A revolution in collaboration models is fundamentally changing the business of healthcare. In an effort to lower costs and expand access—and maybe to avoid antitrust laws—partnerships between seemingly unlikely and even unrelated organizations are becoming the norm. This is certainly true for big, for-profit players in the game (think Aetna and CVS; Cigna and Express Scripts; Humana and Walmart; or even Berkshire Hathaway, JPMorgan Chase, and Amazon). Is it also true in the public health world, where issues with costs and access can prevent care delivery to those who may need it most?
What Is “Public Health”?
Definitions of “public health” vary. Generally speaking, these healthcare organizations are nontraditional (not multispecialty provider groups or hospital systems), safety-net (providers of last resort serving vulnerable populations), tax-exempt (not for profit) healthcare entities that may also have:
- A highly focused area of specialization—for example, Planned Parenthood, whose scope of services is limited to reproductive healthcare.
- A small service area—for example, Central City Concern, which focuses on patients in Portland, Oregon.
Other common characteristics of public health organizations are an overreliance on a small number of funding sources—many state public health organizations fit this description—and an overarching leadership strategy that focuses first and foremost on the mission or the staff.
Measuring Impact: How Big Is Public Health?
Because definitions of public health vary, and because public health programs often are blends of federal, state, and local initiatives, it is difficult to estimate the size of the public health sector, although one way to measure it is spending. World Health Organization (WHO) data suggests that the public health expenditure in the US was roughly 45% to 48% of the total health outlay between 1995 and 2014. Presumably, the WHO numbers include Medicare spending, but even omitting Medicare—which is estimated to account for 20% of all healthcare spending—public health represents a large chunk of the national healthcare market.
Current innovation in the industry demonstrates that healthcare institutions with divergent business models and areas of focus can successfully collaborate, and it can be to their mutual benefit to do so. While the recent examples we have of new partnership models exclusively feature national healthcare concerns, there is evidence that these models also work for smaller companies and companies of dissimilar sizes. Consider Kaiser Permanente’s relationship with Easterseals Bay Area (ESBA). Kaiser is a national ambulatory and inpatient provider and insurer. ESBA—a mission-driven and highly specialized organization—treats children who have been diagnosed with autism in the San Francisco Bay Area. Through this highly successful collaboration, Kaiser has been able to fill a critical service gap, and ESBA has been able to significantly improve and expand its operations.
An Untapped Market
Healthcare generally lags other industries with respect to innovation, and public health models lag traditional healthcare models in this same regard. Although the public health sector is largely untouched by evolving collaboration models, there is some evidence that the upheaval we are seeing across the industry is indeed bridging the private-public gap; for example, changes in joint operating agreements are making it possible for for-profit firms to partner with tax-exempt organizations. This means that there is a large, previously unconsidered sector of the healthcare industry that stands to benefit from reduced costs, increased efficiencies, and improved patient care by working in redefined partnership models.