To Thrive in the New Healthcare Economy, Pivot Your Operating Model

Most health system executives agree: The healthcare economy has evolved dramatically over the last several years. Along with the COVID-19 pandemic and other external market forces, advances in digital health technologies, virtual and hospital-at-home models, healthcare consumerism, and price transparency have transformed the industry. And these changes aren’t transitory. They’re here to stay.

To succeed now and in the future, health system leaders must evolve their operational models to overcome the material changes happening in their markets because marginal responses are no longer sustainable.

In this Trailblazers report from the American Hospital Association’s Market Scan, Guidehouse experts join health system leaders from Main Line Health and SSM Health to share how more dynamic, proactive, innovative, and solution-oriented operating models enable teams to successfully meet current demands and anticipate future needs.

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“Traditional hospital and health system leadership can be very siloed,” said Kristin Greenstreet, partner at Guidehouse. “Forward-looking leaders are now realizing they have to break down those barriers and do this horizontally. It’s necessary, but it’s easier said than done.”

Permanent and material challenges and strategic priorities require a permanent and material operating model. It’s a new way to run a health system. By combining discipline, rapid improvements, digital technologies, and operations capabilities in a well-integrated, well-sequenced way, leaders can achieve sustainable improvements in business, consumer experience, and cost.

An example of this work in action can be found at SSM Health. Laura Kaiser, SSM Health president and CEO, has led the design and implementation of a new operating model that would position the organization to adapt and respond to internal and external pressures more quickly.

“Operating as a unified system on efforts that can best be tackled with size, scale, talent, and expertise is helping us to respond to the increasing challenges across our industry,” said Kaiser.

This type of change to health system operating model strategy starts at the top. The CEO must believe that a material change in how their hospital or health system runs is required for sustainability and build a forward-looking management team and board.

“To do this successfully, you absolutely must have a CEO and a board who are fully committed to make this change. Those two pieces are critical,” said Steve Smoot, COO, at SSM Health.

Read the full report.