This article was published by Becker’s Hospital Review on December 14, 2016.
Healthcare has been a somewhat paradoxical industry in that it has made tremendous clinical strides with rapid advancements of treatments, medications, and diagnostics. These advancements have required significant investments and risk-taking by the companies and clinicians involved. From a management perspective, however, healthcare has been typified by risk-averse practices focused on avoiding errors rather than making advancements.
This risk aversion has been enabled by the relatively mature and stable “business of healthcare”. This stability is being upended by significant changes which are creating tremendous uncertainty. There are two key types of uncertainty faced by most industries – technical and demand.
Healthcare has had a relatively certain level of demand for decades while there has been increasing, but still relatively moderate, levels of technical uncertainty compared to other industries. Increasing consumer expectations are going to dramatically increase the uncertainty of demand in the coming years – new sites of care are opening in various settings (e.g. drug stores, fitness centers, and online) with a push to meet consumer preferences for convenience and 24x7 access for non-urgent needs.
The Triple Aim is going to fundamentally transform preventive and ambulatory services which will in turn significantly decrease inpatient volumes (admittedly, this decrease will be somewhat offset as the baby boomers enter the age of high care utilization). But how and at what pace remain to be seen as most health systems carefully transition to value-based care.