The Strategic Management of Health Care Organizations by Peter M. Ginter W. Jack Duncan Linda E. Swayne

Author:Peter M. Ginter,W. Jack Duncan,Linda E. Swayne
Language: eng
Format: epub
ISBN: 9781119349716
Publisher: John Wiley & Sons, Inc.
Published: 2017-12-15T00:00:00+00:00

Market entry and penetration strategies coupled with reconfiguring the value chain can be powerful combinations for creating new business models and effectively entering the market. For example, when an organization bypasses brick-and-mortar outlets and sells its products through a website (penetration strategy – channel of distribution), it is reconfiguring the value chain.64

ESSENTIALS FOR A STRATEGIC THINKER 6–4

What Are Health Care Platform Businesses?

One of the recent hallmarks of strategy for consumer-facing goods and services has been the rapid rise in platform businesses with their ability to dramatically outperform traditional producers. A platform business brings together supply and demand by providing a marketplace, or ecosystem, where producers and consumers can more effectively and efficiently interact. The platform does not control supply and demand, but does control the rules of exchange as well as how products or services are delivered or accessed (e.g. through a mobile phone). In contrast, traditional pipeline businesses focus on turning raw materials into products and tend to compete on factors such as cost and quality. These businesses, such as WalMart or a traditional hospital system, implement the classic value-chain model to control resources, optimize internal processes to create strategic advantage, and focus primarily on the end user as the recipient of the value created.

In a sense, platform businesses have existed for a long time; for example, commercial malls bringing together customers and retailers. Recent advances in information technology have created the ability to build a much more efficient and scalable platform. Whether it is the Apple iPhone and its app store, the “sharing economy” in the form of Airbnb or Uber, or the “on demand” economy with such platforms as NetFlix, platform businesses introduce a fundamentally different way of delivering value than traditional pipeline producers. As a result, they have the potential to significantly disrupt traditional business. For example, Uber provides a platform for ride-sharing where producers (car owners) can find consumers (people wanting rides). Uber controls how the platform is accessed (e.g. through mobile devices) as well as the rules of how rides are delivered (e.g. pricing). The speed with which Uber has changed the face of global transportation demonstrates the potential of modern platform businesses.

Health care has many features that make platform businesses an effective and efficient business model; however, it has some unique features that make the entry of platforms difficult. Factors complicating the entry of platform businesses in health care are: (a) consumers of health care are not the sole “purchaser” of their care, and b) large fixed-cost assets such as hospitals are necessary for consumption of certain services such as MRIs. Yet, there are many health care services where platforms can better deliver services.

Companies such as Pack Health, a digital coaching platform, are using these concepts to connect individuals diagnosed with chronic conditions with suppliers of appropriate services for these conditions in a scalable fashion. In many cases, individuals with chronic conditions are motivated to be members of the platform because services are often difficult to obtain and coordinate and the services are subsidized by their employer, insurer, or a drug company.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.