Background and Challenge
The U.K. healthcare landscape has experienced a number of fundamental changes in recent years. Particularly significant is the emerging need for greater integration across health and social care, reflected in the growing number of pioneering integration initiatives.
L.E.K’s client, a U.K. charity providing end of life care primarily to cancer patients, needed to evaluate its strategic choices in response to wide-reaching changes in the National Health Service (NHS) commissioning structure. The new healthcare landscape requires providers to develop increasingly innovative models for care delivery with the goal of enhancing U.K. healthcare provision and ensuring sustainability in the face of long-term financial constraint.
L.E.K. was engaged by the charity’s management team, on a pro-bono basis, to consider how it should evolve its strategy to enhance cost and operational effectiveness while continuing to deliver high quality care.
Approach and Recommendations
L.E.K. addressed three strategic areas that were key to evolving the business model over the next three years:
- Partnership Environment: With the aim of ascertaining whether third party strategic partnerships were a viable option, L.E.K. analyzed the benefits and disadvantages of partnering with organizations across the public, independent and third sectors, including how to create and maintain these partnerships.
- Business model sustainability: L.E.K. assessed the client’s current contract performance, including its strategic segmentation in order to identify cohorts of contracts with similar performance trends, strategic challenges and implications for future contract negotiations.
- Service evolution: In light of the newly integrated "health and social care" agenda, the client needed to develop a strategic response to reflect the fact that its own nurses are more highly qualified and therefore more expensive than standard domiciliary care providers.
The scope of L.E.K.’s work also included market research on the client’s standing, reputation and effectiveness in the market.
Following extensive primary and secondary research, L.E.K. made a number of interesting findings:
Although the charity was recognized by commissioners as an important and highly valued provider of end-of-care life, its proposition was not sufficiently articulated, making it difficult for commissioners to procure its services. L.E.K. recommended the charity to increase its capacity and reliability, as well as define and present its value proposition more clearly to increase awareness within commissioning bodies.
The sustainability of the charity’s existing business model has been increasingly challenged as costs of nursing and hospice care have risen faster than public and private funding streams. Smaller contracts in particular posed a number of challenges. L.E.K. hypothesized that the charity’s contracts could be segmented to allow for tailored strategies that improve long-term sustainability of the business model. In particular, the client’s own hospices were, in some cases, well placed to act as central co-ordinators in a "hub and spoke" model for end of life care, supporting performance improvement.
A detailed analysis of potential third party partnerships showed that partnering with carefully selected third parties could offer benefits to both sides by creating strategic value and enhancing the market position of both parties.
L.E.K.’s final and overarching recommendation to the client was to pursue a clear goal to become the leader in end of life care where having a unified focus would provide the catalyst for driving a sustainable model and building a solid strategic foundation for the future.
The scope of insight and market research delivered by L.E.K. allowed the client to develop a clear understanding of the changing end of life care commissioning landscape, as well as their overall strategic position and reputation. L.E.K. recommended several strategies which could dramatically improve the charity’s national presence and contract performance. Since completion of the strategic review, the client has implemented a number of L.E.K’s recommendations and is now starting to realize the benefits.