Healthcare Business Survival Depends on Managing Uncertainty

Philip Betbeze, for HealthLeaders Media , June 22, 2012

"If this comes unglued, you'll have mass uncertainty, the insurance plans will focus on the only real issue, which is costs, and they will come at the hospital on bundled payments: Fast, furious, expanded, and the hospitals are going to be on their heels unless they have prepared a good response," says Keckley.

This concept of managed uncertainty is not new to most businesses, but healthcare's current business model requires big capital bets around clinical innovation coupled with a regulated revenue environment that's very short-term focused. Uncertainty plays havoc with those bets.

It's time to plot how you'll respond to various scenarios.

"I have eight different scenarios I'm running with different inputs," Keckley says, with variables including what's likely to happen if the mandate goes away to what happens if exchanges are operating or not, he says.

"What you want is board members and managers to understand the inputs into those scenarios, and then to make some educated bets on what's likely, but not place the bet yet."

So when should you place those bets, if uncertainty continues to rule the healthcare strategy discussion?

If anything has been made clear over the past several years of wrangling over healthcare costs and quality, it's that you can't expect Congress or the courts to solve the problem for you.

"I heard (former HHS secretary) Mike Leavitt say we have entered into an era of dispassionate healthcare, where it's about business and survival, it's not about loyalty or reputation," Keckley says. "And I think he's spot-on. That's where we've gone."

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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