healthcaretechoutlook

There's No Better Time to Take a Necessary Risk

By Ann-Somers Hogg, Director of Innovation, Atrium Health

Ann-Somers Hogg, Director of Innovation, Atrium Health

Peter Drucker said, “Wherever you see a successful business, someone once made a courageous decision.” And Clay Christensen said, “When the tension is greatest and resources are most limited, people are actually a lot more open to rethinking the fundamental way they do business.”Combine the wisdom of these two legends, and you can reason that now may be a time where conditions are right to take a courageous and necessary risk.

In the health care environment in the U.S. today, many leaders perceive they have limited resources at their disposal for investment. This article will cover why this time of perceived resource constraint calls for leaders to invest courageously in new models of primary care, especially if they are led by women.

Disrupt Yourself, or Someone Else Will

Traditional health care business models are being disrupted by many new entrants and from multiple angles. One place the disruption is especially present is at the front door of health systems: primary and on-demand care. As a result, incumbent health care systems are seeing increased competition from alternative on-demand and primary care models. These new entrants are attracting non-users of traditional healthcare offerings and are raising significant capital to do it. This year alone, One Medical Group received an additional $350M, Paladina Health raised $165M, Iora Health obtained $100M, and the list continues. Apple and Amazon also entered the game with plans to launch their own employee health clinics. While Apple has long offered on-site primary care, they brought it inside this year with the launch of AC Wellness and will no longer outsource this capability to a third party.

“Traditional health care business models are being disrupted by many new entrants and from multiple angles”

It appears there is no shortage of extremely well-capitalized primary care disruptors. Additionally, as Rock Health’s recent report called out, deals in this arena are getting bigger, more numerous and happening in closer succession. New entrants are making care more accessible, affordable and attractive to consumers who are increasingly responsible for the cost of their care. To borrow a phrase from Oliver Wyman’s Health Innovation Center, “the new front door to health care is here,” and health systems are getting left behind.

Don’t Put off until Tomorrow What Must be Done Today

Well established health systems have an essential strategic choice to make, and they should make it rapidly. In what may seem like a time to hunker down and protect the fort, what health systems should do instead is make the courageous choice to take a necessary risk. Most—if not all—health systems are faced with tightening margins and reduced reimbursement, so why is now the time to take a risk? It’s necessary to avoid Christensen’s innovator’s dilemma where incumbents cede the low end of the market to new entrants, who then become disruptors. Instead of falling prey to the dilemma, health systems need to invest in multiple alternative primary care “bets” to maintain relevance in the primary care arena.

There are multiple pathways to make these bets. Systems can partner with new models or invest in building their own. A word of caution to those who build their own: ensure you do it in a separate organizational structure. A potentially disruptive business model must be sufficiently separated from core operations to establish its own resources, processes, and metrics of success.

Those health systems who have courageously taken the risk to establish their own alternative primary care models— Spectrum Health, Atrium Health, and Mount Sinai—are attracting non-users of traditional healthcare services who are interested in consumer-centric, total health, wellness models. However, their journey into disrupting themselves has a unique set of challenges. This is because everything within the core organization is built to protect the status quo, rather than support a different clinical and business model. Providing a new model of care within an existing system requires intentionality to distance it and protect it, much like Dayton-Hudson protected its start-up named Target.

“If you want something done, ask a woman to do it.”

Margaret Thatcher’s words were just as wise in the last century as they are today. In addition to investing in new models of primary care, health systems may consider investing in and betting on women in this arena. There is a rise in capital investments going to women-led primary care models. Recent investments in women-led models that have the potential to disrupt the traditional primary care business model include capital infusions to Parsley Health and Forward. Both are either founded by women physicians or brought them on early in development.

Health systems also need to invest in and bet on women to help launch successful new models of primary care. Their workforces are predominately female, yet as a recent HBR article noted, health system leadership does not reflect the same proportions. In addition to the need for greater equity, investing in women’s primary care innovations is a good business decision. Health systems have long known that women are the decision makers for most of their family’s health care consumption. End users often make the best designers of future solutions because they understand the jobs they are seeking to get done, and their pain points with the existing solutions. As a result, they can design a new solution to address these jobs to be done and alleviate pain points.

Take the risk. Bet on new models of primary care. Invest in women. Health systems’ futures— their ability to sustainably deliver their missions and achieve their visions for years to come—depend on it. These views are my own and do not represent those of my employer.

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