Build vs. Buy: Addressing Health Care Questions in Your Value Proposition

Over the last several years there has been a drive toward the integration of health care and social services, including long-term services and supports, to better meet the holistic needs of older adults, people with disabilities and their family caregivers. This integration has been catalyzed by new payment models and health care delivery system reforms promoted by the federal government and states that focus on value, safety and systemic quality improvement rather than volume.

With the support of The John A. Hartford Foundation, the U.S. Administration for Community Living, The SCAN Foundation and other funders, the National Association of Area Agencies on Aging’s Aging and Disability Business Institute (Business Institute) is strengthening community-based organizations (CBOs) and enabling them to effectively contract with health care payers and providers, integrating their services and supporting people as they live in the community where they prefer to be. It is very possible that health care entities, however, may decide to build their own social services program rather than partnering with established programs in the community.

For health care entities, many factors go into the build-versus-buy decision. For some, it may seem easier to “build” their own social service programs. For others, the capital, time and coordination required to develop and launch new programs may not fit their business strategy. In some instances, health systems have built their own programs only to then recognized the value that CBOs can add. When this occurs many of these health systems revert to relying on the expertise and deep community relationships of CBOs. Understanding the motivations of health systems will allow CBOs to better contribute to their shared goals.

To learn more about the factors that drive the decisions health care entities make when deciding to build a service or buy it from a CBO, the Business Institute conducted a survey and held interviews with 24 health systems. The results provide insights that can help your CBO better address the build-versus-buy conundrum and make a compelling case to encourage health systems to buy services from your CBO rather than build the services themselves.

Drivers

What are the drivers affecting a health care entity’s decision to build a service or buy it from a CBO? Health systems interviewed by the Business Institute pointed to many drivers, but there were three recurring themes: clinical drivers, alignment with business strategy and/or mission and costs. Consequently, when seeking to build a relationship with a health care entity, CBOs should consider how their value proposition addresses these drivers.

Clinical drivers

  • Does your proposed service address an area of need or concern? The most common priorities to address in terms of patients’ social determinants of health needs cited by those surveyed were falls prevention, transportation and social isolation. Care transitions, compliance with discharge instructions and, in the wake of the COVID-19 pandemic, access to telehealth services, are also important clinical drivers. Make sure to include in your CBO’s value proposition and in subsequent conversations with health care entities information on how your CBO’s intervention addresses these clinical concerns—and include the data and client stories you have to back that up.

 Alignment with business strategy and/or mission

  • Determine how your CBO and its services are aligned with the health care entity’s business strategy or mission. Research and discuss their goals and priorities early on to help inform your conversations. It is best to understand a potential partner’s goals prior to sharing your value proposition. You are pitching yourself as a long-term business and clinical partner, not just a one-time vendor. As a partner, your CBO would be an extension of their business, assisting with the goal of providing quality services in the community by contributing your knowledge, expertise and resources.

Cost

  • Finally, when it comes to cost, consider whether your CBO can estimate how much it would cost a potential health care partner to develop the service themselves. What savings would they realize by contracting with your organization instead? What would be the return on their investment?

Barriers

Every partnership, especially a new one, faces challenges. But you can better market your value when you understand the major pain points that a prospective partner is concerned about and articulate how your CBO services can help address those challenges. The health systems surveyed by the Business Institute identified workflow integration, quality assurance concerns and cost as the three barriers that most influenced their likelihood of building a service themselves over buying it from a CBO. How can your CBO address those potential barriers early on? What mitigation procedures can you employ to address other challenges as they arise? How will your CBO work with your partner to address these challenges?

Leadership

You might have a strong value proposition, but if your CBO isn’t talking with the right people at your target partner, your partnership isn’t going to get off the ground. In your conversations be sure to engage the correct leadership. The most common decisionmakers regarding contracting within the health care systems interviewed include the Chief Executive Officer, the Chief Financial Officer and the Director of Care Management. Many respondents also reported that multiple internal stakeholders are involved in this decision-making process.

Addressing the build-versus-buy question is a challenge, but it creates an important opportunity for partnership development, which may require long-term relationship building. This Business Institute investigation of health systems demonstrates that health care entities are very interested in partnering with CBOs, and in many instances want to buy rather than build but are not always ready. Building the evidence base for services and becoming strong story tellers are two great ways CBOs can prepare for these conversations.

Age-Friendly Health Systems Movement

 The Age-Friendly Health Systems (AHFS) movement—an initiative of The John A. Hartford Foundation and the Institute for Healthcare Improvement (IHI) in partnership with the American Hospital Association and the Catholic Health Association of the United States (CHA)—pushes health systems to adopt evidence-based models and practices that deliver better care to older adults across multiple settings. CBOs are well positioned to support this effort by partnering and contracting with health care entities, allowing health systems to buy the services that address the specific needs of older adults and people with disabilities. The unique position of CBOs in their communities enables them to competently address the drivers and barriers that impact a health system’s decision whether to build or buy services.

Identified AFHS sites might be more easily convinced to buy from and partner with CBOs that are already age-friendly. Understanding the 4M’s framework (what matters, medication, mentation and mobility) of AFHS identified hospitals, nursing homes and clinics can assist in aligning shared goals of providing age-friendly care and lead to innovative partnerships within communities.

“The Business Institute has helped grow national awareness of the importance of social services to the health and well-being of older adults and the advantages to health system goals,” says Jane Carmody, Program Officer at The John A. Hartford Foundation. “The Business Institute’s particular strength, helping CBOs access health systems and payers, is a critical component to realizing the goals of Age-Friendly Care.”

Aging and Disability Business Institute Resources

If your CBO is looking for resources on building its value proposition, take a look at a few publications from the Business Institute:

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