The vision for this blog is to create a community of harmonious professionals across the care continuum who encourage each other in exploring digital media as a way to support businesses and families dealing with elder care.
Written on July 7th, 2010 by tasha
How to make your competition irrelevant. Sounds too good to be true, no? But Blue Ocean Strategy is a concept developed by two leading French business school professors after studying 150 years worth of strategic business moves of successful companies. Rich Chesney, of Healthcare Market Resources just gave a thought provoking webinar on this subject as session 2 of a marketing series sponsored by Hospice Resources Online.
Blue Ocean Strategy is not a panacea, but it is a technique worth knowing about.
Any business will find it a useful tool for brainstorming innovative ways to expand its revenue base.
The concept of Blue Ocean is simple:
Make your competition irrelevant by creating a new demand, a blue ocean of opportunity, where you are the only expert provider.
What does this mean in real terms? Well, the most successful businesses over time are those that did not try to compete in a crowded marketplace, but took off, instead, by applying their skills in a new way. As the Blue Ocean website suggests:
“Quit benchmarking yourself against your competition. It will only lead you to look like them.”
These successful innovators looked for communities with un-met needs and applied creative solutions in a way that allowed them to own the market, with very little competition.
An easy retail analogy is iTunes. It used to be that if you wanted a particular song, you had to buy the whole CD. You paid for 15 songs you didn’t want in order to listen to the one song you did. A college student created Napster as a way for music lovers to get around this by sharing individual songs across the Internet. Ingenious as it was, it was also, unfortunately, a breach of copyright law and Napster had to fold as it did not appropriately reward the musical recording artists for their creative work. Apple recognized the unmet need and found a legal way to address it. They created an online store that licensed the music from the artists (paying them royalties) while allowing for affordable, individual song downloads. Voila iTunes.
What does this have to do with elder care, you might ask? Well, creativity lies in the intersection of applying a concept from one world into the processes of another.
Frequently a market is saturated and there is little room to come in as a generalist. Where you can come in, however, is in creating a new program to address an under-served niche. How can you identify an under-served niche? If you’re a gifted data guy, like Rich, you actually look at the proportion of a given type of patient or client in your community and then look at the proportion served by your industry.
An example Rich gave of the way Blue Ocean Strategy has been applied to hospice in the past is to see how many for-profits recognized that nursing home residents were under-represented in their patient mix and so developed specific programs targeting that niche. When they began, it was a blue ocean opportunity.
Whether you are a hospice or a geriatric care manager, the same principles apply:
Think about those communities or situations that could benefit from your services but where you serve less-than-the-proportion that are present in your area. For instance, are you proportionally serving populations in your community:
You cannot serve these communities by doing business as usual. This is the risky part. They are often under-represented because business as usual does not fit their needs, or is not cost-effective relative to their perceived needs. But creative thinkers can look at a situation, throw out pre-conceptions and come up with new models of care that can be cost-effective AND meet a need.
Maybe the unmet need is a provider’s problem with penalties or lengths of stay that threaten the financial viability of working with a population group. In this context, Rich brought up a blue ocean idea for hospice that was brilliant. And the thinking could be applied to other elder care providers as well.
Hospitals are in the awkward position of getting paid a fixed amount of money for specific disease conditions. Pretend, for Condition A, they figure on an average stay of 3 days. But if a patient stays longer, the hospital is losing money. Rich, being a hospice/home health guy, suggested analyzing with the hospital, how many of those longer stay patients go on to die in the next several months. These folks are clearly hospice-bound, or could be soon. Why not point out the problem to the hospital and develop some special protocols for that disease condition that would facilitate the hospital releasing the patient into your palliative care program? This is an example of creating a blue ocean opportunity by finding an unmet provider need and generating a financially viable, win:win solution. You become the lone expert for an un-recognized need, and with your creative approach, you have made your competition irrelevant. You own the niche. (And as Rich points out, it’s easier for a provider to give a new company an unexpected referral than it is to give them a referral they would ordinarily give to their existing hospice partner.)
Now let’s look at a non-hospice example. I am thinking right now of Eric Coleman’s Care Transitions Intervention. With one home visit and three follow-up phone calls in a 30 day period post hospitalization, his Transition Coaches were able to significantly reduce hospital readmissions not just for 30 days, but for 6 months following the intervention. The program had 4 simple components:
In a year’s time, they calculated their intervention would have yielded re-admission savings of nearly $300,000. An ounce of prevention is worth a pound of cure.
After listening to Rich’s webinar, it makes me wonder about other opportunities. How can we as elder care professionals turn our creative thinking to new models of care addressing profitable situations that have not been in focus before?
Pneumonia, heart attack and CHF are now being targeted by Medicare for tracking 30-day readmissions. (A hospital’s re-admission rate now appears on the national Hospital Compare website as part of a quality metric for the public.) What pearls from research can inform us to try a new program or approach tailored to these situations? They don’t have to be overly large or wildly expensive. Look at the Care Transitions Intervention.
With the future holding the likelihood of accountable care organizations and bundled payments across several providers, change is in the offing. It behooves us to think creatively about how to collaborate across the continuum. I believe there’s a blue ocean available working with hospitals to leverage net savings yielded through the avoidance of re-admission penalties. Imagine saving them money AND improving patient/family outcomes. What a concept!
By the way, I’ll be in Boston August 5-7 for the NHPCO conference on developing care across the continuum. If you are planning to attend, be sure to stop by my booth (#3) to say hi. And come to my session on the 7th on how to safely use the Internet to collaborate.
