Providence’s Sara Vaezy Tells the Tale of Two Health Systems: Fixing Fundamentals While Focusing on Innovation

It’s a difficult time for health systems who are struggling with
financial pressures brought on by rising costs, patient volumes
that continue to remain below pre-pandemic levels, and a host of
other issues putting their balance sheets in the red. But at the
same time, the need for innovation has never been greater. New
technology will be essential to streamline operations and meet
consumer demand for new care delivery models while staying ahead
of big tech, retailers and others adding pressure for providers
to evolve and transform.

How can providers focus on getting business fundamentals back in
order, while also looking to the future and accelerating their
focus on innovation?

On this episode of Healthcare is Hard, Sara Vaezy, chief strategy
and digital officer at Providence, talked to Keith Figlioli about
the need to address both of these issues at once – and how to do
it. Some of the topics they cover include:



New economics for providers. While there may have been
an initial hope about getting through the pandemic and getting
“back to normal,” it’s now clear that the fundamental economics
of healthcare – especially for providers – will never be the
same. Sara says the industry is starting to get comfortable
with the notion that provider economics have eroded in a long
lasting way. Recognizing this fact and finding new ways to
diversify will be essential for providers to thrive.


Building beyond acute care. Health systems are being
forced to choose if they want to focus on being the center of
acute care in their communities and be part of a larger network
of services, or broaden beyond that to provide more elements of
the network themselves. Sara says not every hospital or health
system has the resources to expand on their own, but sees
Providence on a path to becoming a “health company with a care
delivery arm.” She talked about how this model could even give
providers national scale, as opposed to operating within a
geographic footprint.


The importance of partners. Innovation is essential for
every health system in one way or another, and Sara admits that
it’s hard to do on your own. Those who cannot drive meaningful
innovation themselves will be forced to consolidate or partner
with others. Those who can and have been driving innovation
will continue to do so, but Sara predicts that even they will
form more innovation consortia and financing partnerships to
focus on key areas where reach and scale will create a more
efficient cost structure for innovation. This will also create
more opportunities for entrepreneurs to work directly for or
with health systems.


The advantage of incumbents. It’s easy to be critical of
healthcare incumbents, but Sara points out how important it is
to not forget that they still deliver the vast amount of care
at scale in the U.S. This is a significant advantage that can
be amplified even more when incumbents work together. As she
says several times, it’s difficult to drive innovation and the
transformation of healthcare alone. Collaboration will be
critical.



To hear Keith and Sara talk about these topics and more, listen
to this episode of Healthcare is Hard: A Podcast for Insiders.