OnSiteClinics.Org

Hospitals are the new “vendors”

For any number of newsletter issues and in many presentations, we have contended that hospitals are going to come to the forefront as vendors and compete directly in the on-site clinic environment.  Actually, the vendors are promoting their involvement to a certain extent, and the employer community is also considering how hospitals and health care systems might “fit in.” There are several reasons that this will become more evident and have more of an impact in the near term future.

1.  The hospitals and health care planning cycle is accelerating, and there is a renewed interest in access.  This is partly due to the emergence of the proposed health care changes at the Federal level and partly due to the fact that midlevel providers and retail medicine are becoming more prevalent in the marketplace.

2.  Employers who are managing their own health care “spend” are now more focused on what is beyond the primary care event.  Value-based contracting, narrow networks, select specialty networks, etc., are now being discussed at the employer level with increasing frequency and fervor.

3.  The vendors are sensitive and some see a ready opportunity for collaboration.  With payers like Cigna, Aetna, and United entering the picture, the vendors see opportunities to broker additional value in this space by managing the employer-hospital relationship.

4.  There are any number of benefits consultants and brokers who operate in this space, who see this opportunity, and are trying to exploit it as on-site clinics emerge and then move from a great idea to a great program.  They will make the connection and assist hospitals in their process of developing existing resources into viable solutions for employers.

5.  Programs are maturing and the second generation of vendors are emerging.  These vendors include many of the first generation, but they are now seasoned and they have been working with local health care resources to craft partnerships.  However, in some cases, they have also trained some of their own competition in the on-site industry.  We have to remember that most hospitals have ambulatory care services and many times these are remote and well-run.  They just have not figured out that they could be at a plant site or a school district rather than at a freeway intersection or in a suburb.

6.  The hospital-oriented literature is now reflecting that this is an idea that health care systems have to know is being pursued by employers and that they can either get in the game – or watch from the sidelines.  We have provided information to a dozen publications over the past few months about trends in this industry, and these articles will be filtering out to the industry pretty soon.  When they do, hospitals will feel more comfortable (and more compelled!) to seriously work with employers in their own region to augment on-site health care services.

Summary – predictions have three dimensions.  I know that one of these is the basic predictive, content and thrust.  I am sure that we have the idea down and that you will see other health care systems following; i.e. St. Elizabeth (Cincinnati), Wheaton Franciscan (Milwaukee), HCA (all over the country), and the Carolinas Health Care System, as they lead with their own employer programming.  When they do, you will find a well-capitalized and well-connected partner entering the RFP spin with unpredictable results.

Oh yes, the other two dimensions in a trend would be timing (When will it happen?) and scale or scope (How much of an impact?).  The answer to the former question is that it is happening right now, and the answer to the latter is that it all depends on your locale and regional market penetration.  If the health system in your primary market is emerging as a competitor, you have a significant amount of contingency planning to do.

Mike La Penna