a value chain partnership for a hospital and how it benefits customers, suppliers and the organization

Solution Preview

A hospital climate is one of stormy relations between various entities. Employers, managed care organizations, hospitals, and physicians battle over premiums, inpatient rates, fee schedules, and percent of premium dollars. Patients are angry at health plans over problems with access, choice, and quality of care. Employers dicker with managed care organizations over prices, benefits, and access. Hospitals struggle to maintain operations, as occupancy rates decline and the shift to ambulatory care continues. Physicians strive to assure their patients get quality care while they try to maintain stable incomes. Businesses, faced with similar challenges in the competitive marketplace, have formed partnerships for mutual benefit. Successful partnerships are based upon trust and the concept of "win-win." Communication, ongoing evaluation, long-term relations, and shared values are also essential. In Japan, the keiretsu contains the elements of a bonafide partnership. Examples in U.S. businesses abound. In a hospital, partnerships will improve quality and access. When a hospital purchasers and providers link together, these partnerships create a new value chain that has patients as the focal point.
Disease management (DM) is one of a hospital's more innovative value-chain models, whereby multiple relationships are created to bring complex and time-sensitive services to market. The very nature of comprehensive, seamless DM provided through an outsourced arrangement necessitates a level of cooperation, trust, and synergy that may be lacking from more traditional vendor-customer relationships. This discussion highlights the experience of one health plan and its vendor partner and their approach to the development and delivery of an outsourced heart failure (HF) DM program. The program design and rollout are discussed within principles adapted from the theoretical framework of a value-chain model. Within the value-chain model, added value is created by the convergence and synergistic integration of the partners' discrete strengths. Although each partner brings unique attributes to the relationship, those attributes are significantly enhanced by the value-chain model, thus allowing each party to bring the added value of the relationship to their respective customers. This partnership increases innovation, leverages critical capabilities, and improves market responsiveness. Implementing a comprehensive, outsourced DM program is no small task. DM programs incorporate a broad array of services affecting nearly every department in a health plan's organization. When true seamless integration between multiple organizations with multiple stakeholders is the objective, implementation and ongoing operations can become even more complex. To effectively address the complexities presented by an HF DM program, the parties in this case moved beyond a typical purchaser-vendor relationship to one that is more closely akin to a strategic partnership.
The natural tension, of course, is between investment in patient care and in business systems and ...