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The Rx VBHC Series: SESSION 1 | THE LEADER | CEO's Goals . The Pharmacy's Hedgehog Concept . The Core Stakeholder Team


The Rx Value-Based Healthcare Series: SESSION 1 | THE LEADER | CEO's Goals . The Pharmacy Hedgehog Concept . The Core Stakeholder Team



THE LEADER: Dr. Sam, the Director of Pharmacy


In the introduction to the Rx VBHC (Prescription for Value-Based Health Care) Series, I introduced you to the Smith Family and their challenges, as well as the challenges that millions of people experience with the current healthcare system. These insights motivated me to embark on a journey to help find a prescription strategy and solution that would contribute and be meaningful to millions like the Smiths. 

Now let me introduce you to Dr. Sam, the Director of Pharmacy of a major healthcare delivery system. He was one of the first leaders to adopt the prescription strategy to contribute to his organization’s quest to transform and create a value-based healthcare system. Why did he choose this strategy and how did he successfully implement it? 

Below is Session 1 of the 10-Part Rx VBHC Series that describes why and how he selected this prescription strategy based on his CEO’s goals, the pharmacy’s hedgehog concept, and the core stakeholder team.




In this value-based healthcare era, governments, insurers, and healthcare organizations are under increasing pressure to address the various healthcare challenges such as inconsistent quality of care across the continuum of care, unsustainable rising costs of care, and lower reimbursements from payers for services. They also know that to thrive in this new era, they must accomplish the following:

  • Optimize patient health outcomes and the cost to deliver the care

  • Improve the quality of care across the continuum

  • Reduce total healthcare costs

  • Improve the health of the communities

  • Maximize operational effectiveness

  • Improve the organizational performance

Dr. Sam’s organization was no different.


1.  Two of the CEO’s goals in the quest to transform and create a value-based healthcare system

The vision of the CEO and the senior leadership team in Dr. Sam’s organization was to transform their organization into a value-based healthcare system that would successfully address the above challenges and bring value to all – patients, team members, providers, community, and the leaders. Two of their primary goals in this quest were:

  • For their Medicare Advantage business: A 5.4.3 organizational goal to be accomplished over a three-year period: 5 stars in Medicare Stars and Hospital Stars programs, 4 stars in member care experience (CAHPS measures), and a 3% profit margin.

  • For their Network Providers: Value-based contracts would represent 75% of their total medical spend with emphasis on shared savings programs, shared risk arrangements, and population-based payment models over the same three-year period.

This was a huge undertaking because their baseline numbers at the time were 3 stars in the Medicare Stars program, 2 stars in the Hospital Stars program, 2 stars in the CAHPS measures, 0.5% profit margin, and only 30% of their network’s value-based contracts emphasized these alternative payment models.


2. Pharmacy’s Hedgehog Concept

With the CEO’s goals and the organization’s strategic plan in hand, Dr. Sam worked with his team to understand their new healthcare environment and what pharmacy could do to contribute to the CEO’s goals in the quest to creating a value-based healthcare system. 

The resultant strategy selected by the pharmacy team and their stakeholders would have to flow from deep understanding of the intersection of three circles: 1) what pharmacy is deeply passionate about, 2) what pharmacy could be the best in the world at, and 3) what would best drive their economic or resource engine. The intersection of these three questions is called the hedgehog concept. Jim Collins, the author of “Good to Great” describes the hedgehog concept as a simple, crystalline concept that flows from a deep understanding about the intersection of the three circles above.

Dr. Sam and his team knew that the way forward would be where all three answers intersect - the "sweet spot" for the pharmacy’s resultant strategy.  Dr. Sam also knew that their success would come about from a series of good decisions made consistently with their resultant strategy (based on their hedgehog concept), supremely well executed, accumulating one upon another, over a period of time.


3. Selection of the Pharmacy's Hedgehog Strategy to contribute to the organization's goals

In 2015, Dr. Sam had a strategic retreat with his leadership team, key stakeholders from different departments, and selected pharmacy staff teams to learn about the new healthcare landscape and the new organizational goals, renew their commitment to the organization’s mission and vision, and participate in the Pharmacy Department’s SWOT (strengths, weaknesses, opportunities, and threats) analysis relative to the new healthcare environment. Also, during this off-site, the teams reviewed and discussed a number of pharmacy strategies and initiatives that resulted from the pharmacy’s focus on their hedgehog work. 

Subsequently, over a few brainstorming sessions, the key stakeholders and teams selected one strategy – The Medication A.R.E.A.S. Bundle prescription (MAB Rx) Strategy as the main strategy for the Pharmacy Department to focus on and implement because it had the highest chance of maximizing the three hedgehog questions:

  • What pharmacy is deeply passionate about: Positively contributing to the mission, core priorities, and strategic direction of the organization and creating healthcare value for patients – optimize patient healthcare outcomes, improve the patient experience, and reduce overall costs.

  • What pharmacy could be the best in the world at: Optimizing Medication Therapy Management for all patients across the continuum of care in all practice settings.

  • What would best drive their economic or resource engine: Contributing to optimizing the new payment bonuses, and minimize the penalties under the new alternative payment model goals; aligning and positively impacting current and new quality and value measures critical for organizational performance and success; reducing total healthcare costs and contributing to transforming the care delivery model; and demonstrating a significant return on investment and a relatively high implementation feasibility.

4.      Building a coalition of Core Stakeholders

Next, Dr. Sam and his team put together a MAB Rx Strategic Document with the support of key stakeholders, staff members, and patients that would be presented at various forums and leadership meetings to get senior leadership sponsorship and organization-wide support. This group of people (key stakeholders, staff members, and patients) became the core stakeholder team responsible for working interdependently with pharmacy and across the organization to guide, communicate, and support the implementation of the strategy.


In Session 2 of this 10-Part Series, we will discuss the following in detail:

  • The Details of Medication A.R.E.A.S. Bundle Prescription (MAB Rx)

  • An introduction to the critical elements surrounding the MAB Rx to create the MAB Rx Strategy

  • The MAB Rx Strategic Driver Diagram created by pharmacy and the core stakeholder team to create clarity, direction, and focus for all

More information about the MAB Rx Strategy can be found at:



My hope and goal is to provide you with a prescription strategy that will make a difference in the lives of patients with multiple chronic conditions – the most frequent and expensive users of healthcare, contribute to making healthcare value a reality for all, and give you a competitive advantage in this new era of value-based healthcare!

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