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Intro to a New Series

  “We need to make care linkages a core competency of American health care.” 
George Halvorson, Chairman and CEO, Kaiser Foundation Health Plan, Kaiser Foundation Hospital

 

There’s a double meaning to the title of this new series: Healthcare Crosses the Chasm to the Network Economy

At the level of technology, it’s a reference to Geoffrey Moore’s bestselling business/technology book — “Crossing the Chasm”. The Chasm here is the huge gap between early adopters of technology and mainstream users. The book describes the process of bringing specific technologies into mainstream usage.

At the level of clinical care, its a reference to the landmark 2001 report by the Institute of Medicine — “Crossing the Chasm”.  Here, the Chasm is a reference to the quality/safety gap existing in American healthcare, with major systemic recommendations for how to cross the chasm toward clinical improvement.

In this series, the “Crossing the Chasm” is a reference to both technology and clinical care — and to the interdependence between them. I believe we’re entering a new era in healthcare, marked by passage of the HITECH Act Federal stimulus legislation, but of which HITECH is only the beginning . While to a casual observer HITECH Act might seem focused on electronic health records (EHRs), it goes far beyond that.   

Over the past several years, I’ve had the privilege to work with many leading-edge clients who understand that health IT interoperability, networks, and platform/application technologies and business models will reshape health care over the coming years.  This has given me a chance to do a deep dive into understanding companies, business models and literature from outside health care, and then thinking through implications for health care companies (much blogging and book forthcoming).

This series will pull on concepts, terminology and lessons from two disciplines:

 

  • Economics of networks. This branch of economics dates back to the 1970s, and there are 2000+ articles here. Virtually none of these have touched on healthcare.  Much of this is pretty thick stuff – economists often favor mathematical models rather than straightforward analysis. Economists also disagree among themselves and despite having been around for 40 years, the science is not well understood.
  • Platform technologies and business models. This includes common products and services such as personal computers, cell phones, gaming systems, streaming media, and telecommunications infrastructure, auctions (ebay), online shopping, and many others.  These can be described in terms of systems where developers build applications”on top of a platform”  – think “Apple iPhone” + thousands of apps. While many platform business models date back to the 1980s, the field has only been studied rigorously for less than a decade….and again there’s lots of disagreement and lack of understanding.

There are some great lessons from these disciplines to apply to healthcare, and many road kill autopsies as well.

I promise to focus on introducing highly relevant concepts and terminology, avoiding technical language and math, and writing in plain old English (POE).  Please call me on it if I trip.

Here’s a working list of topics in this series:

  • Network Economy: Old v. New World
  • Characteristics of Network Industries
  • How is Value Created In a Network Economy?
  • Network Effects: Examples
  • Network Effects: Direct and Indirect
  • Network Effects: Critical Mass & Tipping
  • Predicting Network Effects and Measuring Network Value
  • Does Healthcare Have “Winner Take All” Markets?
  • What’s Unique About Healthcare?
  • Implications for Business Models and Strategy
  • ?? others

 And although I touched on the topic above, I can foresee a separate series relating specifically to platform technologies and business models.

I look forward to provocative discussions!

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License. Feel free to republish this post with attribution.

7 Comments

  1. arthurwlane on August 20, 2009 at 7:28 pm

    Healthcare Crosses the Chasm to the Network Economy (vince Kuraitis): http://bit.ly/3fqXkQ



  2. Betty Rider, FACHE on August 22, 2009 at 8:33 am

    Vince, the new series is spot on! Thanks for addressing such a mission-critical topic.



  3. Zenneia McLendon on August 24, 2009 at 12:40 pm

    Hi, I’m writing from the National Academies. We are delighted to see your mention of the Institute of Medicine’s 2001 report, “Crossing the Quality Chasm:
    A New Health System for the 21st Century”. This report is available to read online http://bit.ly/3mmVve, we encourage your readers to view the report in hopes that it will enhance the conversation.



  4. Linh Nguyen, MD, MMM on August 25, 2009 at 3:47 pm

    I think platform technologies and business models are together than a separate message. One who can use platform to trigger physician’s network using the services will win the game. Sermo is one of the powerful model, but too limitted in their business model.



  5. Richard Adler on August 27, 2009 at 12:28 am

    Astute analyst @vincekuraitis is exploring health care as a "network industry" Looks promising http://tinyurl.com/leyyzk



  6. Brendan McAdams on October 19, 2009 at 1:07 pm

    A great area for dialog, Vince.

    If I could suggest another potential topic be added to the working list, it would be discussion of the key components necessary for adoption of a network(standards, ease of use, low/no cost, ubiquitous technology, role of govt, etc.) and the obstacles that would otherwise impede rapid adoption.