Health systems need to rapidly develop their ambulatory platforms. COVID-19, wage inflation, and other economic pressures have slowed health system ambulatory investments while the population needs continue to grow, creating yet more opportunity. To find the right services to grow, health systems need to reconsider their ambulatory strategy.
Until recently, ambulatory services have been treated as a low-acuity extension of the inpatient enterprise or a technical extension of the provider enterprise. Both perspectives are detrimental to developing a successful health system ambulatory strategy.
The market and patients do not view ambulatory services as necessarily tied to the inpatient or physician enterprise, as evidenced by the flow of venture capital and entrepreneurial dollars to non-traditional ambulatory providers and the adoption of “health system” patients readily using these services. Instead, ambulatory services and thus health systems’ ambulatory strategy must be viewed for what it is: an integrated, but distinct element of healthcare delivery system with a different population base and specific success metrics than other elements.
Rethinking health systems’ ambulatory strategy calls for changes in four areas:
The role the ambulatory enterprise plays for the system
Understanding the value which the ambulatory enterprise provides the system
The services on which the ambulatory enterprise is focused
The partners with which ambulatory services are developed
The Ambulatory Enterprise's Role
Traditionally, the ambulatory enterprise role has been:
“Feed" the health system with additional sick patients requiring inpatient services
Provide a lower cost option for increasing capacity (off-load the hospital)
Reduce the cost of care.
More recently, additional roles have been proposed:
Create relationships with patients who will not likely use the other health system components until well in the future
Form partnerships with new industry entrants outside the hospital’s core business
Be the form of an economic incentive for private practice and even employed physicians to align with the health system
Be a learning lab for health systems to offer better customer service/experience
Understanding the value which the ambulatory enterprise provides the health system is important to making the correct level of investment. With many of the emerging roles, the financial models must consider more than just the returns generated at the ambulatory site.
Rethinking Ambulatory Products
With the emerging ambulatory roles, the belief that the most valuable ambulatory services are those that generate the largest revenue needs to be rethought. This traditional thinking needs to be balanced with other value generated. With other value beyond the ambulatory transaction, the health system stands to benefit more than would be traditionally expected from certain types of ambulatory services. These include:
First-Touch Services – As a person becomes a patient, they are highly impressionable. Numerous studies have shown patients will follow their doctor's advice and referrals. As a result, whoever first touches the healthcare consumer has broad influence over how that person's care will proceed, which health system they will use and, in risk-based models, to which provider the patient will be attributed for payment.
Digital Health Services – Rapid advancements in artificial intelligence and the acceptance of video and asynchronous interactions is increasing the need for health systems to understand how to partner and deploy A.I. and other virtual visit technology.
Joint-Ventured Ambulatory Surgery and Imaging – ASCs are not a new ambulatory strategy. The rethinking involves how the health system uses joint-ventured ASCs to drive alignment with physicians and separately with patients as they create seamless, easy service models for minor procedures and surgeries. Moreover, the joint venture should allow the health system to create the capabilities that can then be brought back into the hospitals to improve the inpatient surgery programs and create better physician and patient alignments.
For imaging joint ventures, health systems should rethink who these should be joint ventured with. Should this be the radiologists who refer none of the cases, or should it be with the payers?
Rethinking the Ambulatory Partners
Rethinking ambulatory partners is now as much about learning from and capturing new capabilities at the health system. As long as there are independent physicians, the traditional specialty physician partnerships will remain an important element of the ambulatory strategy. However, the new angle focuses on how the health systems grow their internal capabilities as the industry and patients’ demands change. The trends of patients demanding immediate, easy, streamlined access have been greatly accelerated by the response to the COVID pandemic. It is no longer a question of “what” the patients want, but “can” or “how” the health systems deliver it. To meet these demands, the health systems must develop new capabilities. The ambulatory environment is a lower risk, highly responsive environment to develop these new capabilities. Choosing the right partners is thus now as much about what the health system will learn as it is about how the partner will run the venture.
The New Capabilities Needed:
Ability to segment populations by clinical and other non-clinical factors such as preferred time, access point/process, modality, and interaction / disease management approach
Strong understanding of consumerism, consumer decision making patterns
New Artificial Intelligence and other technology to augment workflows
Expertise in unscheduled, on-demand service delivery
Knowledge of the consumer definitions of convenience and service
CRM and ongoing relationship management capabilities
Downstream continuity and future care coordination/scheduling tools
As with other industries, many of these capabilities are tied to accessing, analyzing, and managing knowledge of the individuals being served. Ambulatory partnerships must consider the new capabilities a potential partner brings, recognizing these capabilities are often found outside the traditional healthcare providers.
Summary – Rethinking Ambulatory Strategy
Growing the ambulatory enterprise continues to be critical to health systems’ success. Health systems that fully understand the value ambulatory services provide will be better at investing appropriately, and once invested, seek to maximize all the value the services create. Those that do not will miss opportunities and be at a competitive disadvantage long-term.
Health System Advisors advises health systems on their competitive market positioning. Our team of motivated, engaged, and inspired strategists brings analysis, insight, and expertise as we facilitate your teams to new ways of thinking and strategies that advance your organization.
Kate Lovrien and Luke C. Peterson are principals at HSA. They can be contacted at: Kate.Lovrien@HealthSystemAdvisors.com and