Updated: Mar 12, 2021
Hospitals and Health Systems are currently undergoing a complete shift in how the business of healthcare is financed. It is no longer about counting admissions and outpatient tests, but rather how efficient care is delivered with the best possible outcome. Recently, I was in New York, meeting with S&P and Moody's and one question they asked, that resonates with me was "Can you make money on the Medicare margins?" If you survey hospitals and health systems, there are few who actually can.
I am amazed at the endless opportunities hospitals and health systems forgo each day because their primary focus is on day-to-day hospital operations and delivery of quality service. The longitudinal record of a patient can reveal significant missed opportunities to provide additional margin that can be used to support a health system's mission and purpose.
The days of horizontal integration strategies, by creating value through synergies, are limited unless additional value can be created through vertical integration that provides real, organic growth. Hospitals who focus only on growing existing service lines without a more strategic view of service delivery will always be relegated to manage to the Medicare margin. They will find it difficult to execute on transforming the delivery of care to a value driven approach.
Efficiency and value can be gained through the arbitrage of services in an elegant fashion that is geared to making the patient experience seamless through the entire pathway of care. Vertical Healthcare Strategies was founded to provide solutions to harness the value of the patient relationship and support care delivery in a value based world