Health care alliances require balance, clear goals

In our previous post, we discussed how health care alliances are becoming more prevalent as the industry evolves. There are tremendous benefits to forming alliances, but health care leaders need some solid skills and strategies to make them work.

There are a number of challenges in making a health care alliance work. First, each alliance member likely has its own strategic priorities. One alliance disbanded 18 months after forming because, in part, members didn’t act collaboratively, relative to industry changes. “There’s so much going on and it’s very difficult for one organization to make all the changes that we need to make. And trying to do all that in concert … it’s very challenging,” said one alliance executive.

Regulatory requirements also present potential roadblocks to alliances. In particular, the Federal Trade Commission may allow alliances only if members can show benefits of clinical coordination — improved care and reduced waste.

Alliance members must also abandon the notion of “bigger is better,” as value-based care may lead to lower admissions, less utilization and shorter hospital stays.

There are a few key steps alliances may want to consider to improve success in today’s environment:

  • Set explicit goals and measure performance. Each member must agree, not only to the goals and objectives, but also to how each member contributes to achieving them. Tracking results — and regularly reporting — them brings transparency to how each member is doing and where improvements need to be made.
  • Think population health management. As population needs and payment requirements shift, alliances should focus more on delivering value to patients through coordinated efforts and less on financial benefits to the organizations involved.
  • Consider offering all members equal representation. Successful alliances have given each alliance member the same voting rights, regardless of size.

Health systems are seeing the benefits of forming alliances, especially with the growing need for population health management. Alliances can be tremendously successful if managed and maintained for the good of all involved. For a complete rundown of the health care alliances trend, download the latest Optum Trend Watch.

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