4 healthcare system growth archetypes

Archetype in a nutshell

Healthcare systems in survival mode do not grow. They try to stave off decline. They are likely to have negative operating margins, limited non-operating investments and negligible cash reserves.

What this archetype looks like on the pitch

Healthcare systems in survival mode were likely in financial difficulty before the pandemic. Declining volumes, labor market shocks and commodity price spikes have worsened their financial situation. Many of these systems rely heavily on federal emergency funding to sustain their finances. And when these programs end, hospitals in survival mode will face several tough choices.

In terms of operations, hospitals in survival mode will likely reduce the number of FTEs (mostly on the non-clinical side), review all capital expenditures, and close departments.

The number one issue with Night Watch for Survivalist Mode is staffing, especially nurses. Because hospitals in this group lack cash reserves to pay for premium labor, they struggle to staff essential hospital functions. This creates a vicious cycle in which they lack the staff to operate, which reduces their income. This in turn hampers their ability to pay competitive wages, leading to understaffed units.

The capital investment for hospitals in this growth archetype was likely modest before the pandemic. All of these health systems are now reassessing their capital priorities, which will likely take them even further. Our survey results indicate growth through referrals and maximizing productivity instead of acquiring business from complementary suppliers.

What This Archetype Should Do To Succeed

  • Network health: Maximizing hospital referrals is essential. This requires that all system access points (including emergency, referring physicians, contract management, and direct-to-consumer) be optimized. This is a step-by-step plan, and it requires continuous effort and vigilance.
  • Productivity: Along with network integrity, reduced length of stay and nurse productivity help reduce pressure on margins and ensure hospitals capture all available volume. Advancing leave planning and unit workflow as a team can produce clear feedback here.
  • Differentiated employee value proposition: Productive hospital operations are impossible without staff. Given the competition for healthcare talent and the cash limitations of healthcare systems in survival mode, consider focusing on the non-monetary aspects of your employee value proposition: flexibility, individualized career progression and recognition of non-monetary performance.
  • Rationalization of services based on principles: Financial pressures may force health systems in this category to close services. Proactively evaluating service lines with an eye to why they may be underperforming before closing them can reduce unforced errors.

What others can do to be a better partner of this archetype

  • Burnout Mitigation and Energy Management: Survey data shows that clinical staff in acute care settings are most at risk of burnout. Strategies, tools and approaches to help staff stay resilient will be welcomed by health systems in this group.
  • Reassignment/outsourcing of tasks: Since many healthcare systems of this archetype are understaffed, any resources or technologies that offload tasks or make decisions faster are valuable.
  • Savings/efficiency: Vendors or partners that provide immediate, realized savings will be in high demand by healthcare systems in survival mode.