Will there ever be a network effect in healthcare?
“Nah. Healthcare is local” you say. And, in today’s landscape, you would be correct.
There is no single national health care player that addresses healthcare needs in every major market and across every multiple channels. The closest we have is the ongoing battle between the big retailers–Amazon, CVS, Walgreens and Walmart–who all have spent billions (literally) in the last year swallowing primary care providers in the attempt to become truly national solutions. The rest are market based or regional health systems that remain effectively local and fragmented, and I would argue that even the big retailers are creating just a collection of “nodes” and not a true “network” of consistent care.
However, health benefits leaders have “neither the time nor the inclination” to only think in market-based silos and must maintain a national perspective when considering how to deliver care to their geographically distributed employees. For employers trying to create a consistent national care delivery strategy, I wanted to share another Crossover Couplet that might be useful:
First, Think Network . . .
When you are considering your health care services, what is it that you are really buying?
- Are you buying the expertise of the person who is providing the care? How they perform is often influenced by the local context in which they practice and there is little consistency.
- Are you buying a physical location where the care happens? Does it really matter in this day and age “where” or “how” the care is delivered?
- Is the care you’re purchasing actually designed to maximize health, or maximize dollar extraction? How the providers get paid is incredibly important to how the service ultimately gets delivered and its overall level of impact
- Are you buying a brand that appears to package it all up? Has this brand gained your “trust” and “confidence” in the scope and reach of its services in order to “earn” your dollars?
All of the above are critical enablers of the care model itself, but it is not enough to have single elements of the solution – great providers but the wrong financial incentives; a beautiful health center but no coordinated, team based care; a focus on service design but a reactive, disease focused, and visit based approach. Turns out the care model itself – proactive orientation, preventative focused, personalized for each member – actually, really matters in the care and caring of each member. All of these forces must work together for the care model to create a network effect.
Furthermore, when working with national employers you have to take one more important step. The care should be standardized, consistent and coordinated across all delivery points, at which point this “standard of care” can be considered the basis for a “care network” and by extension primed for the benefits of “network effects.” Simply put, the more clients that join a care network, the more capital flows into longer term investments that increase the reach of the network’s capabilities and its overall impact and wider adoption. This is the upward, virtuous cycle often seen in the establishment of a new standard of care. And, this is also why we always try to help our clients understand that they are tapping into a consistent network of care where their participation specifically increases the value of every other clients participation generally.
. . . Not Nodes;
When we start to think in terms of the power of the care network (the care model), we become less concerned about how people access its services. The “care channel”, or in our analogy, the “node,” is appropriately de-emphasized. It shouldn’t matter how we are serving the members: whether in a comprehensive, fully customized onsite health center; or a shared, more standardized nearsite; or from one of our new microsite touchpoints; or by way of mobile solutions (Vans, RV’s, or Trailers); or virtually to anywhere in the country; or, in any combination of the above. The removal of the “health center” as the center of clinical gravity naturally removes the “visit” as the underlying “unit of account”. The care network can be trusted due to the confidence instilled by the consistency, quality and effectiveness of the care that is being delivered, in any channel. Unlike those providing random access points (nodes) that aren’t connected, the power of the care model (network) is independent of the care channel through which it is accessed.
The best analogy for this concept is how you bank today. It doesn’t matter how you access your bank – in person, online, via ATM, or by phone. Modern banks don’t compete on number of branches (nodes), rather they vie for business based on the types and level of services that they can deliver through multiple channels (network) that are best suited for each consumer’s needs. You typically get access to the full capabilities and services the bank provides through whatever channel you prefer.
Furthermore, with the advent of online banking, mobile deposits and ability to wire money, the need to go into a branch store has significantly decreased. This hybrid flexibility starts to impact how in person experiences are actually reconsidered. We can see this in the data of the number of US Bank Branches per 100,000 US residents which has dramatically decreased since hitting a high in 2009.
Despite this reduction, there clearly remain specific transactions and interactions that require an in person visit – which is why bank branches will never completely go away. But, as we can see, the in person experience will certainly change.
Then, Think Nodes on the Network
We see the same thing about to be replicated in healthcare. More national clients want to be part of a national care delivery service, and as a care network gains momentum it will continue to evolve to serve more and more needs of more local employers as well. It will become the standard to be part of a national network that gives you flexibility to access its differentiated services through multiple channels as more services will move online – but, never exclusively.
This is because there will always be a fairly significant “in person” component due to the nature of healthcare services. This is where the nodes on the network serve as appropriately scoped access points that meet the needs of both local and distributed populations. Each node can have a different type of provider (RN, NP, or MD), delivering specific services (Primary Care, Occupational Health, or ancillary care) at a specific service level (access, hours of operations, call coverage, etc) that meets care expectations (accountability, reporting, tying into other programs, etc). But each node’s impact is amplified because it is part of an always ever improving network (care model). The doctor’s office won’t go away, but it won’t be like what you have been used to in the past either.
Power to the Network . . . and the Nodes!
An established national care network, complemented by appropriately scoped in person nodes serving as convenient access points, is the hybrid solution that employers are looking for. However, in order to achieve network effects you have to actually perform and produce the results of an integrated and standardized care model delivered seamlessly across service lines, across client sponsors, across markets, and ultimately, across the entire country.
This is where the true power of the care network, and their associated nodes, comes together in a new type of care delivered by Crossover. And, as you consider the possibilities this new Crossover Couplet just might come in handy:
Scott Shreeve, MD 