Becker's Hospital Review

59 Executive Briefing Rethinking Ambulatory Strategy By Luke C. Peterson, Vice President of Innovation, Urgent Care Partners, and Kate Lovrien, Principal, Health System Advisors H ealth systems have been developing their ambulatory platforms over the last several decades as technology and consumer demand has shifted from the inpatient to outpatient setting. Although the historical approach has successfully grown health system ambulatory revenue faster than inpatient revenue, health systems need to reconsider the approaches to ambulatory strategy. Until now, 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 ambulatory enterprise success. The market does not view ambulatory services as necessarily tied to the inpatient or physician enterprise, as is evidenced by the flow of venture capital and entrepreneurial dollars to non- traditional ambulatory providers. Many will say the consumer benefits from these new market entrants and their increased focus on unmet consumer needs; however, these new entrants also create care fragmentation and discontinuity. To safeguard efforts to enhance the coordination of care, health systems should reengineer their ambulatory strategy to meet consumer demands and ensure care continuity. Health systems must rethink their ambulatory strategy in five areas: 1. The role the ambulatory enterprise plays for the system 2. The services on which the ambulatory enterprise is focused 3. The structures by which the ambulatory enterprise is managed 4. The partners with which ambulatory services are developed 5. The means by which the ambulatory services are monetized The Ambulatory Enterprise's Role Historically, the ambulatory enterprise role has been to "feed" the health system with additional sick patients requiring inpatient services. Driven by rapid employment, ambulatory has acquired a new role of supporting the health system's providers. For future success, ambulatory must take on four new roles. 1. Create new access points Ambulatory services account for more than 95 percent of total healthcare encounters. As such, health system growth requires many more ambulatory access points. Moreover, these ambulatory access points must be easily accessible throughout the market to meet patient convenience expectations. This generally means ambulatory services must be developed away from the hospital campuses and in communities where people live and work. Health systems that create these neighborhood care points will remain relevant to their current and future patients by offering a more convenient healthcare experience. 2. Reduce the unit cost of care Reducing the total cost of care requires better care management, coordination and more efficient processes. Low- cost ambulatory locations create these efficient, coordinated care protocols. Lower investment costs, fewer regulations, and reduced complexity mean services in an ambulatory setting can be delivered at a lower unit cost. 3. Connect new patients to the system of care Ambulatory services require less critical mass than inpatient services and can therefore be used to enter new markets, connecting the health system with new patients and geographies. Often in these new markets, the downstream referrals more than support any start-up costs incurred to enter a new market. However, unlike the historical approach of capturing sick patients to "feed" the inpatient enterprise, connecting an individual to a system of care creates a lifetime relationship value and a population base attached to the specific health system's system of care. 4. Build partnerships Ambulatory investments can spur new provider partnerships. First, ambulatory services remain upstream of the inpatient services. As such, those that have the ambulatory patients can influence when and how the patient interacts with a downstream system of care. This influence over patient Sponsored by:

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