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What steps will hospitals take to separate themselves from market rivals?

 Was a question recently asked in a Linkedin group discussion

My answer, "A few modest steps along the road to strategic separation:"

1. Stop looking at other hospitals for inspiration or ideas. Most hospitals are content being no worse than anybody else. So the ideas needed for true strategic separation reside not in the hospital down the street but, maybe, in your local Apple Store and/or in watching what the young people in your market and organization are doing. Broaden your exposure to new ideas and you'll learn what other hospitals aren't doing or, better yet, what they CAN'T do. Do THAT.

2. Broaden the conversation. Hospitals are not democracies and great strategies are usually not the work of multiple committees. Still, there is a rich store of knowledge and thousands of great ideas locked up in the heads of your physicians and employees. Engage them. Ask them for their help...and mean it.

3. Move beyond the obvious service lines - cardiac, neuro, ortho, etc. Most hospitals above a certain size should have a new business "incubation" strategy focused on identifying and capturing the NEXT decade's value streams. Increasingly, a hospital admission is seen as a process failure elsewhere in the system. Payors and tech entrepreneurs are at the forefront of remaking health care by targeting those failures with new incentives, inexpensive technologies and better processes. Hospitals risk those value streams passing them by while they dither about how to encourage higher rates of handwashing - a laudable goal but hardly differentiating.

4. Re-focus on your customer - the patient. Most hospital brands still revolve around messages of "We care..." or "comprehensive bigness" or "technology through shiny new robots and radiology gadgets." Any customer benefit is either assumed or so oblique as to be invisible. I define a "brand" as that which an organization is willing to - and capable of - delivering. So why hasn't some intrepid hospital carved out a brand position of being the EASIEST and SIMPLEST hospital, the "No Bureaucracy Hospital" at which to receive care? Wait. Maybe I answered my own question there...

(As an aside, I love it when hospitals add "Nurse Navigators" to help patients through the confusing mess that the hospital itself created.)

5. Re-focus on your distribution network - the physician. It's no accident that physicians view time spent in the hospital as time wasted. So stop with the satisfaction surveys and give physicians what EVERYBODY wants: another hour in the day to do with what they choose - see more patients, spend more time with family, play more golf. Deploy technologies that improve physicians' efficiency - more timely results, less hunting for things, fewer committees, streamlined decision-making, etc. Inevitably, loyalty (and strategic separation) follows.

6. Stop justifying $100 million capital investments in new facilities by saying "Patients demand private rooms." Of course they do! Can you imagine, say, Intel, designing a new chip plant and not knowing to the penny the plant's impact on manufacturing costs? Of course not. So stop wishing and hoping and start designing facilities to deliver solid business outcomes: lower costs, higher quality, new revenue streams. Tell your architects to design buildings able to be operated at a cost level 25% lower than today's facilities. Hold them (and yourselves) accountable for delivering on that goal.


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