Work Sample #11 - Joint Ventures in Healthcare

In March, 2018, a client asked me to work with one of their subject-matter experts to promote the concept of joint-venture partnerships between providers (e.g. hospitals) and payers (e.g. insurers). I wrote the following draft.

Headline: Five imperatives for a payer-provider joint venture partnership

Subhead: Going big is not enough to guarantee your JV partnership win

Payer-provider joint venture partnerships are transforming healthcare, driving positive market change and better patient outcomes. But merely launching a joint venture is not enough to make it successful.

Sure, merging the actuarial heft of payers with the skill sets of providers represents a smart play in a price-constrained environment crying out for service differentiation. According to McKinsey & Company, provider-owned health plans are growing at a rate of six percent a year.

The excitement is real; so are risks. Can you bust out of your business silo and commit to a deep culture change? Can you be as agile as a tech-oriented start-up? Can you separate your partnership’s needs from those of a parent payer/provider?

In pursuing payer-provider JV partnership success, keep five imperatives in mind:

1.    Define and set culture early – People think of culture as warm and fuzzy. But culture is not a feeling; it’s how people walk in and out of work every day.

          The end goal of improving care and patient outcomes must be embedded in the culture early, even though it is still a start-up. A lot of times, smart healthcare JVs hire CEOs outside the health industry to help set the right culture first, especially one geared to a start-up environment.

2.    Avoid us vs. them –When you look at a JV partnership model, it isn’t one entity. You have three, two parents and the partnership.

          Culturally there is almost a tendency for each to say we are going to do it our way. It’s critical everyone plays nicely in the same sandbox. Certain strengths and capabilities can be leveraged and applied from a parent payer or provider which translate into greater, more enhanced and differentiated outcomes when going into the marketplace.

         

3.    Operate within your natural state of maturity (and don’t try to trailblaze if you can’t) – When you talk about start-ups and new ventures, a large reason they fail is by trying to do too much too fast.

          Ask yourself: Do I have the basics down first, what are my strategic objectives, and am I moving too fast that I am putting myself at risk of not reaching my six-month or 12-month strategic objectives. Operating with your natural stage of maturity, i.e. learning to crawl before you can walk, is critical for longevity in the payer-provider JV model.

4.    Prioritize operational planning as much as strategy planning –

In a payer-provider JV startup, there is a tendency to wear multiple hats. Because you wear different hats at different times, there’s a tendency to pull the reins back, and determine strategy first.

          As much as that is the right thing to do, don’t forget to prioritize the operational planning so you can designate levels of ownership, responsibility and accountability within the broader strategy, and operationalize it with the right people. That way, you can still work with structure and accountability within a start-up environment.

5.    Maintaining focus on patient/member – In payer-provider JV startups, the patient is still the target. Throughout the start-up process, always be focused on improving patient outcomes, driving more membership, and doing it in a more synergist, efficient way.

Getting these five imperatives right will help a payer-provider JV partnership set the right balance of strategic and tactical considerations to achieve true market differentiation – and greater relevance to our morphing marketplace.