Patients at the Center

Reprint with permission from the April 2014 issue of Trustee magazine, vol. 67, no. 4. © 2014 by Health Forum Inc. All rights reserved. Permission granted for digital use only.

By Casey Nolan

There was a time not that long ago when railroads were the preeminent and dominant mode of transportation in this country. Railroad executives and boards enjoyed great stature and financial success while the golden age of rail lasted for decades. But in the tradition of creative destruction and disruptive innovation, along came cars, trucks and airplanes. Railroad executives initially dismissed these innovations as interesting developments that did not represent a major threat to their business.

What they and their boards failed to recognize was that they weren’t in the railroad business — they were in the transportation business. The fall and decline of the railroad business was dramatic and prolonged, characterized by dozens of bankruptcies, scores of mergers and thousands of lost jobs. Amid the chaos of the rollout of the Affordable Care Act website and the resulting cacophony of criticism, it can be hard to remember that health care is in the middle of its biggest transformation in more than a century.

This transformation, which has been gathering momentum for the last three decades, will change not only how health care is financed, but also how it is organized and delivered. And, to be successful in the transformed landscape, health care organizations and their boards must apply the lesson the railroads didn’t learn in the transformation of the transportation industry: They must recognize that they are no longer in the hospital business — they are in the care coordination business. Further, health care leadership teams must recognize that the critical success factors in the care coordination business will be fundamentally different from those of the hospital business, as will the key performance metrics and measures of success.

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