What every healthcare manager should ask before hopping on the integration bandwagon

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Jun 19, 2018

It’s rare to read past a healthcare headline these days without encountering the word “integration” in some phrase or other, from vertical or horizontal integration; to clinical, economic or data integration. And the word’s ubiquity makes sense. Everything about U.S. healthcare is complex, from the problems it’s required to solve and the fragmented “system” through which care is funded and delivered, to the regulations intended to promote care quality, cost effectiveness and access. Thus, it’s intuitive that industry managers pursuing ambitious goals would strive to get people, processes and resources working in alignment toward them.

Our research of innovation in other industries also speaks to the power of integration. Specifically, we’ve found that when a product isn’t yet good enough to address the needs of a particular customer segment, firms must integrate—which in this context means, control the entire product design and production process—in order to improve it.

This is necessary because unpredictable and complex interdependencies exist between components of a “not-good-enough” product. They’re not like jigsaw puzzle pieces, designed to fit together in obvious ways so that anyone can join them up, even without knowing the picture they’re constructing. Hence the managers who own each component must collaborate closely to align their respective designs so that they fit and work together in a way that optimizes overall product performance. IBM employed such an integrated strategy to improve performance of its early mainframe computers, which enabled the firm to dominate the early computer industry when mainframes weren’t yet meeting customer needs.

For all its bright spots, the U.S. healthcare system is not good enough in terms of care quality, cost, accessibility and equity. So healthcare innovators’ faith in integration is not misplaced. But as anyone who’s attempted it knows, successful integration can be excruciatingly difficult to achieve—due, in part, to the very complexity and fragmentation it’s meant to address.

In researching the topic over the last several years, I have come to suspect that another, more subtle factor also plays a role in reducing the odds of successful integration in healthcare: the lack of common, precise definitions for the many types of integration managers can pursue, and particularly, the outcomes to which they lead. Where these are lacking, how can managers possibly determine, not to mention align on, the appropriate type of integration to achieve a strategic goal?

The fact is that language matters, certainly in the process of business model innovation, even in day-to-day industry discourse. If we aren’t precise about what we’re trying to achieve, we can’t achieve it. So realizing the benefits of integration must entail changing the way we think and talk about it. 

Management scholars have long sought to clarify the concept of integration in healthcare, constructing a number of frameworks to describe the phenomenon. These often categorize integration according to common, observable characteristics (such as the processes or resources being integrated), and can prove valuable in helping managers identify and design for the types of integration that best serve their strategies.

The evolution of frameworks for integration in healthcare suggests that many of their developers are especially focused on categorizing integration ever more completely and precisely. For instance, one of the most recent and, in my mind, compelling – a conceptual model of integration types – not only categorizes various types of integration, but also offers hypotheses about the complex relationships between them.

There’s great value in honing the conceptual tools managers use to make strategic decisions, so this work should continue. In the future I also hope to see more work on categorization of outcomes for the various types of integration in healthcare. Given that potential outcomes are the first consideration in any strategy, managers need to assess their nature and magnitude, interdependencies, degree of predictability, and more, in the process of determining the type of integration to pursue. A framework for integration with an insightful categorization of outcomes can help them do that.

What, then, is an insightful categorization of healthcare integration outcomes? Ultimately, that depends on the type of integration under consideration, and how the categorization stands up to empirical testing. But drawing on our research of innovation in healthcare and other industries, I suggest that it’s one possessing one or more of the following characteristics:

  1. Describes outcomes in terms of net, strategic impact, such as financial sustainability–not just intermediate tactical impact, like cost savings. Doing so could prompt managers to consider not only the nature, but also the magnitude of integration’s impact—both of which are critical inputs into investment trade-off decisions.
  2. Captures both clinical and business outcomes, to encourage examination of causal relationships between them that may be overlooked when considering such outcomes separately. For instance, improvements in population health (clinical outcome) could create competitive advantage (business outcome). Understanding whether and how they do is necessary for designing integration to yield those interdependent benefits.
  3. Includes important outcomes that may be hard to quantify. Social welfare, education, sense of community and purpose—we know these and many other non-medical factors affect whole-person health. But the interdependencies between health determinants can make it challenging to neatly identify the health outcomes of some integration initiatives, such as a partnership between a provider system and community organization to address patients’ unmet social needs. Nonetheless, where the possibility for these hard-to-quantify outcomes exists, they should be an explicit part of managers’ decisions about integration, and thus explicitly addressed in an outcomes categorization.

Integration is tough. And as the discussion above indicates, categorization of integration types and outcomes isn’t easy, either. The ideas I’ve offered here are simply intended to stimulate thinking and discussion in the quest for more fruitful planning and implementation of integration in healthcare. I also hope they’ll inspire managers encountering the word “integration” to ask, “What do we really mean when we say that?” And, “Are we sure we’re all expecting the same results?” Rigor in language prompts rigor in thinking, and that can only be an advantage in complex undertakings such as integration.

This post originally appeared on the Harvard Macy Community Blog on June 12, 2018 and is republished here with permission.  

As Senior Research Fellow for the Christensen Institute, Rebecca’s research focuses on business model innovation in healthcare delivery, including new approaches to population health management and person-centered care.