Four Functions in an Organization

Organizations in any industry leverage four primary functions to remain competitive. 1. Development: designing and building new, products, services, and experiences, 2. Demand Generation: marketing and selling those products services and experiences, 3. Delivery: a reliable and repeatable system for bringing those products, services, and experiences to customers, and 4. Support: central functions that optimize the efficiency of the first 3 such as IT, HR, finance, or strategy development.

Care Models are the center of every health system

In traditional markets, customers play three roles in the value transaction. They make purchasing decisions, they pay for products or services, and they are the primary beneficiary of value. In healthcare, these three roles are divided across different stakeholders. Aside from patients choosing which health plan to sign up for and which primary care provider to select, “purchasing decisions” (treatment, testing, and procedure decisions) are made by licensed providers in accordance with federal and state regulations. The fees for the “purchases” that providers make are paid for by insurers, and ultimately, it is then the patient who is the primary beneficiary of the value that is delivered through those purchases. The vehicles of the delivery function that drive this unique healthcare value transaction are Care Models—systems designed within licensure regulations that generate revenue from payer organizations and deliver value to a population, group, or patient cohort as they progress through the stages of a condition, injury, event, or life.

The need for Development in Healthcare Delivery

Traditionally, and as the name suggests, healthcare delivery systems devote nearly all organizational resources to the delivery function—directly delivering value to patients by utilizing established care models. However, survival is optional in business and with disruption now happening at high speed in healthcare many hospitals and clinics that continue to deliver care the way it has always been delivered are at risk. Development of new care models and new services is needed more than ever, but this is where many healthcare systems fall short because they have no established development function. Instead, ad-hoc teams of clinicians and leaders are pieced together from the delivery function and expected to radically redesign systems while still entrenched in daily operations. These efforts rarely yield the breakthrough results that leaders are looking for, and usually lead to frustration and burnout in the teams who struggle to balance an unreasonable array of responsibilities. Building a dedicated development function for reliable and repeatable care model design provides a solution to these issues, and will help healthcare delivery organizations ensure long-term viability in an uncertain future market.