By Joel French, CEO of SCI Solutions
Healthcare is ripe for disruption. It is one of the last major U.S. industries to be transformed by technology advancements and business model innovations. Most other industries and market segments have completed at least one cycle of transformative technology and structural business model change, with market position and attendant capitalization level shifts favoring those willing to aggressively innovate ahead of demand. Examples abound in banking, retail, music, transportation, energy, government, education and entertainment.
Healthcare, however, seems intractably tied to technologies, processes and implementation models that are highly organization-centric rather than community-centric. Said differently, many healthcare IT systems are designed for use only within the walls of hospitals or health systems, and do not help connect to the network community outside of the hospital. To affect change, organizations must rethink existing market-based value chains and demand fundamentally different information technology systems. Vendors must become more innovative and develop better business models.
Fortunately, true electronic community care coordination can be achieved using technologies that have been repeatedly modeled in multiple other industries. In what is perhaps the most common yet enduring example, the disruptive technology-driven transformation that’s emerging in healthcare is analogous to what the retail book industry has experienced with the arrival of Amazon. In recent years, brick-and-mortar giants such as Barnes & Noble have struggled while Amazon’s domination accelerated as customers recognized the advantages of shopping online with a trusted merchant that consistently delivered quality, convenience and price advantages by electronically choreographing a complex supply chain.
Take Uber as another good example. While the company is having its share of challenges, it still changed history with its ability to elegantly connect supply with demand, in a way that delighted customers and distinguished itself from existing services. Nearly overnight, calls to cab companies died and you saw fewer arms raised in the streets to hail rides. The technology platform changed the way people moved around cities and paid for it. More importantly, it shifted power from cab companies to cab drivers by streamlining workflow digitally and creating new efficiency paradigms useful to both cab driver and consumer. Cab companies now must embrace similar platforms to meet new consumer demand, or die.
No industry analogy can be perfectly applied to U.S. healthcare, but health system executives would be wise to consider lessons learned by their industry counterparts. Amazon’s investment in customer relationship management technologies has been essential to the company’s success. The technologies have allowed Amazon to electronically and economically integrate business processes across a worldwide supply chain of merchants while consistently maintaining low pricing, wide selections of quality merchandise and convenience. Amazon studiously records data on customer buying behavior, then recommends additional items based upon a consumer’s demonstrated preferences. Healthcare organizations require similar capabilities if they wish to accumulate and sustain long-term competitive advantages.
Healthcare CIOs, are you seeing an appetite for IT innovation in your organizations? CFOs, are you looking for technologies to help grow your business? Do you think high costs and criticality of services make healthcare ripe for disruption, or allergic to it? Most importantly, how can organizations leverage technology to positively impact the bottom line? We’ll explore these questions and more in next week’s post.