Sharing risk, responsibility and reward
A new model of collaboration offers hospitals a way to thrive in an increasingly dynamic and challenging health care market.
Former US Secretary of Defense Donald Rumsfeld once famously said, regarding matters of national security, "There are unknown unknowns—there are things we do not know we don't know." The same could be said for the future of health care, as industry players face a future fogged by never-before-seen challenges—from a sharply rising population of older, sicker adults to completely novel systems to combat unsustainable costs.
One thing is certain: health care providers throughout the world are finding that to survive, let alone thrive in this environment, they need to adopt radically new approaches to how they do business. Hospitals, in particular, have to look beyond their four walls if they are to remain competitive and continue to improve the care experience for their patients and their families.
The increasing challenges in today's health care market have provided an opportunity for applying innovation not only to improve clinical technology but to improve the strategic alliance itself—to ask, how can we collaborate differently to create even more shared value?
A truly collective approach is required to not only respond to the enormous challenges that lie ahead, but to anticipate them.
Philips Healthcare and one of its longtime customers, Georgia Regents Health System (GRHealth), entered into a long-term collaborative alliance in June 2013—the first of its kind in the US. It provides some useful insights into the latest thinking in this sector.
GRHealth, the academic health center associated with Georgia Regents University, the state's public university and medical school, serves a population of nearly six million people across Georgia and South Carolina. Under the agreement—worth approximately US$300 million over 15 years—Philips is providing GRHealth with a comprehensive range of consulting services, advanced medical technologies and operational performance, planning and maintenance services, within pre-determined monthly operational costs over the full term.
The two organizations will work closely together to deliver faster, more effective and cost-efficient care, from diagnostics to therapeutics, in both inpatient and outpatient settings. The collaboration will involve all care areas, including radiology, cardiology, neurology, oncology and pediatrics, and enhance medical research and clinical technology R&D initiatives for care delivery innovation.
This groundbreaking approach encompasses Philips imaging systems, patient monitoring and clinical informatics solutions, consulting services as well as lighting and consumer products. Philips is also providing GRHealth with rapid access to new equipment and educational resources.
Crucially, Philips and GRHealth will work together to design and deploy innovative patient care strategies. "By collaborating with Philips, we're bringing all the stakeholders together at the same table to better assess and plan health care for tomorrow. It's no longer a simple supply-and-demand business model," says Shawn P. Vincent, Sr., Vice President of Partnerships, International Healthcare and Strategic Affiliations for GRHealth. "The alliance changes the entire way we look at things, and together, we're designing a better hospital for tomorrow."
Matthew Bierbaum, Sr. Director of Philips Healthcare's Managed Equipment Services business, explains the genesis of this unique approach. "As we spoke at length about the future of health care and our relationship, we discovered a strong shared desire for a better and more efficient way to address health care needs for a changing population.
"Through 18 months of talking and listening, we recognized that the practical and honest solution had to lie in a reinvention of the traditional vendor-customer model—a long-term alliance that called for shared risk, responsibility and reward. We found we could achieve both our individual and our shared goals more effectively working together rather than separately."
Prior to entering into the agreement, under the conventional transactional model, GRHealth told Philips what it needed and Philips in turn supplied its most innovative medical technologies.
"We took time to define not only common ground in financial and performance metric details, but to define how we could make wise clinical and business decisions together over the long term," explains Bierbaum. "We believe that accountability for driving sustainable change should be shared."
"Under the partnership, about a dozen Philips employees are working in-house at Georgia Regents with our clinicians, staff and patient advisers to develop ideas and systems to help improve workflow and deliver more effective, cost-efficient care," said Vincent. "And with the Affordable Care Act putting more emphasis on higher quality at lower costs, it is incumbent upon our two organizations to deliver positive, measurable results."
The long, 15-year time period is tied directly to the lifecycle of technology and anticipated innovation, plus the time it takes for new processes to influence the overall health care system. "It is fair to expect that there will be success as well as challenges to overcome this period," notes Bob Reese, Senior Vice President and Global Partner, Healthcare Transformation Services at Philips Healthcare. "Mutual commitment to the long term encourages both players to quickly recognize any failures and adjust accordingly. Sometimes the answer may lie in deploying technology differently. Other circumstances may require a review and change of the current clinical or business process."
This is just the kind of flexibility required when navigating unprecedented market challenges. According to Bierbaum, it's about settling into the shared journey, confident in the meaningful innovation that will result: "Our 15-year alliance will allow time to not only anticipate changes in how health care will be accessed, but also provide the high-quality, end-to-end delivery of care we agree is critical for improving the lives of a growing, aging patient population and those who care for them."
For GRHealth, the alliance with Philips "is a strategic alignment that will help transform the health system into an international destination for patient care services, research, and education," said Vincent. "We're constructing the model that others will want to follow, and we are determined to do it together, and to do it well."