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Originally published marzo 25, 2008
Once upon a time, there was a chain of department stores that was losing money. The CEO wanted to know if any department was making a profit. No, every department was losing money. So, the CEO wanted to know which department was losing the least amount of money. It was toys. The company changed its name and poured all of its money into that one department. Toys"R"Us was born. And, with it, the category killer business model was born.
Healthcare organizations are moving in much the same direction – that is, toward specialization along service lines. This specialization makes business sense in many situations. The organization can deepen its expertise as well as its brand. Focus is the key to becoming the first stop for customers, for employees, for investors and for the industry.
There are numerous examples of specialty care organizations. Pharmacies are one of the oldest forms of specialized healthcare enterprises. Optical services are another. Medical specialties, usually along the lines of specific disease conditions such as diabetes care, heart care, orthopedic services and pulmonary care, or, specific, definable services such as birthing centers, sports medicine and vaccination programs, constitute other forms of specialty care. These types of specialties are not only operating independently, but becoming contracted segments of larger organizations. The birthing center in your local hospital, for instance, could be staffed and run by an organization headquartered across the country (or in another country).
There are constraints on healthcare organizations that don’t exist for other types of businesses. Hospitals and other providers, for instance, have a public service aspect to them that prevents them from dropping business segments just because they are unprofitable; whereas retailers can target new customer segments, close locations and open new ones, and sell off product lines if the money is not there.
Nevertheless, the trend over the last few decades has been toward specialization in healthcare services. Once these organizations have worked out the legal and regulatory issues involved, the question of how to make money, develop a sustainable brand, build a growing customer base, deliver a high degree of clinical and service quality, and reduce medical and business risk becomes paramount.
Business intelligence can be a powerful tool in achieving all of these business goals. The key is to define and prioritize the right business intelligence applications for the size, structure and types of products and services provided by the specialty organization.
Let’s take a look at an example – nephropathy or kidney care. Kidney care involves a large number of products, services and activities delivered through stand-alone centers, individual practices and inside hospitals and medical centers. Examples of products and services include:
As you can see, there are a number of business models at work across these product and service lines. For instance, there are professional services to be scheduled and conducted. There are physicians, nurse practitioners, nurses and other staff to be hired, managed and developed. Instructional materials need to be produced and distributed. Formularies, clinical guidelines, quality measures, and diet and exercise protocols must be developed and maintained.
In addition, there are the physical components of the business to acquire, manage and evaluate for continued return on investment. For example, there are owned and leased facilities to manage; equipment to buy, rent, distribute, maintain and periodically retire; and supplies to inventory, sell and distribute.
There is nothing simple or boring about this one type of specialty business. It has operations that are similar in many respects to doctors’ offices, surgery centers, pharmacies, retail stores, online shopping sites, schools, insurance companies, research facilities, wholesale distributors and manufacturers.
With this broad range of business models comes a broad range of business intelligence needs. For instance:
These are just a few of the many types of analytical applications needed to succeed in the specialty healthcare industry segment. As the industry continues to move toward contracted services, the competition will heat up and this capability will become not only the way to succeed, but also the way to survive.
Thanks for reading!
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