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Building Consumer-driven Ambulatory Businesses

In this BDC Working Paper, Dave Anderson, PhD highlights the challenges hospitals face in a consumer-driven ambulatory care market. He recommends new business strategies to improve quality, lower cost of care, and earn greater financial returns.

Health systems risk losing the early advantage they have had in the rapidly growing ambulatory health care market. They face serious competition from focused, venture-backed companies and insurers who are entering the ambulatory market at scale. There are several obstacles health systems face in their battle to continue building ambulatory care:

  • Their traditional commitment to inpatient care

  • Fundamental differences in ambulatory and inpatient markets

  • Dynamic entrepreneurship and growing access to capital by independent ambulatory providers

Succeeding in ambulatory markets will require health systems to break the chains tying their inpatient and ambulatory activities together. Key steps health systems can take are to:

  1. Reorganize ambulatory services to give them greater stature and access to resources;

  2. Enhance the ambulatory consumer experience

  3. Develop rigorous product costing and pricing models

  4. Take consumer marketing to a new level

  5. Develop a culture that supports and expects innovation

  6. Strengthen business development capabilities

The ambulatory care market has become an entrepreneurial world full of partnerships, joint ventures and alliances. In order to succeed in this market, health systems will need to recruit ambulatory leaders who are themselves entrepreneurs. While pursuing ambulatory business for its own sake could increase market fragmentation, as long as ambulatory markets are competitive, this strategy could produce improved quality, lower cost of care, and greater financial returns.

Download PDF • 4.23MB

David G. Anderson, PhD

Senior Advisor

Boston and San Francisco 925-352-9462


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