At AMGA, a Changing Dynamic

By Tom Hills  /  14 Apr 2014

Earlier this month, I attended the American Medical Group Associations’ annual meeting. I left the event sure of one thing: there’s a power shift happening in healthcare, and companies need to learn how to adapt.

Historically, hospitals held most of the power in the healthcare system. After all, it’s in a hospital that the most critical procedures take place, where the highest-acuity care is delivered, and where the most money has been spent. So it’s natural that hospitals have been the center of the healthcare system, responsible for making the decisions on how care is practiced and what investments made the most sense for their system. But that power dynamic is changing, and it’s changing fast. At the AMGA conference, much of the discussion behind the scenes was focused on the new decision makers: large, physician-led groups.

What’s contributing to this change? The main driver is the transition from making sick people better, to keeping patients healthy. This transition puts physician-led groups at the heart of care coordination. They’ll take charge of delivering a wide-range of health services beyond the four walls of the hospital. We’re already starting to see patients with chronic diseases receive continued treatment, without stepping foot in a hospital. New payment models are further encouraging this transition.

As physician-led groups begin to take the lead in making investment decisions, vendors are going to have to adjust to this new paradigm.  As I see it, there are three potential challenges that vendors and groups will have to navigate in order to be successful.

  1. The end of top-down – In the past, companies could work with a champion (often a hospital president, CEO, or other chief decision maker) to begin driving investment and building support from the top-down. With physician-led groups, working with just one leader is nearly impossible. Instead of finding just one champion, companies may need to build support from a committee of physicians, many of whom are wearing different hats within an organization.
  2. Less experienced decision makers – Decision makers at hospitals have often been groomed for system leadership and are accustomed to making investment decisions about infrastructure and information technology. However, at physician-led groups, physicians are stepping into an organization management role that is much different than their typical role as a clinician. And they may not be used to dealing directly with vendors or comfortable thinking about investment risk and financial return. The advantage of their clinical background is that they understand the workflow needs within their organization, which makes them best suited to gauge how new initiatives will be adopted.
  3. Early stages of infrastructure – Many U.S. hospitals and IDNs have already made serious investments in formalizing the process of choosing infrastructure and technology. But many physician-led groups don’t yet have the organization in place to evaluate technologies, and are just now beginning to create processes to identify the best investments in IT to improve care for their patients. Companies need to consider how to support large groups as they evaluate new services and offer ways to help them establish evaluation criteria that align most closely with each group’s primary aims.

This shift in decision making is very real. Companies are going to have to remain nimble to navigate the new waters and build support for the new leaders on the healthcare block.

Posted By Tom Hills

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