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Earlier this month I was at a health system board meeting in which we were discussing the transition from volume to value, and the shift to a population health model. One board member had the courage to ask a tough question: “What if we never get there?” Covering just a small slice of a large metropolitan area, this system has consistently ranked third in market share behind two larger competitors—and now they feel they are lagging those systems in moving toward risk. The most recent challenge: a large—and until recently, loyal—independent primary care group had just been acquired by one of their competitors. Yet the system prides itself, justifiably, on delivering low-cost hospital care and outstanding quality.

I raised a heretical notion: suppose the system pursued a strategy focused solely on being the highest-performing inpatient and specialty care provider in the market, and abandoned the goal of bearing population risk? Could the system shift their focus to simply being the best “subcontractor” to other risk-bearing networks in the market?

The ensuing conversation was uncomfortable, to say the least. The notion challenged the system’s assumptions of the role they wanted to play in the market, and whether they could be a leader in population health. I encouraged them to think of being a “subcontractor” to other risk-bearing organizations not as a defeat, but as fulfillment of a vital role—healthcare in their community would be better if more hospital care were delivered at their level of cost and quality.

Our view: for many smaller systems who are driven by a desire to remain independent, becoming a high-performing care subcontractor may be the best path forward, and the most realistic. (It will be interesting to watch the successful investor-owned chains on this front—organizations whose strategic advantage lies in running highly-efficient, low-cost hospitals.) It’s not as sexy as “population health”, but as any builder will tell you, there’s no substitute for a great subcontractor.