Are Hospitals Losing Ground to Pharmacy Chains?

Hospitals are not innovating as quickly as their emerging competitors: Tech companies marketing wellness gadgets and pharmacy chains opening walk-in clinics. What does the industry need to do to stay in the game? That’s the question being posed by researchers at the Society of Healthcare Strategy and Market Development (SHSMD). The society’s Executive Director, Diane Weber, and board president Mark Parrington offer a sneak peek at the American Hospital Association’s 2014 Leadership Summit in San Diego.


Parrington: The interviews with folks from Intel and Walgreens suggested that the health care industry, or the hospital industry more specifically, does not innovate as quickly, does not think as fast as those that are starting to become our competitors.

Announcer: Asking questions, seeking perspectives, searching for answers. Algorithms for Innovation presents Impossible Problems in Academic Medicine.

Jolley: Welcome to The Scope Health Sciences Radio. This is Dennis Jolley with the University of Utah Health Care. I'm here talking with Diane Weber. Diane is the Executive Director for the Society of Healthcare Strategy and Market Development, and Mark Parrington, who is the President of the board of SHSMD.

Diane, let's start with you. How is SHSMD evolving to help your membership respond to the challenges of health care reform?

Weber: SHSMD has always had an important role in looking at the future of health care through various products and thought leadership type of activities for its members. But more recently we've been focused on making sure that we do innovative research to really delve into that topic further. Last year, for example, we looked at the competencies of our health care professionals in the strategy arenas and and asked them as part of that process what do they think is going to be even more important the future, and we publish those results.

But this year we're doing something even more innovative. In fact, we pulled in a firm to help us with that innovative process to use some design thinking principles to really address what are some great opportunities that we can learn from in order to position organizations for the future.

Jolley: Mark, what do you think some of the biggest challenges the membership of SHSMD face in the current market?

Parrington: There are a couple of examples that were discussed this week here at the conference. In fact, interviews with folks from intel and Walgreens suggested that the health care industry or the hospital industry more specifically does not innovate as quickly, does not think as fast as those that are starting to become our competitors. We need to prepare our members to be as agile in their thinking, as innovative in their thinking as they possibly can.

We recognize that not everybody sits at the C suite table and we don't want to put our members in a position of begging to be at the C suite table. We want them to earn that right by being able to be much more effective within their organizations, bring that value to their organizations, and then be recognized for the successes that they do bring. That's going to cause them to think differently.

A number of people in the research that Diane has referenced are from outside the industry. Taking a look at how they think about marketing and communications and strategy development within their various industries and see if we can apply that to the thinking processes of our members.

Jolley: Can you talk a little bit more about that process, and maybe just a couple of the things that you see coming down the line for your membership?

Weber: So, the process involved an interesting methodology. It started with actually a good in-depth discussion with our board, so a facilitated discussion talking about the future of health care. And we arrived at the core question of how can we as health care strategists really bring more value to the organizations we serve given all the changes in the health care environment.

So we embarked on that question by learning, first of all, from some experts and an impressive number of organizations across the country in health care and those that are outside of health care. And we learned some interesting things about how others, in particular outside of health care, address strategy and how they innovate and develop far more quickly than healthcare does.

So we then formulated a series of questions that would then build out a full day event where we brought in strategic thinkers, again, from all over the country, primarily now in the health care field, to get them to think outside of the box and this is where our innovation consultants came in very handy. So this full day facilitation session was a great think tank opportunity and now we're synthesizing those comments and those lessons learned into some some great tactics and strategies for them to consider in their roles in the future, things that will help them move more quickly in order to change and adjust and respond and to be effective change agents within their organizations.

Parrington: We've gone a bit further then that. So we've taken the initial research results and taken that information and asked people who haven't been involved in the project to date, "What do you think? Are we on the right track? What have we missed? What would you add to the thinking?" We'll do that a couple of more times with each of the disciplines. Then the intent is to present that research at SHSMD's annual conference in October in this very hotel here in San Diego.

Weber: They will be a couple of sessions dedicated to conveying the information just, first of all, to share the information. We're also bringing in some of those outside industries to share some best practices and what worked well for them. Beyond that, we do plan on building out our educational programming and our knowledge sharing for the long term so that we can help members position themselves and build skills and competencies in these areas.

Parrington: I think there's another aspect to it that we've just begun to to start to think about. So we don't know if it'll work or not but in the process of re-imagining the professions, does that suggest that the curriculums that most of our members go through in college, undergraduate or graduate work needs to be changed? Maybe a little. Maybe a lot, who knows. But we've got the ability through AHA and other organizations to reach out to the universities. A lot of our members are adjunct faculty and they take that aspect, that relationship, and use it to begin to change from the beginning what our members are learning and how they can apply that in a new environment.

Very, very few of our members of ever had to do direct to customer marketing. Today they're going to have to, or agile strategy plan.

Jolley: You fail fast and move on.

Parrington: Right. And be comfortable in failing, and that's key. Most of us are risk averse or our organizations are risk averse.

Jolley: Health care is risk averse.

Parrington: It is. Probably because we deal with people's lives. Well, marketers and planners and communicators really aren't dealing with people's lives. So we could afford to be a bit more risk tolerant if we could learn to live from those experiences as well.

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By: Kirsten Stewart

Kirsten Stewart is a Senior Writer for University of Utah Health Sciences.