healthcare disrupted next generation business models and strategies pdf

Healthcare disrupted next generation business models and strategies pdf

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A Difference in Kind

Healthcare Disrupted. Next Generation Business Models and Strategies

Healthcare Disrupted: Next Generation Business Models and Strategies. Anne O'Riordan, Jeff Elton

Three Devastating Features

In recent years a new—disquieting—form of disruptive innovation has emerged. Instead, the innovation beats incumbents on both price and quality right from the start and quickly sweeps through every customer segment. Look at the effect that free navigation apps, preloaded on smartphones, had on the market for devices made by TomTom, Garmin, and Magellan. That makes them incredibly hard to combat. Find ways to slow the disruptive innovation down and to leverage your surviving assets in another business.

A Difference in Kind

If your institution subscribes to this resource, and you don't have a MyAccess Profile, please contact your library's reference desk for information on how to gain access to this resource from off-campus.

Please consult the latest official manual style if you have any questions regarding the format accuracy. In the cost of health care in the United States accounted for approximately 7 percent of gross domestic product. In it accounted for 16 percent of America's GDP. Normally, we view it as good news when an industry gains "share of wallet" in such a manner because it indicates that enterprises are making products or services that customers value and seek to purchase.

At one level, therefore, we ought to be treating the fact that Americans are spending more of their income on health care as good news. They value good health. They're certainly better off spending it on health than many other diversions. But at another level this news is terrifying. We note just four frightening factors. The growth in health-care spending in the United States regularly outpaces the growth of the overall economy. Over the last 35 years, while the nation's spending on all goods and services has risen at an average annual rate of 7.

Many efforts to contain overall costs have the effect of making care inaccessible on a convenient and timely basis for all of us—even for those who can pay for it. Second, if federal government spending remains a relatively constant percentage of GDP , the rising cost of Medicare within that budget will crowd out all other spending except defense within 20 years. The third factor that engenders fear is that the burden of covering the costs of health care for employees, retirees, and their families is forcing some of America's most economically important companies to become uncompetitive in world markets.

The fourth frightening factor, about which few people are aware, is that if governments were forced to report on their financial statements the liabilities they face resulting from contractual commitments to provide health care for retired employees, nearly every city and town in the United States would be bankrupt.

There is no way for them to pay for what they are obligated to pay, except by denying funding for schools, roads, and public safety, or by raising taxes to extreme levels. Health care is a terminal illness for America's governments and businesses. We are in big trouble. The rest of the world isn't far behind. Nationalized health systems such as those in Canada and the United Kingdom generally seem good at making everyday care conveniently accessible to most people.

Some appear to maintain a better balance between general and specialty care than the United States. However, budget limitations continue to result in long lines for specialty services and technologically advanced care. We look to each other for answers that nobody seems to have. Even while many Americans have begun to look to a single-payer, government-controlled health system as an answer to the crisis in the United States, some governments with nationalized systems have recently introduced competing private insurance plans that offer their citizens a wider array of choices.

And in developing countries, the notion of somehow replicating the systems of the developed world is simply unthinkable. Their only option seems to be adequate care for the rich and little for everyone else. The U. It has taught us that the economist Jean Baptiste Say was right, at least for this industry: when caregivers make more money by providing more care, supply creates its own demand.

By some estimates, a staggering 50 percent of health care consumed seems to be driven by physician and hospital supply, not patient need or demand. Those fighting for reform have few weapons for systemic change.

Most can only work on improving the cost and efficacy of their piece of the system. There are very few system architects among these forces that have the scope and power of a commanding general to reconfigure the elements of the system. Perhaps most discouraging of all, however, is that there is no credible map of the terrain ahead that reformers agree upon and trust.

They are armed with data about the past, and they have become accustomed to reaching consensus for action when the data are conclusive. But because there are no data about the future, there is no map available to convincingly show these reformers which of the pathways ahead of them lead to a dead end and which constitute a promising road to reform. And few have a sense for the interconnectedness of these pathways. As the prophet of Proverbs said, "Where there is no vision, the people perish.

So why this book? There is little dispute that we need a system that is competitive, responsive, and consumer-driven, with clear metrics of value per dollar being spent. Much of today's political dialogue on health-care reform centers on how to pay for the cost of health care in the future. This book offers the other half of the equation: how to innovate to reduce costs and improve the quality and accessibility of care. We don't simply ask how we can afford health care.

We show how to make it affordable —less costly and of better quality. Almost every day somewhere in the United States, a group of health-care reformers convenes a conference. We've attended many of these. Nearly without exception the participants talk past each other. This one focuses on the uninsured poor, that one on prescription coverage for the elderly, another on overuse of expensive diagnostics technology, and still someone else on the cost of end-of-life care.

Someone decries the perversions of fee-for-service reimbursement, while someone else bewails the failings of capitation. They talk past one another because they don't share a common language and a common understanding of the root causes of these problems.

Unable to agree on the problem, and without a language for understanding one another, they find it impossible to articulate and agree upon promising solutions. We hope this book helps these reformers understand the root causes of America's health-care malaise so they can frame solutions that stanch the problems at their source.

And we hope to give them a common language so that we understand one another and can work cooperatively. The approach we take in The Innovator's Prescription is unique. We have not studied health care to derive solutions for health care. Rather, our aim is to examine this industry through the lenses of general models of managing innovation that have emerged from 20 years of studying these problems at Harvard Business School and the Kennedy School of Government at Harvard.

These models have been insightfully applied to industries as diverse as national defense, automobiles, financial services, telecommunications, computer hardware and software, public education, and steel. They have been used to help entire national economies remain competitive and prosperous. They have helped companies innovate in industries that are heavily regulated, as well as in those that are not. We use these models in this book first to explain the root causes for why health care has become progressively expensive and inaccessible.

With the causes of these problems defined, we then draw upon these models to show how to solve them. What follows is a summary of our primary assertions, in order to give our readers a road map of sorts for this book.

The subsequent chapters then offer deeper analyses of the problems and solutions, from as many perspectives as possible. The problems facing the health-care industry actually aren't unique.

The products and services offered in nearly every industry, at their outset, are so complicated and expensive that only people with a lot of money can afford them, and only people with a lot of expertise can provide or use them.

Only the wealthy had access to telephones, photography, air travel, and automobiles in the first decades of those industries. Only the rich could own diversified portfolios of stocks and bonds, and paid handsome fees to professionals who had the expertise to buy and sell those securities.

Quality higher education was limited to the wealthy who could pay for it and the elite professors who could provide it. And more recently, mainframe computers were so expensive and complicated that only the largest corporations and universities could own them, and only highly trained experts could operate them. We will come back to this last example, below. It's the same with health care. Today, it's very expensive to receive care from highly trained professionals. Without the largesse of well-heeled employers and governments that are willing to pay for much of it, most health care would be inaccessible to most of us.

At some point, however, these industries were transformed, making their products and services so much more affordable and accessible that a much larger population of people could purchase them, and people with less training could competently provide them and use them. We have termed this agent of transformation disruptive innovation. It consists of three elements shown in Figure I. Technological enabler.

Typically, sophisticated technology whose purpose is to simplify, it routinizes the solution to problems that previously required unstructured processes of intuitive experimentation to resolve. Business model innovation.

Can profitably deliver these simplified solutions to customers in ways that make them affordable and conveniently accessible.

Value network. A commercial infrastructure whose constituent companies have consistently disruptive, mutually reinforcing economic models. In the middle of these three enablers are a host of regulatory reforms and new industry standards that facilitate or lubricate interactions among the participants in the new disruptive industry. To illustrate how these enablers of disruptive innovation can combine to transform a high-cost, expertise-intensive product into one that is much more affordable and simple, let's briefly review how it transformed digital computing.

Until the s there were only a few thousand engineers in the world who possessed the expertise required to design mainframe computers, and it took deep expertise to operate them. The business model required to make and market these machines required gross profit margins of 60 percent just to cover the inherent overhead. The personal computer disrupted this industry by making computing so affordable and accessible that hundreds of millions of people could own and use computers.

The technological enabler of this disruption was the microprocessor, which so simplified the problems of computer design and assembly that Steve Wozniak and Steve Jobs could slap together an Apple computer in a garage.

And Michael Dell could build them in his dorm room. However, by itself, the microprocessor was not sufficient. IBM, in contrast, set up an innovative business model in Florida, far from its mainframe and minicomputer business units in New York and Minnesota.

In its PC business model, IBM could make money with low margins, low overhead costs, and high unit volumes. By coupling the technological and business model enablers, IBM transformed the computing industry and much of the world with it, while DEC was swept away. And it wasn't just the makers of expensive computers that were swept away. The systems of component and software suppliers, and the sales and service channels that had sustained the mainframe and minicomputer industries, were all disrupted by a new supporting cast of companies whose economics, technologies, and competitive rhythms matched those of the personal computer makers.

An entire new value network displaced the old network. Our bodies have a limited vocabulary to draw upon when they need to express that something is wrong. The vocabulary is comprised of physical symptoms, and there aren't nearly enough symptoms to go around for all of the diseases that exist—so diseases essentially have to share symptoms.

When a disease is only diagnosed by physical symptoms, therefore, a rules-based therapy for that diagnosis is typically impossible—because the symptom is typically just an umbrella manifestation of any one of a number of distinctly different disorders.

Healthcare Disrupted. Next Generation Business Models and Strategies

A business model describes the rationale of how an organization creates, delivers, and captures value , [2] in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy. In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business , including purpose , business process , target customers , offerings, strategies, infrastructure , organizational structures , sourcing, trading practices, and operational processes and policies including culture. The literature has provided very diverse interpretations and definitions of a business model. A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity. Business models are used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore possibilities for future development.


Their book explains how critical global healthcare trends are challenging legacy strategies and business models, and examines why historical leaders in the.


Healthcare Disrupted: Next Generation Business Models and Strategies. Anne O'Riordan, Jeff Elton

Among the a lot of struggles, and obstructions that a whole new on-line company deal with is obtaining more than enough focused visitors! Now you will find thousands of content articles about ways to get much more visitors to a web site. There are two times as a lot of services which provide on line corporations with ways to advertise their web-sites.

Big-Bang Disruption

Digital transformation is the cultural, organizational and operational change of an organization, industry or ecosystem through a smart integration of digital technologies, processes and competencies across all levels and functions in a staged and strategic way also see digital transformation strategy. Digital transformation also DX or DT leverages technologies to create value and new services for various stakeholders customers in the broadest possible sense , innovate and acquire the capabilities to rapidly adapt to changing circumstances. While digital transformation is predominantly used in a business context, it also impacts other organizations such as governments, public sector agencies and organizations which are involved in tackling societal challenges such as pollution and aging populations by leveraging one or more of these existing and emerging technologies.

Three Devastating Features

If your institution subscribes to this resource, and you don't have a MyAccess Profile, please contact your library's reference desk for information on how to gain access to this resource from off-campus. Please consult the latest official manual style if you have any questions regarding the format accuracy. In the cost of health care in the United States accounted for approximately 7 percent of gross domestic product. In it accounted for 16 percent of America's GDP. Normally, we view it as good news when an industry gains "share of wallet" in such a manner because it indicates that enterprises are making products or services that customers value and seek to purchase. At one level, therefore, we ought to be treating the fact that Americans are spending more of their income on health care as good news. They value good health.

This will navigate you to Accenture. Discover how we're helping companies deliver better patient outcomes through differentiated platforms, consulting, and operations services. Accenture surveyed healthcare providers HCPs globally on how operations and needs changed during COVID and the effects for patients and pharmas. Accenture's Patient Survey sets out changes in care during coronavirus and found a major shift to virtual care. MedTech companies can take swift action to help solve for the COVID crisis with a mindset of agility and responsible innovation.

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