Prioritizing scenario planning in health care has been saved
Prioritizing scenario planning in health care
How plans and providers can plan dynamically for the future
In light of the evolving COVID-19 pandemic, there are several key uncertainties looming for the health care industry. Learn how health care leaders can use scenario planning to delve deeply into the uncertainties that may affect their business, better understand the range of potential futures, and proactively plan their response.
Preparing for unpredictability
The massively disruptive spread of COVID-19 (novel coronavirus) across the global stage exposed numerous vulnerabilities in health care systems, supply chains, workforce dynamics, data access, and systems connectivity. At its onset, few could have predicted COVID-19’s quick acceleration to pandemic status—and how it would test public and private health sectors’ ability to respond. However, clinical, financial, and operational learnings have accumulated during the outbreak that can help health care providers and health plans prepare for unpredictable challenges to come. For example:
- How will our nation reckon with health care’s increasingly large share of gross domestic product (GDP), which is projected to rise from 17.9 percent in 2016 to 19.7 percent by 2026?
- How might the number of uninsured individuals change over time, especially considering potential political shifts? Currently, the Congressional Budget Office (CBO) expects the United States’ number of nonelderly uninsured will increase by 5 million over the next 10 years, from 30 million in 2019 to 35 million in 2029.
- How dramatically may the health care industry—like others before it—be disrupted by nontraditional entrants large and small?
- Will virtual care finally begin to dominate the care delivery space as often predicted, particularly given the recent focus on telemedicine (the remote delivery of health care services and information using telecommunications technology) as an effective prevention and treatment solution during the COVID-19 pandemic?
Forewarned is forearmed: The prospect of a future filled with unpredictable events should compel health care leaders to use scenario planning to delve deeply into the uncertainties that may affect their business, better understand the range of potential futures, and proactively plan their response.
This article looks at four critical uncertainties facing the future health care industry and explores the implications and strategic questions that organizations must address to survive and thrive. This is not a pandemic preparation article; rather, our goal is to help health care leaders think strategically about how to prepare for unpredictability. In a post–COVID-19 world, scenario planning is more important than ever. The uncertainties explored in this piece can help jump-start that process.
The value of scenario planning in health care
Scenario planning is designed to help organizations develop and test strategic choices for multiple potential futures to build out contingent strategies. Scenario planning is not sensitivity analysis; rather, it pushes participants to consider “what-ifs” that may be unlikely—but certainly would be disruptive—and to challenge status quo thinking to prepare their organization for potential incidents or circumstances.
Also, scenario planning is not meant to predict the most probable future, but to help leaders develop and test strategic choices under a variety of plausible futures, which strengthens the organization’s ability to recognize, adapt to, and take advantage of changes in the industry over time. By considering a broad set of possible divergent futures, organizations can also mitigate risk by gaining a more comprehensive view of potential problems.
Visualizing how an organization might operate in each scenario—what will be different; what will remain the same—will enable leaders to understand implications and options for strategic choices, invest in no-regret moves that maximize potential across a range of possible futures, and collect data to identify when course correction may be needed.
Four critical uncertainties facing the health care industry
Looking to the future
The emergence and rapid escalation of the COVID-19 pandemic starkly demonstrate how unpredictable events call for new and sometimes unconventional or nonlinear approaches to strategy—ones that use scenario planning to assist health care provider and health plan leaders in answering tough questions that can direct strategic investment choices:
- Do we have enough scale?
- Are we appropriately diversified in terms of scope?
- Do we have the right technology in place and planned for development?
- Do we have the right talent?
- Do we have the right partnerships or alliances to enable our future-state vision?
While continuing disruption in health care is inevitable, scenario planning can help providers and plans prepare for whatever tomorrow may bring. By challenging the status quo, performing multiple cycles of adversarial analysis, and changing the strategy culture, health care leaders can future-proof their organization for uncertainty and position it to survive and thrive.
Download the full report to learn more about planning for the future of health care.