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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!

Article Series - Healthcare Crosses the Chasm to the Network Economy

  1. Intro to a New Series
  2. What’s a Network Industry? Is Healthcare One?
  3. We’re Building a REALLY BIG Health Internet!

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Discussion

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Comments

1.
On August 22nd, 2009 at 8:33 am, Betty Rider, FACHE said:

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

2.
On August 24th, 2009 at 12:40 pm, Zenneia McLendon said:

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.

3.
On August 25th, 2009 at 3:47 pm, Linh Nguyen, MD, MMM said:

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.

4.
On October 19th, 2009 at 1:07 pm, Brendan McAdams said:

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.

Mentions on other sites...

  1. arthurwlane on August 20th, 2009 at 7:28 pm
  2. Enda Madden on August 21st, 2009 at 5:40 am
  3. Richard Adler on August 27th, 2009 at 12:28 am