Tony Chen over at Hospital Impact awhile back wrote a very thought-provoking post about emerging "unusual" competition to hospitals.

Tony is right on about taking a broad look at defining what competition means and also acknowledging that the line between competitors and collaborators, especially in healthcare is often blurred. But this does not diminish the urgency of his main point:

The problem is "what is left for hospitals?":

If insurance companies own a large part of the patient relationship, if media companies own the consumer's mindshare through their brand, if the retails get all the easy stuff, if the resorts and medical spas get all the high-end stuff, if VC money finds a model to motivate healthy living, and if this preventive medicine chain really does prevent... what's left for hospitals?

I do not have a stake in the current state of affairs in the hospital industry, so take my words with a grain of salt if you will. But let me offer "Top 3" areas which I think will remain hospitals' point of strength for as far as we can see in the future:

• Acute Care: The bottom line, this is what hospitals are all about. No competitors are capable in mounting a strong challenge here and hospitals can and should build upon it.
• Pillars of Community: A local hospital will always remain a natural "go-to place" for local community to look upto for one-stop-shop healthcare needs. That is if hospital leadership nurtures local relationships, which is harder for large chains.
• Distributorship: Yes, I made up this word. But this means hospital, leveraging its community relationships and acute care strength can build a full-service menu of trusted offerings by partnering with seeming competitors.

What is the key to this "Service Aggregator" model? Do not bite off more than you can chew. Instead focus on being a "trusted local conduit" to bring best of breed services to the communities you know better than anyone else. As Hospital Impact commenter puts it:

The point is that hospitals are downsizing and refocusing on being hospitals. Having failed as insurers, preventive health care and wellness clinics, health clubs and medical group practices, they're back to being the centers of acute care.

How could this work with every competitor Tony mentions?

1. Hotels: Improving the level of service and amenities should do it.
2. Preventive Medicine Centers: Partner with them. You have goodwill in the community, they are starting from scratch. You may have trouble matching their R&D, so partner with them.
3. Insurance Companies: Yes, they have data. But consumers trust them least of all healthcare players, as they dread those denials. Plus quality of claims data is suspect. Like politics, all healthcare is local, so leverage your strenghts.
4. Pharmas: Competition for docs is there, but the good news for hospitals is that doctor doing research is probably not seeing as many patients. And you can still start a research institute.
5. Retail Clinics: Fighting a new low-cost / high-volume model is futile. Cannibalize your low end proactively and build referral relationships. Retailers will soon hit their limits handling complex cases and will look to reduce liability.
6. Revolution Health: So far they have been more bark than bite, but disruptive innovation is coming and I bet the real players have not revealed themselves yet. Google was founded only in 1999, when Yahoo and AOL were kings.
7. Coca Cola: They may be the big brand, but their bottlers are raking it in. Few brands are that powerful to require no reinforcement from local community. Hospitals are positioned to be distributors of national brands and disruptive innovation.
8. Resorts: Quick idea - license Trump's name. But seriously, the business of resorts is entertainment and it is chasing "whim" dollars, not earmarked for healthcare. Hospitals have a lot going for them and should emphasize scientific credibility of their staff.
9. CNN & Google: True, hospitals should forget about holding a monopoly on information. But any info is worthless if we cannot corroborate it with people we trust. Hospitals can do well by fostering open and local trust networks.
10. Inertia: Tony has only 9 items, so I had to add the 10th. As Pogo said, "We have met the enemy and he is us". I think the biggest threat to hospitals is not being open to new ideas, even if this means radical changes in doing business.

The bottom line - new healthcare value chains are forming.

My advice to hospitals is to build on their strengths in acute care and community connections to assemble a full menu of services through partnering. Do not try to fight centralized R&D. Be a channel instead.

The winners will thrive, the losers will be bought or fail.