Strategic Alliances

Choose your partners wisely

By T. Kent Rowe

We’ve all heard the adages. Two heads are better than one, there is no “I” in team, it takes a village, and so on. So in today’s business climate of strategic alliances, it’s fair to ask the question, “When is it better to join forces than to go it alone?”

Driving Alliances in Health Care

Regardless of what one thinks about Uber, it is hard to ignore the impact the business model has had on the way we view supply and demand, and the power of aligning capacity. And at the end of the day, it is alignment of capacity that is really at the core of what drives alliances in health care, leveraging shared resources, expertise, and experience to fortify the viability of the individual health care organizations in their respective communities. In theory, working collaboratively, sharing best practices, improving quality and reducing costs through economies of scale, alliance members can jointly tackle the challenges each must face while remaining independent and autonomous.

We all strive to provide higher quality care, improve more lives, or show profitable growth for our employers. Oftentimes though, expanding our own suite of skills or kingdom is not always the best way to do so. As a result, strategic alliances surface in our discussions as a viable approach to improving the health care ecosystem, yet these alliances come with their own set of risks and challenges. It requires setting aside individual and corporate bias for the greater good. And then, executing.

Check Your Bias at the Door

Several years ago, I had the good fortune of sitting on a 33-member panel of health care executives led by former Speaker of the House Newt Gingrich and former Senator Tom Daschle as part of Speaker Gingrich’s Center for Health Transformation initiatives. We met in Washington, D.C., on four occasions, with projects assigned between each session. Our charter was to think creatively about major challenges facing health care at the time: declining reimbursement, end of life costs and solutions, interoperability and technology, etc. Leaders from each sector of health care—payers, providers, specialties, post-acute, employers, and IT vendors—provided representation.

When Speaker Gingrich kicked off the meetings, we were all asked to do one thing that proved immeasurably difficult. We were asked to check our biases at the door, and to think bigger than the companies we represented in the room. GE, Kaiser, WellStar, Sutter, Cancer Centers of America, etc., we were all asked to take off our individual corporate hats and think big. Looking back, I believe we did a remarkable job in providing blueprints that closely match the evolution of some of the transformation initiatives we see today (quality of care and bundled payment initiatives, for example).

But this was a simplified academic exercise. It’s one thing to make it through an academic exercise with strange bedfellows, quite another to execute on major health care transformation in our own communities where relationships are based on loose community alignments, and in some cases with former or existing competitors! Add to the mix separate governance structures, differing financial goals, cultural differences, varying information technology (IT) approaches and priorities, and it is amazing that we are finally seeing the needle move. But we are—and in large part due to successful strategic alliances and alignment of capacity.

Alliances and the Future of Health Care

These are no longer theoretical discussions about what may happen in the future of health care; these alliances are happening now, in real time, at record pace, and they are changing the landscape of care delivery. Just as Uber doesn’t go out and buy vehicles and hire drivers in every market they wish to serve, opting instead to leverage existing excess capacity, so too are health organizations electing to collaborate in providing and coordinating care, versus building from scratch a massive infrastructure that in many cases already exists.

Take Away

Strategic alliances make sense. Not in all cases, but in many cases. Who we align with and why we align become critical elements to evaluate, and ultimately success or failure lies in execution. But with health organizations’ willingness to check their biases at the door, put the patient first, focus on higher quality outcomes and lower costs as the improved state, we can all play a role in the pendulum swing to sustainable, quality health care!

T. Kent Rowe is the chief executive officer at Clinicient in Portland, Oregon. He can be reached at krowe@clinicient.com.