When All Else Fails: Transformational Strategies to Put Not-for-Profit Healthcare on a Sustainable Path.

Abstract

Summary: Changes in underlying cost structure, intensifying competition for nonacute healthcare services, heightened costs of capital, and lower investment returns have put many health systems on an unsustainable path forward. Traditional performance improvement efforts remain important but cannot fully remedy the underlying causes that have disrupted operational and financial performance. Health systems must consider a fundamental transformation of their business model. Transformation requires a disciplined assessment of the health system's current portfolio of businesses, services, and markets. The goal of transformative change is to concentrate efforts and resources on ways that can sustain the organization's long-term relevance while supporting its mission. Decisions resulting from this assessment will define new opportunities to optimize lines of business, identify partnerships to fulfill mission, and free up resources for areas where the organization can truly excel.