We’ve struck a boiling point in the healthcare industry.
Decade after decade patient outcomes stay the same, but our spending increases while revenues and margins continue to fall. New models of care have failed to stick and both public and private hospital systems are struggling to strategize around an uncertain future.
Enter major tech players, among other healthcare disrupters, who all believe they are uniquely positioned to enter the complex healthcare market. If they can leverage their experience in innovation to solve some of the biggest and most pervasive problems plaguing our healthcare system, they can capture a piece of the growing $9.6 T market.
But how can health systems, payors and other stakeholders self-disrupt before the status quo is changed and the traditional model begins to fail as it has across so many other industries post-disruption?
Healthbox and other stakeholders from across the industry explored this question and the implications of the inevitable collision course we have already begun to witness. While the path ahead remains unclear, here are three major takeaways.
1. Create a Frictionless System
Simplifying administrative tasks and the transactional process should be the goals of digital transformation and these principles can be learned from industry outsiders.
Recent healthcare innovations, such as bolt-ons, have largely added to the daily workflow of clinicians, creating increasing levels of complexity and convolution that lead to burnout.
But innovation does not always have to come in the form of never-before-seen products. A viable option for innovation is to simply refine the value chain by changing the traditional business model. New business models that leverage data, automation and the reduction of transactional friction will be better suited to compete within the tech-enabled ecosystem of the near future.
2. Address Market Imperfections
With greater data transparency, interoperability and patient ownership, we can reduce market imperfections and empower the consumer. Possible opportunities in this area include:
- Interoperability and the breakdown of data silos for increased data flow with access to electronic health records for more user-friendly tools
- Patient engagement through customer relationship management tools to manage the patient experience and the delivery of care
- Data transparency for more efficient decision-making and market behavior analysis
- Artificial intelligence and machine learning as a means to further optimize care and reduce process variation
Throughout all of this, one thing remains clear: the oft overlooked patient should be at the center of our efforts.
Our current system has not been designed with patients in mind, despite currently operating in what some are calling The Age of the Customer. Across other industries we observe market share capture through consumer engagement and empowerment, and the healthcare industry should be no exception. Organizations who create strategies with this in mind will likely have success going forward.
3. Embrace the Healthcare Disruptors
Innovators, new entrants and incumbents all have a seat at the table where existing approaches can be challenged, new opportunities identified, care models redefined and incentives realigned through business model innovation.
Health systems are currently stretched beyond their limits and struggle with inadequate access to data, the lack of data interoperability and poor tracking and sharing of data; all of which can largely be solved by new entrants in a variety of ways. These disrupters are not burdened by historical baggage or orthodoxies in terms of how they approach solving problems, rather they bring a completely new set of ideas, assets and strategies with them, ultimately leading to a mutually beneficial ecosystem.
When thinking through strategies going forward with regard to competition, co-operation, and coopetition, organizations should keep these three themes top-of-mind. The existing infrastructure that health systems have developed will provide the groundwork for the ecosystem of tomorrow, but new entrants will largely dictate how this evolution occurs. Health systems and other incumbent players must look inward at their own operations and orthodoxies to determine where their core competencies lay and why certain problems have persisted.
With regard to competition, co-operation, and coopetition, it comes down to the willingness and capability of the health system to self-disrupt, and their appetite for self-determination. Partnerships provide immediate synergistic outcomes if both parties are aligned in their mission, but do not beget the agency that comes with a long term, strategic plan to outcompete, centered around the core competencies that an organization can offer.
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Healthbox, a HIMSS Innovation Company, is a healthcare innovation services firm that works with healthcare leaders who share a passion for building, harnessing and advancing solutions to empower the reinvention of healthcare.
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