How platform-based ecosystems could transform healthcare delivery
#1 and what research shows about implementing VBHC principles in hospitals
This week we look closer at how business models can maximise the impact of health tech. We also explore the gap between the value-based healthcare framework and its real-world implementation.
In this week's edition:
The business perspective: how digital platforms can bring together ecosystem participants and unlock technological promises.
From theory to practice: the VBHC framework adoption is increasing, but does that translate to sustainable impact?
Up and coming: healthcare in the metaverse.
Can business models unlock technological promises?
A report from Deloitte highlights five core principles to deliver a platform-based ecosystem in healthcare
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Status-quo
Investment in healthcare technology reached a new high in 2021 and is still on the rise. However, increasingly sophisticated technologies struggle to deliver game-changing benefits at scale. Whilst most burning healthcare challenges remain unresolved; new business models might unlock technological promises.
Building ecosystems
Digital platforms are not new (think Uber, Airbnb, Netflix). So how does this model translate to healthcare?
Healthcare is a complex and fragmented industry. Digital platforms can connect a large number of participants in an ecosystem. They can act as brokers to enable mutually beneficial exchanges between stakeholders. A good practical example is Transcarent, a unicorn evaluated at $1.62 billion in January 2022.
General principles
Building on Ben Thompson's Aggregation Theory, a recent Deloitte report details five core principles to deliver a platform-based ecosystem in healthcare:
Accessibility of underutilised assets - e.g. provider availability, data
Delegation to the ecosystem - partnering instead of owning suppliers
Modularised components - enable partners or third parties to "plug and play"
Focus on the consumer experience - improve and simplify
Leverage network effects - incentivise partners and grow user base
Going forward
The advent of platform-based ecosystems holds the potential to reduce care delivery fragmentation. The model can harness state-of-the-art technology to deliver meaningful clinical and economic outcomes at scale.
Read the full Deloitte report.
Value-Based Healthcare: from theory to practice
Research by von Staalduinen et al. highlights the challenges in implementing winning strategies
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The unsustainable cost of healthcare warrants more than ever a change of paradigm. Stakeholders are now looking into innovative ways to align incentives to meet the increasing population needs.
The theory
Porter and Teisberg introduced the Value-Based Care (VBHC) framework in 2006. The concept has received growing attention, with significant stakeholders reorienting their strategies. The "value equation", in theory, is straightforward. In the VBHC framework, value is the ratio between health outcomes achieved and costs. Albeit simple to grasp, the concept has remained challenging to put into practice in real-world conditions.
The six pillars of VBHC provide a sound theoretical framework, but implementation guidelines remain vague. As a result, promising implementation stories do exist to a varying degree but offer a reminder that no one size fits all.
In practice
Scoping research conducted by von Staalduinen et al. explores deeper the conceptualisation of VBHC in the relevant literature and associated hospital implementation.
Key findings:
The definition of VBHC remains unclear in most cases.
The implementation of the VBHC framework is often partial. Most projects have focused on measuring outcomes, costs and structuring Integrated Practice Units (IPUs).
Few studies examined the effects, but results were generally positive when evaluated.
Implementation strategies were rarely described. Comparing different approaches was difficult, best practices are hard to identify.
The takeaway
The VBHC framework brings a new vision of success in healthcare, but carefully tailored local strategies remain critical to achieving lasting change. Education is often raised as a critical success factor in implementing VBHC. However, it is worth noting that the general public is still not widely familiar with the concept.
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🌌 Care in the metaverse
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That’s it for this week!
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Léa