ProvidingInsightsthatContributetoBetterHealthPolicyChangesinHospitalChangesinHospitalCompetitiveStrategy:CompetitiveStrategy:ANewMedicalArmsRace?ANewMedicalArmsRace?KellyJ.Devers,HSCLindaR.Brewster,HSCLawrenceP.Casalino,UniversityofChicagoEmergingHealthCareMarketTrends:InsightsfromCommunitiesDecember10,2001HospitalsReviving“Retail”HospitalsReviving“Retail”StrategiesStrategiesiCompetingmoreforphysiciansandpatients,lessformanagedcarecontractsiInvestinginawidearrayofservicesthatoftenmatchorimproveonthoseofferedbyothersiAggressivelymarketingtoconsumersCurrentStrategicEmphasisCurrentStrategicEmphasisSurprisingSurprisingiHospitalconsolidationtheoreticallyminimizedneedforretailstrategies,particularlyserviceduplicationiManagedcaretheoreticallymadehospitalsmoresensitivetocostsandtheimpactofnewservicesonclinicalquality19961996--1997HospitalStrategy:1997HospitalStrategy:BuildingIntegratedDeliverySystemsBuildingIntegratedDeliverySystemsiFocusonstrategiesforsuccessinaselectivecontracting,full-riskenvironmentiResourcesdevotedtomergers,acquisitionsandrisk-contractinginfrastructureiSelectserviceconsolidationsandadditions8Costreductionvs.plan“must-have”status20002000--2001HospitalStrategy:2001HospitalStrategy:BacktoTraditionalStrategiesBacktoTraditionalStrategiesiFocusonstrategiesforsuccessinabroadprovidernetwork,moderateriskenvironmentiResourcesfreed-upasintegrationisde-emphasizedandunprofitablebusinessshediAddinginpatientandoutpatientservicesattractivetospecialistsandpatientsHospitalServiceExpansions,HospitalServiceExpansions,20002000--20012001146NewopenheartprogramorexpansiontoothersystemhospitalgCardiacsurgeryprograms3515e.g.,centersfordigestivediseases,seizuredisordersgNichespecialtyservices4419e.g.,oncology,cardiology,orthopedics,neurosciencesgSpecialtycarecenters--Inpatient--Outpatient%CTSHospitals(N=43)#ReportedDescriptionServiceExpansionsHospitalFacilityExpansions,HospitalFacilityExpansions,20002000--200120012611IncludesICUsgEmergencyandoperatingroom169AcutecareorspecialtygBuildingnewhospitals2113AdditionalbedsgInpatientcapacity4017JointventureswithspecialistsgOutpatientfacilities%CTSHospitals(N=43)#ReportedDescriptionFacilityExpansionsANewMedicalArmsRace?ANewMedicalArmsRace?iNew=Rekindled8Mimickingandone-upmanshiphasreturned8RapidtechnologicalchangecontinuesiNew=Differentplayersanddynamics8Fewer,largerhospitalcompetitors8New,moreviablenon-hospitalcompetitors8GreatercostpressureiButsomecapacityconstraintsreportedPolicyImplicationsPolicyImplicationsiPotentialtodriveupcosts8Serviceduplication8Supply-induceddemandiMaythreatenclinicalquality8LowvolumeresultsinpooroutcomesiMaymisallocatecapacity8Oversupplysomeservices,undersupplyothersPotentialMarketPotentialMarketandPolicyResponsesandPolicyResponsesiMakeconsumersbetterpurchasers8Tieredapproachestocostsharing8ProvidemoreinformationonclinicalqualityiReconsiderstateandfederalpolicies8Certificateofneed(CON)8Technologyassessment8Antitrust
