AHA calls on hospitals, health systems to compete with ‘disruptors’

Group says mergers are a way for providers to become more competitive with highly capitalized tech giants.

With technology giants such as Amazon, Apple and Google entering the healthcare market, America’s hospitals are feeling the heat from these consumer-focused companies—which they see as competitors.

“We are seeing historic—if not unprecedented—change across the entire healthcare landscape,” Rick Pollack, president and CEO of the American Hospital Association, told an AHA forum in Washington on Wednesday. “There’s no doubt that more engaged consumers, advances in technology and new entrants add up to a dramatically changed healthcare landscape.”

Pollack noted that new entrants into the healthcare sector, such as Amazon, Apple and Google, are poised to serve as “disruptors” in the industry.

“Many of them are highly capitalized technology companies,” observed Pollack. “Some of them are traditional companies that are also highly capitalized, like CVS or Optum, that are expanding their role in the delivery of healthcare services—and they’re often competing directly with hospitals.”

Also See: Amazon set to play role of technology disruptor in healthcare

“Unlike new and expanding players in healthcare, we take care of everyone that walks through our doors,” Pollack declared. “And unlike other players in healthcare, we’re open 24/7.”

Writing in a blog earlier this month, AHA’s General Counsel Melinda Hatton charged that these new entrants into the field include “well-known corporate behemoths who have little or no track record in the healthcare space, are equipped with nearly unlimited capital to disrupt the marketplace but ultimately will not be offering services or improving care to those with limited means or who are uninsured.”

Hatton observed that tech giants such as Amazon, Apple and Google “have made it clear they intend to expand their reach in the lives of consumers to include healthcare” with the aim of fundamentally disrupting “how, where and to whom healthcare is delivered.”

Pollack told Wednesday’s AHA forum that one of the most significant market forces that is driving innovation and transforming healthcare is that “patients and their families simply want care that is more convenient—they want it when and where they want it—and, they are becoming much more engaged in directing their own care.”

As a result, an increasing number of hospitals and health systems are merging and entering new relationships to enable them to “compete more equally with highly capitalized corporate giants that often lack roots in, or obligations to, the communities they propose to serve,” according to Hatton.

For hospitals and health systems to compete, Pollack insisted that the industry needs to change and transform to meet the evolving needs of patients and communities.

“Hospitals and health systems are committed to transforming to meet the evolving needs of all their patients and communities,” Hatton added. “The shift to a healthcare system that rewards value over volume is fundamentally transforming the patient care landscape. It has prompted hospitals and health systems to rethink and redesign how they deliver care to the communities they serve, identifying ways to maximize their resources and expand capabilities to ensure the patient experience is the best it can be.”

According to Hatton, mergers are “one logical way to support that transformation and reap its promise of greater convenience, quality, access and innovation.”

Hospitals and health systems are “turning to mergers to fuel innovation and create greater value,” Pollack concluded. At the same time, he noted that “some people have questioned our field’s motivations as it relates to mergers and acquisitions—and, the fact is that these dynamics are in response to being able to effectively compete with these new entrants that are entering the market.”

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