The move from a manufacturing model to a retail market model may be the biggest challenge facing the healthcare industry, according to healthcare policy expert Paul Keckley, Ph.D.
The more traditional manufacturing model has made healthcare one seventh of the U.S. economy, writes Keckley, managing director at the Navigant Center for Healthcare Research and Policy Analysis, in a blog post. Now, however, consumers increasingly engage directly with the industry.
This transition presents several challenges for healthcare leaders as they work to:
Reduce cost and waste: Healthcare, unlike the manufacturing sector, offsets cost reductions with increased spending, cost-shifting and premium hikes. Under a retail model, prices will drive competition in healthcare, with lower costs providing a competitive advantage.
Transition from volume-based to value-based care: Under a retail model, provider-payer alignment is less important than what consumers get for their money, writes Keckley. Moreover, payer-provider risk-sharing takes a backseat to overall consumer benefit. "Price to costs relationships are readily used for competitive advantage, and guarantees/warranties (aka outcomes and experiences) a key part of the value proposition," according to Keckley.
Implement the Affordable Care Act: The ACA emphasizes several core concepts in healthcare, according to Keckley, including online tools, preventive care, transparency, accountable care and bundled payments. In a retail market, healthcare providers seeking a competitive advantage would use these requirements to demonstrate superior outcomes and care quality in response to customer demand.
Consumer demand's influence on healthcare is visible in the growth of retail health clinics, which attract consumers with its affordability and accessibility, and healthcare leaders must acknowledge consumer realities to survive the current healthcare landscape, according to futurist Ian Morrison.
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