Rethinking Business Models and Models of Care

I recently attended two conferences. First was the National Council for Community Behavioral Healthcare in Texas and second was the National Information Management Conference and Expo (sponsored by CIMH) in California. Both conferences leveraged what is happening in terms of healthcare reform and parity to focus on one very important agenda: the urgent need to re-tool business models and re-think models of care.

I like to think of business models and models of care as “cousins” in the behavioral health field. There are differences but they boil down to understanding:

• who do we serve
• how do we serve them
• how are our services financed or funded
• by whom (which agency or payer)
• for what greater purpose
• in what context
• with which suppliers and partners
• requiring what kinds of resources (including staff)
• what kinds of core processes must be deployed with relative ease
• measured on what basis for quality and outcome
• how it is profitable
• how it is sustainable
• how it is that I am competitive if not superior
• what the vision for the long-term is

Our willingness to explore what we are doing today in the context of a rapidly transforming market is crucial. We must be open to the idea that our business models and models of care will require revision and improvement sooner rather than later. The question is HOW?

Assessing Models of Care and Revising Business Models

While in Texas, I met with the executive of a very large provider organization who was deeply concerned about the costs associated with a quality assurance program within her organization and wanted to focus resources, instead, on revenue management.  In California, her business partner related how wonderfully his QA program is performing and worried how out-of-alignment his partner was with his vision for growth. Both of these fine people serve as example of what happens when well-meaning, highly intelligent and driven people try to solve a problem they are implicitly involved in. Thank goodness they had the good sense to ask for help.

When a business interest (for-profit or otherwise) wants to change, they need to admit that their lives have become unmanageable and ask for outside guidance. We would expect as much from our consumers. In this economy, my friends, we all need outside guidance and support.

You can ask for help from a mentor or from a consultant. Some people seek assistance from the Small Business Administration’s SCORE (service corps of retired executives) while others will tap their association. In any case, the idea is to admit you need help and get an unbiased, third party, objective perspective. My recommendation: make sure your guide knows your business and make sure they have had success. The mark of a true guide is one who has been “there” before.

Beware the theorists who write swell books and only sound as though they know the forest. Do your due diligence.

Make sure your guide is using an assessment tool that measures your condition based on industry standards. I see people measuring aspects of their  business that are quite interesting though effectively useless. You need to be able to look back, certainly, and tell yourselves how you got to this point and evaluate your current organizational health. More importantly, you need to be able to look forward, imagine and predict what the future might hold and anticipate what will be required of you to succeed. While there are no crystal balls, there are dozens of solid standards and indicators you ought to be using to envision your future business model.

Further, regardless of the model you choose to explore, there are some fundamentals you need to address:

1. Planning
2. Development
3. Implementation
4. Evaluation

There are many questions that need to be answered:

1. Has the model been defined elsewhere? Has it been attempted before and where was it successful?
2. What current and anticipated policies support it?
3. How can it be funded in order for it to be sustainable? What is the financial model?
4. Can you articulate the goals of the model you have in mind? What is gained in the process and what value does it add?
5. How are consumer needs met and what are the outcomes measures?
6. What does your local market research tell you about supporting a business of this kind? Is the demand adequate to ensure your profitability?
7. What are the infrastructure requirements?
8. What kinds of systems and technology will be required?
9. What subject matter expertise do you have in place and what do you lack?
10. How long will it take to implement and train existing staff?
11. What kinds of alliances and partnerships will be required to get a “running start”?
12. Are the services efficient in and of themselves and do they lead to efficiency in the system of care?
13. What is your customer value proposition? How would you sell this service to your local payers  and purchasers?

There are many more intriguing questions to explore but you quickly get the idea: this is an important and urgent exercise. Failure to respond to changing market conditions with a deliberate and comprehensive business solution will lead to painful consequences. Making the decision to invest in new business models and models of care will produce an ROI . When conditions around us are changing and reforming, we’re wise to change and reform along with them.