, is still top of mind for everyone.

We will get past this pandemic eventually. But the impact on care delivery, the continued need for safe data sharing and strong information exchange networks, will remain. While there is still a lot to do, providers and technology partners have already achieved more in this space than they may have thought we could before. In many ways, in responding to COVID-19, we’ve already brought the future to the present.

Enabling care, and care management, from a distance

During the pandemic, as patients were unable to come in for regular appointments in person, remote alternatives quickly became viable. Virtual visits, telehealth options and the ability for providers to deliver interactions those patients would normally go their PCP or an urgent care center for are now “matters of fact”.

We’ve also found it’s possible to identify and manage patients across the whole care continuum, whether they’re healthy or sick, or at risk for COVID-19. Providers can also use care management solutions track their own statuses, such as ICU bed or isolation room availability, and best serve patients as needed. Some organizations are successfully managing 200% more patients using these solutions now than they were than prior to the pandemic. Coupling these with telehealth tools that actively notify patients increases their engagement and builds a strong continuity of care.

Growing scope of clinical decision support

In the past, clinical decision support has been limited to a single EHR, and depended only on that EHR’s information. Sharing information across systems enables open platforms, taking much a broader scope of relevant information as it’s needed. A global healthcare crisis like COVID has been a driver to make this happen.

For instance, as patients recover, we see key questions about lung condition, fatigue, cardiovascular issues be asked at triage. This data goes to drive other clinical workflows regardless of the initial care provider. In the future decision support will continue to be driven by patient histories and actions. This broader network of an interoperable healthy ecosystem is what we’re building for the future, and we’ve already seen it in action.

Proactive data sharing and structure

We have proved we have the resources to drive remote patient outreach and clinical decision support in a time of healthcare crisis. The future will require organizations to continue working together, especially in states of emergency, and to be proactive rather than reactive. To be reactive, to have to relearn an infrastructure to provide the resources needed immediately, both domestically and globally, wastes time. Our competitors who are proactive, including country-wide and regional health systems, are the quickest actors with the quickest ability to plan forward. They are able to make use of existing data connectivity, create operations and procedures based on what they have already, and know which information will make the most impact in addressing a crisis or eliminating a disease.

The connectivity and information do already exist, and as we’ve seen during the COVID crisis, can be used in ways many providers previously did not think possible.

Editor’s Note: This article or it version originally appeared on Allscripts’ website and also shared on Tuesday, September 8th, 2020 on Becker Hospital review