There’s no doubt healthcare is in a constant state of flux. The demands put on health systems to improve quality, reduce costs and increase revenue and market growth can seem insurmountable. But are mergers and acquisitions the best way to address these issues? I’d argue no, and here’s why.
Merger and acquisition activity is up 57 percent compared to last year, according to a report by the Wall Street Journal. The report states that for all of 2018, M&A activity could reach more than $4.8 trillion.
Instead of acquiring more, the key could be improving the quality and continuity of patient care delivery.
Sustaining market growth is often where the challenge starts.
Competing health systems. Changing government regulations. Fluctuating physician locations and affiliations. Evolving market dynamics. All of these can cause utilization trends to wax and wane, and service line growth to stall.
The real opportunity to influence growth may lie in using market data to develop service lines through shifts in physician referral trends, addressing sources of patient leakage, and increasing physician loyalty, rather than building a bigger delivery system.
A data-driven and measurable approach should include evaluation of:
- Physician patient volumes
- Procedural utilization
- Facility use
- Referral patterns
When data and analytics are applied, the approach can identify barriers to care, more clearly define populations to tailor care delivery, and enhance patient care and satisfaction. Without data to back market growth strategies, service line definitions can often be too large or not based on clearly defined care models. Leaving the answer of what attracts patients up to guesswork can lead to gaps in care–the opposite of the original intention.
With data-driven insights across service lines, hospitals and health systems can evaluate strategies by modeling return on investment to ensure they are making the right investments. Those initiatives can then be tracked and measured over time to understand performance and make adjustments in a timely manner.
Data and analytics can provide a deep understanding of the volumetrics necessary for sustainable growth, better-aligned physicians and improved outcomes. Bigger isn’t better. And when it comes to services lines, the cliché of working smarter, not harder can really apply. Using the right data is the only way to get there.