The first couple of paragraphs could be written for almost any business, but I am going to focus this article on healthcare. How do we serve an increasingly diverse market (payer reform by private and governmental payers), when the change in business relationship is so significantly different from the one we have been trained for and have worked to understand? What is one to do?

Boiling it all down, there are usually three options: 

• continue to struggle with divergent interests and needs;
• organize and structure to meet diverse needs;
• focus solely on the needs of a definable segment.

The first option is not defensible. To acknowledge the situation and its consequences but do nothing, is a failure. 

The second option is continually being used but with marginal success in most cases. This is similar to having a number of special interests. Management by those well-intentioned but time-pressed, works often, but results in low quality deliverables offered sporadically. The market and the players in it have changed to the extent that we are potentially servicing a market that doesn’t exist anymore.

The last option, focusing on the needs of a definable segment, may seem radical but is one worth a closer evaluation. 

The days of homogenous markets are gone, and they will not return at the scale that they once existed.  

Payer and consumer will not accept an inferior product once exposed to an innovation that performs better. In fact, improvements increase the appetite for additional improvement, not regression.

This is about challenging the way you think, challenging years of conventional wisdom, challenging a mindset. Making important changes in how you define your market in the future is critical for your group’s or hospital partnership’s vitality in the coming years. Chances are, the tougher your decisions today, the greater the rewards for tomorrow. 

This also holds true for clinical operations. 

Several years ago in a strategic planning session, the question of how many services an organization should offer was debated. Some on the board felt the organization was obligated to offer a large number of services. “That’s what we are supposed to do as a healing institution, aren’t we?” Others felt the organization was trying to do too much and, as a result, most of its benefits were mediocre. Finally, one member of the board asked, “What is better, a lot of average programs or a few high quality programs?” We’re not sure if he was being serious or facetious.” But it didn’t make any difference. His peers on the board could not agree on an answer. (Association Now, April 2010)

Any organization focuses on the needs of a definable segment, whether it is a physician/hospital partnership, a group of physicians consolidating practices, or small individual practices wishing to stay independent. I don’t see providers or patients giving a lot of thought to the size of the organization as much as the value they receive. 

Bill Appling, MBA, FACMPE, is president of Watkins Uiberall Health Care Consulting. He has faculty appointments at the University of Memphis in the Fogelman College of Economics and Business, where he teaches in the Masters of Health Care Administration program.

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