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HEALTHCARE MANGEMENT BUSINESS MODELING

In Health, Healthcare, Medicine on September 20, 2012 at 8:00 am

 

Current Healthcare situation is changing. Performance is awarded, not value.

HEALTHCARE MANAGEMENT ISSUES

1. Cost

One of the biggest issues in healthcare management is the cost of medical care services and insurance. Health insurance rates often increase faster than inflation, which means they consume a larger portion of an employer’s money or an individual buyer’s income. Some employers cut their health benefits to employees as costs rise or during a period of financial distress, forcing more people to pay for their own healthcare. Those who can’t afford to do so add to the number of uninsured Americans or receive benefits from a government-subsidized program such as Medicare or Medicaid.

2. Litigation

Litigation is a significant issue for medical practices and healthcare providers alike. The threat of malpractice suits forces doctors to spend a great deal on malpractice insurance, and practitioners must pass some of this cost on to patients. Legal disputes between patients, insurance providers and healthcare providers take time and money away from medical research and treating patients.

3. Access

Access to affordable, high-quality healthcare is far from a given for millions of people. Programs such as Medicare and Medicaid are only available to elderly and low-income individuals and families that qualify. Group insurance is only an option for members of groups that receive reduced rates, such as employees of a company or members of a social club.

4. Staffing

Staffing is an ongoing issue in hospitals, doctors’ offices, nursing homes and other facilities that needs trained specialists on hand to assist patients. The broad shortage of nurses means that many duties fall to untrained or inexperienced assistants, thereby driving up the likelihood of error. Discrepancies in pay draw medical students away from certain fields and into others, resulting in a lopsided distribution of doctors and a lack, or surplus, of options for patients.

5. Types of Care

Healthcare management seeks to offer different types of care to patients. For example, terminally ill patients may elect to receive end-of-life palliative care, which focuses on alleviating symptoms instead of aggressively combating disease. Preventative care takes place before symptoms appear and saves time and money in the long-term, but requires an early awareness and up-front spending by insurance providers or patients. Electing between different types of care requires healthcare providers to educate patients and also demands that individuals take control of their own healthcare needs.
Do we have the Right Models?

Health care is the country’s economic black hole, rising from about 13% of U.S. GDP in 1999 to 18% in 2009. By 2025, it is projected to soar to 25%. Legislation and regulation can only go so far in fixing the system, and new technology can’t do much on its own. To truly combat health care’s cost challenge, the focus must shift to disruptive business models–innovative ways of delivering existing treatments at a much lower cost.

While new business models are needed across the spectrum of healthcare, many impediments prevent new ideas from taking root. Barriers stem from the fact that health care in America doesn’t function like the free market. For instance, consumers rarely pay directly for their own care, so there is little incentive for making trade-offs such as choosing something cheaper that costs less. The regulatory environment often doesn’t allow inexpensive solutions to make it to market. Finally, there are mismatched incentives: hospitals want patients to get that operation, but insurance companies don’t.

Health care in America doesn’t function like the free market. Given all that’s standing in the way of enabling new business models, we must take note when promising ones appear ready to take off.

The lesson isn’t that healthcare companies should accept charging less and making lower profits. Instead, through business model innovation, companies need to examine their value chains and throw away assumptions about the way things are done. By reinventing business models we can dramatically reduce costs and greatly improve care.

 

What does this all mean?

Successful healthcare organizations have to excel in:

  • Forging Trusted Relationships: Between Management, Providers and Patients
  • Building Networked Business Models: Connecting value-exchanging entities
  • Realizing Sustainable Economies of Scale: On both a discrete and networked basis
  • Focusing on Core Competencies: Borrowing skills and assets where required

To perform well, a healthcare organization needs,

1. Strong Management

2. Healthcare Information Technology

3. Employee Satisfaction and Retention

4. Patient Satisfaction

5. Quality Improvement

6. Training

7. Data Tracking

Q: How can changes be made?    

 A:  BY INNOVATION

Innovation of Management tools

1. Setting Goals

2. Value of Organizational Behavior

3. Develop workable business and IT infrastructure models.

4. Extending the patient-physician interaction beyond the office visit using telemedicine tools, as well as using health information exchange (HIE) to aggregate data from multiple sources.

5. Meaningful Use Guidelines:

  • Patients View, Download and Transmit Their Health Information
  • HIE Crossing Vendor and Organizational Boundaries
  • Secure Electronic Messaging
  • Summary of Care Documents
  • eMAR
  • Medication Reconciliation
  • CPOE
  •  Clinical Quality Measures

6. Applying Lean and Six sigma to current Management and workforce.

7. TELE-HEALTH: Being able to communicate using IT tools to help patients stay healthy and get rewarded well.

8. Transparency: Everyone should know what is happening in the organization.

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