There are certain times in every market life cycle that are defined by the decisions and actions of certain visionaries who not only see where their profession is headed, but can find ways to be in the lead as the rest of the pack plays catch-up and waits for stronger signals or more certainty. For the radiology profession, this is one of those times. Those who can circumvent the current very substantial headwinds will reap enormous rewards. Those who anxiously await a more illuminated pathway are doomed to be laggards as health care is fundamentally transformed before our very eyes.
I have had occasion recently to spend quite a bit of time with hospital executives and in the typical board room environment where smart people are grappling with the after-effects of the ACA, and other converging market forces that have combined to rock their world, the mantra is now affiliate, combine, partner, and joint venture. Simply put, as today’s hospital executive loses his or her ability to shift revenue from high value PPO patients to cover the operating loss taken on Medicare and Medicaid patients because their beds are being increasingly filled with government-reimbursed patients (a consequence of the ACA), they are becoming increasingly interested in embracing new types of partnerships that can drive revenue in ways that they may not have been enthusiastic about even a year ago. This is a very unique moment in health care and one that will define the model for at least a generation.
Many of these executives are looking to medical imaging as a potential driver of innovation and diversification and depth of product lines that can differentiate them in an increasingly competitive population health model. As consolidation among providers continues at a fairly rapid pace, vertically integrated health systems are lining up their weaponry in preparation for similar market action from rival systems. Centers of excellence, once more promise than reality, are moving to the front lines of strategic planning sessions and are often built around imaging as the central pillar that can add significantly to a mission of clinical excellence, quality, service, and top-echelon health outcomes. Radiology needs to be in the board room as these possibilities are being discussed and strategies planned.
After years of looking for that “just right” market condition that could very well offer predictability, stability, security, and a future in which a well-run radiology group could thrive, I believe that the moment has arrived. Yes, in the short term it will continue to be unstable as health care transitions and moves through this current revolution, but successful radiology leaders will see “where the puck is going to be,” as Wayne Gretsky so aptly illustrated the notion of strategy. Where is this thing taking us? What will the new model look like? Who will be the players? Make no mistake, there is still pain coming our way, and for some who continue to wring their hands on the sidelines, there might not even be a future role. But if you agree that within the current chaos there is opportunity, the time will never be better for developing a strategy of partnership with your hospital that will provide a runway for both entities to ascend. For the bold and enlightened radiology leader, opportunity abounds.
What will you need to do? First, truly understand that partnership means give and take. This is not a time to see only a win for you at your partner’s expense. Second, learn to communicate with the hospital executive community in the language that they best understand. That is, pure business logic. Stay away from discussions that revolve around protection of lifestyles, incomes, work preferences, physician behavior, and other political issues. Be a master of understanding the hospital’s vision, mission, and core values, and find ways that your group can help perpetuate these while at the same time aligning your practice and culture around a shared set of objectives and goals. Most of all, be willing to make commitments to service and innovation, to a collaborative model of governance, and to being the kind of partner that brings more to the table than a set of pet peeves and demands for comfort and ego stroking.
Radiology’s time is now. If you have been on the fence about a potential deal or affiliation, kick it in gear and make it happen. Hospital executives are looking for solutions, and radiology has a unique opportunity to offer innovative ideas. If you would like to chat about how some of these strategies might be developed I would love to hear from you.
Contact me directly at ckauffman@kauffgroup.com