"Building shared assets, like the centralized ICU command center mentioned in Atul Gawande's article in The New Yorker, requires substantial capital expenditures. These shared assets have high upfront costs, but also have the promise of boosting profitability in the future. It is impossible to change processes or culture on a dime and some investments will take time to fully implement."
Because Steward is focusing on value, Powell says, it can only deliver on that promise by efficiently delivering care at a lower price than its competitors.
"This market positioning limits Steward's ability to improve its profitability by raising prices, and instead requires it to work on reducing costs and increasing volume. Neither of these changes can happen overnight," he says.
As Steward Health Care is still in the early stages of its development, Coakley is prudent in her assertion that it is too soon to draw any conclusions about Steward's future financial performance.