Issue link: https://beckershealthcare.uberflip.com/i/772947
5 Publisher's Letter: 2017 Healthcare System Strategy – Welch's Law; The Reevaluation of the ACA and More By Scott Becker, Publisher of Becker's Healthcare It has been a fascinating year and we are looking forward to 2017. A few of the fascinating issues are as follows: 1. Welch's Law — dominant or market essential, lean or spe- cial — hospitals, health systems, physician practices and surgery centers. ere is a "law" that I will call "Welch's Law." Jack Welch famously said of GE — we need to be first or second in a mar- ket or not compete in that market. While this concept may have been waterdowned over the years, recognition of its importance seems to be making a dramatic comeback. In technology, in phone systems, in elec- tronic retail and e-commerce, it has never been more true than today that being first or second gives you a dramatic advantage in profitability and revenues. In healthcare, this rings quite true. In my own view, you ultimately have three core choices to be successful in business, whether as a healthcare system, practice or surgery center. First, a system, practice or company should aim to be "dominant" and/ or needed in your market. Anti-trust lawyers have moved this concept of "dominant" to the word choice "market essential." Whatever you want to call it, for offering services to patients, payers or recruiting talent, it seems to pay to be dominant. roughout the country, we see scattered chains that don't do very well. In contrast, those same chains in markets where they are "market essential" earn disproportionate profits com- pared to their other markets. Second, you can be super lean. is has oen been the recipe for busi- ness in its later days where it is trying to reap cash or for a practice that is trying to hold on through retirement and so forth. It has also been a long-term method of profitability for some practices, surgery centers and hospitals. At the same time, given the cost of operations today, it has become more difficult to be "so lean" that this itself can be a busi- ness strategy. Further, the market doesn't seem to pay you for being so lean. Lean is important. However, as an absolute core market strategy, we think it is secondary to being dominant or market essential. ird — and this is very difficult — a system, surgery center or practice can be so uniquely excellent in something that it has a special market posi- tion and can continue to make money off of that type of position. Howev- er, as information and best practices become shared so quickly, it is harder to have such a unique advantage of being so great in something that there is no one else to visit for it. It also takes great resources and discipline to maintain and improve this position. us, you end up much more in a situation where you aim to be dominant and rationally lean. 2. The election, the ACA and more. is was a fascinating election. is is a nonpartisan comment. Whether a Republican or a Democrat, it has substantial consequences. One of the more interesting issues is that it causes a reevaluation of the ACA. ere have been many observations made about the ACA. In simple terms, it provided insurance coverage to 866-948-7673 • nationalASCbilling.com WE MEASURE OUR SUCCESS BY YOUR FINANCIAL RESULTS THE ASC REVENUE CYCLE. It's all we do. It's all we think about. And it shows. REVENUE CYCLE MANAGEMENT | MANAGED CARE CONTRACTING | CODING | BUSINESS ANALYTICS | CONSULTING 2 0 1 5 Highest Rated CEOs 2015 REQUEST A REVENUE CYCLE ASSESSMENT