Why Partnering with your Competitors is Good for Healthcare

They say that politics breeds strange bedfellows, but many organizations find themselves having to work with their competitors whether or not politics are involved. Next Sunday’s Super Bowl in San Francisco is a great example of this; when a large-scale event comes to town, all parties often work together to make the community look good and successfully pull off an event of the magnitude of the Big Game. Normally competitors who benefit from cooperation is called co-opetition.  This is the phenomena of partnering with your competitors to better serve the population in your community and have all organizations thrive. For healthcare providers, taking co-opetition beyond a one-time event allows you to leverage your competitor so that it can improve your market position and capabilities to compete, while at the same time still allowing your organization to succeed and grow in the market.

This is old hat in other industries, but is relatively new in healthcare. There are quite a few examples outside of the healthcare industry that we can look to for inspiration. Tesla, for example, is investing in the infrastructure for electric vehicles through its Supercharger network. Competitor vehicles can use the Supercharger stations too, and Tesla recognizes the need to power the developing the market for electric vehicles, even if it means cooperating with competitors in the marketplace. They are taking a risk (a smart one) that their investment that will further position them as the leader and drive market share. According to HBR.org, another great example is LinkedIn, which works with, and competes against, headhunters to bring the best talent into a network.

For healthcare providers, competitors often cooperate to service the impact on the community in several ways like trauma and burn centers. But as we move forward, with a greater focus on outcomes and cost reduction, hospitals and physician leaders are looking more at what they should do, and what services they should provide and what services they should not?

One idea is to work with your competitor for certain types of procedures or cases that require higher volume for better outcomes, while still competing for patients and market share. One of the drivers of the current system is fee for service which promotes every institution as having a competitive service lines. However, as you move to value-based care, co-opetition becomes a solution that pools higher volume to achieve better outcomes. Higher volume leads to better outcomes and lower cost; if you’re outcomes based, you’re putting yourself at a disadvantage to provide a service that’s low volume. No outcomes, no incomes.

Specialty care centers and access points/urgent care centers are another area where co-opetition could prove beneficial. These are important needs, but aren’t necessarily differentiators. Having redundant access points leads to duplication not differentiation. Often, resources can be pooled and can produce better results for all parties involved.

As the healthcare industry continues to transition from fee for service to payments for outcomes, co-opetition starts to make more and more sense for providers. How can this phenomena be applied more often? How can you partner with your competitors to better serve populations in your community?

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