The CFA Perspective

Cardiovascular Development Strategy -- New Principles in the Value-Based Environment (Part 1)

Posted by John Meyer, FACHE

6/8/16 6:00 AM


Cardiovasular_Development_Strategy_-_Part_1.jpgAn important Perspective article was published in the New England Journal of Medicine by Michael Porter and Dr. Thomas Lee entitled, “Why Strategy Matters Now.(1)  Their premise was reprised in a recent Hospital & Health Networks article as “Six Essential Questions for Developing a Value-Based Strategy.”(2)  Its implications are important and profound. This two-part series explores the cardiovascular services ramifications of these implications.

I have read Dr. Porter’s work on strategy for many years and have always found him to be amongst the best in his field.  The premise of the Perspective article, that “Until recently, most healthcare organizations could get by without a real strategy, as most businesses understand that term,” rings true for me.  They go on to state that, “they didn’t need to worry about how to be different or make painful decisions about what not to do.  As long as patients came in the door, they did fine, since fee-for-service contracts covered their costs and a little more.”  As they rightly conclude, “That era is ending.”  The cause of the “end of the era” is quite clear:  the shift away from fee-for-service to payment for value (and, as they stress, payment for value not on a hospital level, but on an individual service by service level).  It is on this level where cardiovascular (CV) service line implications become most clear.

Their conclusions and the resulting strategic questions they propose in the article are valuable guides to thinking about the future direction of all healthcare facilities and the increasingly important issue of setting both appropriate corporate strategy and business unit-level strategy.  As CFA are cardiovascular consultants, we thought it would be useful to take Porter and Lee’s six essential strategic questions and consider them within a Cardiovascular Service Line perspective, with examples that would be most relevant to the CV service line administrator.  Overall corporate strategy must be set at the highest level within the enterprise, as it will apply to all corporate activity and thus, all clinical service lines.  The CV service line must function within this overall strategy, adhere to its tenets and support the direction with its own business unit strategy, business development, marketing plans and related implementation activities.

The table below reiterates Porter and Lee’s six essential strategic questions, and then briefly states why they feel each question is important.  CFA has taken the author’s third column and customized it from “Examples” to “Cardiovascular Service Examples.”


Setting strategy and successfully implementing it demands that leaders make hard choices.  Fundamental change is challenging, but the current trend towards value creation is real and here for the long term.  The Cardiovascular Service Line is such an important business unit of any hospital’s clinical portfolio and reflective of its overall brand that it demands its own strategy as a component of overall corporate strategy.  

As Porter and Lee conclude in their article:  “In the emerging competitive marketplace, only organizations that truly understand strategy will thrive.”

In Part 2, we will further explore the six questions as they pertain to cardiovascular development strategy in the value-based environment.

As always, CFA welcomes your comments, suggestions and questions.

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  1. Michael Porter, PhD, and Thomas Lee, MD.  “Why Strategy Matters Now,” New England Journal of Medicine, April 30, 2015.
  2. “Executive Corner:  Six Essential Questions for Developing a Value-Based Strategy,” Michael Porter, PhD, and Thomas Lee, MD, Hospitals and Health Networks, May 2016.