Across the country, many community hospitals are evolving into regional referral centers. However, the plans for doing so often ignore the core implications of becoming a regional referral center and, instead, describe it in terms of volumes, which are out of an organization’s control.
While volumes and long-term growth are obviously important, successful organizations will focus efforts on the areas they can control: competitive strategy, physicians and staff partnerships, operations and infrastructure, governance and management structures and payor relationships.
Two Types of Factors
Regional referral centers are different from community hospitals on many fronts. Based on our study of hospitals across the country, these differentiating factors fall into two categories.
- Incremental Factors: Largely outside of immediate administrative control; often seen as requirements to move from community to regional referral center. These include scale, service area, scope of programs and growth.
- Nonincremental Factors: Largely within immediate administrative control to influence the transition from community to regional referral center. These factors include competitive strategy, physician and staff partnerships, operations and infrastructure and governance and payor.
Many community hospitals transitioning to regional referral centers place too much emphasis on the incremental factors. Instead, the focus should be on the nonincremental factors, which they can influence.
Each nonincremental factor evolves along a continuum. As a community hospital moves toward becoming a regional referral center, these factors shift as summarized here.
- Competitive Strategy: Shifts toward an expertise-based platform as compared to an access platform. Regional referral centers must develop distinctive expertise over that of the community hospitals to justify patients bypassing local care options.
- Physician and Staff Partnerships: Increases prioritization of relationships needed to develop expertise. Regional referral centers must effectively prioritize relationships with select core programs, including how physicians should be engaged by hospital leadership.
- Operations and Infrastructure: Increases the level of complexity in the organization. Regional referral centers shift toward subspecialized models of care (e.g., technical teams, nursing units, technology) to accommodate higher-acuity patient volumes.
- Governance and Management: Changing focus at the board level. Governance for regional referral centers becomes more about leadership (not operational management), more about regional issues (less about local community issues) and more about differentiation (in outcomes, processes, expertise).
- Payor: Increases collaboration between payors and providers. Regional referral centers focus more on the impacts of chronic care management, medical homes and other nonfixed asset mediums of care in an effort to improve the care for the region.
Evaluating an organization’s position along these five competencies under their control provides a roadmap for how to align and balance resources to achieve a regional referral center vision.
There are many organizations that claim to be regional referral centers and more that have stated plans to become regional referral centers. The reality is that an organization cannot transition overnight. While certain elements, such as size and resources, constrain many organizations, leadership teams can and must develop these five competencies to successfully move toward regional status.
23 August 2010