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business model
Your Company Has A Technology Platform…But Do You Have A Platform Business Model and Strategy?
Today in healthcare, platforms are understood mostly as technology. That’s not wrong, but it’s limiting and it misses a huge opportunity to adopt a platform business model.
In most other industries platforms are also understood as a business model and strategy. Outside of healthcare, there are 45+ books focusing on this topic.
This post is written for:
- 9,000+ early-stage digital health companies, most of which have a software and/or hardware technology platform as a centerpiece of their offering
- Healthcare incumbents — health systems, health plans, pharma, medical devices, etc. — that provide a digital platform as part of their external offering. For example, health systems that have an EHR platform, a patient portal, and/or a population health platform.
What Do Platforms Do?
The New Rules of Healthcare Platforms: Platform Thinking Expands from “Technology” to Business Model & Strategy
by Vince Kuraitis, JD/MBA and Randy Williams, MD
Today in healthcare, platforms are understood mostly as “technology”. That’s not wrong, but it’s limiting. We want to offer you a more expansive view of platforms, and in turn, understand platforms as being more than just technology.
This post is the third in our series on The New Rules of Healthcare Platforms. In this essay, we will:
- Explain why platform business models are NOT new
- Share a survey of health plan execs that documents a view of platforms as “technology”
- Explain how network effects are the North Star of platform business models and strategy
- Expand your view of platforms beyond just “technology”
Platform Businesses are Not New
Platforms facilitate connections.
While digital technologies have turbocharged platforms, platform business models are not new. Here are some examples:
- Bazaars, shopping malls, swap meets, auctions: connecting buyers and sellers
- Magazines, newspapers, broadcast TV, radio: connecting readers, viewers, and listeners with advertisers
- Credit cards: connecting retailers and cardholders
- Real estate multiple listing services: connecting sellers and brokers
- In healthcare, the National Resident Matching Program: connecting medical graduates with residency programs
The New Rules of Healthcare Platforms: Value Creation Shifts from Pipes to Platforms
by Vince Kuraitis and Randy Williams
Value for customers is created differently on platforms than by traditional product/service business models. Today we’ll present and discuss the metaphor of how traditional businesses can be thought of as “pipelines” and how these pipes differ from digital platforms.
A New Series
This post is the first in a new series: “The New Rules of Healthcare Platforms.” We’ll be writing about platform thinking, new mental models, and the new economics of platform business models and strategy. We’ll have at least seven posts to explain these new rules.
You’ll have some unlearning to do. We’ll illustrate how platform business models are fundamentally different than traditional product/service business models. To understand platforms, we need to change more than just our thinking—we need to learn new rules about how the digital world works and how platforms fit in.
From Pipes to Platforms
Traditional product or service businesses can be described as pipelines. Their value chains are linear—see the diagram below. Value is added at sequential stages before a final product or service is delivered to consumers at the end of the pipeline.
Amazon is Uniquely Positioned to Deploy Platform Envelopment Strategies in Healthcare: 7 Leverage Points (Part II)
In Part I of this series, we defined platform “envelopment” strategies. In short, platform companies can leverage an existing user base and existing capabilities into new markets. We then documented seven of Amazon’s leverage points in potentially deploying envelopment strategies in healthcare:
- A Huge User Base
- A Loyal User Base
- Provision of Hybrid Clinical Care
- Deep Pockets
- A National and International Footprint
- One-Stop-Shopping for Employers?
- Digital Front Door for Healthcare?
In Part II of this series, we take these seven leverage points and compare Amazon’s ability to deploy envelopment strategies with companies in five other sectors of healthcare:
- Virtual care platforms
- Other Big Tech
- Retail Pharmacy
- Other Big Retail
- Regional health systems
As we noted in Part I, “envelopment” originally refers to a military flanking maneuver — an attack to the side or rear that avoids the enemy’s frontal strengths. Our intent is to illustrate the power of platform envelopment strategies and to specify some of Amazon’s potent options. We’re not forecasting Amazon’s success, and we’re not suggesting competitors are defenseless — they have many other strategic options.
Amazon’s Leverage Points to Deploy Envelopment Strategies: A Comparison
The graphic below summarizes our perspectives of Amazon’s leverage points and how these leverage points line up against major competitors. We set a 5 year time horizon.
Gist Healthcare Podcast: Toward a Platform Future
Randy Williams, MD and I were interviewed about platform business models and strategy by Alexandra Olvin of Gist Healthcare. This is the first podcast in a four-part series: “Toward a Platform Future.”
We discuss the growing popularity of platform business model in healthcare, and what it might mean for the industry:
- “Platform thinking” for healthcare
- Defining a platform
- Companies best positioned for platform business models
- Threats and opportunities for incumbent health systems
- The rise of virtual care platforms
Presentation Slides: Strategy & Business Models in Healthcare Blockchains
Here’s a copy of my slides from my keynote presentation at The Healthcare Blockchain Summit in Washington D.C. The presentation is titled:
Blockchains in Healthcare: Transforming Strategy & Business Models?
After reviewing some industry background and analysis of trends, consider 7 key implications:
Beware of “yellow flag” blockchain tech terminology: “could”, “possible”, “promising”.
Digital strategy is different than industrial era business strategy.
IMO, the most likely scenario for blockchain tech in healthcare is slow, steady growth over the next decade. After critical mass […]
Aetna, Cigna, Wellpoint Recreating Their Business Models
Major U.S. health insurers, including Aetna Inc., Humana Inc. and WellPoint Inc., are retooling to become more than just health plans, in the wake of the federal health-care overhaul that is changing the rules for the industry’s core business.
Diversification plans, touted in meetings with investors this year, include stepped up acquisitions and partnerships that will allow the companies to employ doctors directly, deliver health-information technologies, and participate in new hospital-doctor groups known as accountable-care […]
Is Hospital-Physician Integration Sustainable?
Reprinted courtesy of MCOL.
Perspectives on a Selected Key Topic |Â Â Â Â April 2011/May 2011Â Â Â Â |Â Â Volume Three Issue Two
Will a material number of hospitals and their core medical […]
Lesson for Healthcare: Disrupt Your Own Business Model Before Someone Does it TO YOU
Healthcare needs positive role models for innovation…and we have a real-time mentor in Netflix.
If you have a Netflix subscription, you probably identify with the company as providing a convenient DVD rental service — order on the web, the DVD arrives by mail, send it back in the handy pre-paid envelope when you’re done.
Today’s ReadWriteWeb describes Netflix’ latest letter to shareholders and explains how the company is preparing for the demise of DVDs:
Could Facebook Be Your Platform for Care Coordination?
My guess is you’ve probably never asked yourself this question. A quick preview:
Technical barriers aren’t the limiting factors to Facebook becoming a care coordination platform.
Facebook’s company DNA won’t play well in health care.
Could Facebook become the care coordination platform of the future? If not Facebook, then what?
1) Technical barriers aren’t the limiting factors to Facebook as a care coordination platform.
Can you imagine Facebook as a care coordination platform? I don’t think it’s much of a stretch. Facebook already has […]