Service Business Model Innovation, the first case study from our recently published book chapter

As we blogged about last week, M2HCC authored a chapter entitled “Essential Characteristics of Service Business Model Innovation in Healthcare: A Case-Study Approach” in Service Business Model Innovation in Healthcare and Hospital Management published by Springer.  Today we share highlights from the first case study we feature in the chapter.

Baylor Scott & White Health’s collaboration with The Cleveland Clinic

In December 2014, three Baylor Scott & White Health hospitals—Baylor Jack and Jane Hamilton Heart and Vascular Hospital, Baylor University Medical Center at Dallas and The Heart Hospital Baylor Plano—were invited to join the Cleveland Clinic’s National Cardiovascular Network, the first hospitals in the Southwest to be invited.

Joel Allison, CEO of Baylor Scott & White Health called it a “collaboration of the future,” in part because Baylor Scott & White Health’s (BSWH) collaboration with Cleveland Clinic spans geographies, but not medical specialties. Instead of cooperating in a geographic area with a broad range of health care provider types, this collaboration is based instead on the quality of a single medical area of focus: heart disease. However, similar to the other case studies M2 researched and wrote, this collaboration clearly demonstrated 1) trust is built over time and 2) leadership takes vision.

Trust is built over time

The importance of trust is multifaceted. Not only are these hospitals some of the most trusted in the world, a reputation they built over years of delivering excellent quality care, the leaders also knew each other for years before the collaboration was executed.

“The folks at Cleveland Clinic were known to us, and us to them,” Dr. Michael Mack* told us. The partnership wasn’t the result of “responding to a request for proposals.” That being said, even such deep-rooted trust was not enough to seal the deal. Only after a year-long intensive due diligence process was an invitation to participate in the network extended.

Leadership takes vision

“The idea behind the model is a vision of how the business of health care is going to change in the upcoming years,” explained Dr. Mack. “This was an opportunity to develop a business model to best adapt to that changing paradigm of health care going forward.” What does that paradigm look like? To BSWH and Cleveland Clinic, it is thinking less about serving a market based on geography, and thinking more about serving the entity who pays for the care, the patient or the employer, for example.

This particular service business model is uniquely innovative in that the network aims not only to provide high quality health care, but also to provide predictability and transparency to the final purchaser—whether a patient, an employer, or a payer. This model “shifts the risk from the insurer to the provider,” said Dr. Mack. “We are providing a high dollar operation, and we guarantee the price and quality.”

Pivoting to the new world of transparency

Providing “transparency of care, transparency of quality, and transparency of price,” said Dr. Mack, is moving the health care market closer to the way other markets function. “You wouldn’t go into a Best Buy without knowledge of the product and price of the product you are considering for purchase,” explained Dr. Mack.

Providing transparency of care, quality, and price to patients and payers shouldn’t feel like a cutting edge innovation. But in fact, it is. Time will tell whether this particular innovation is adopted more widely.

*Michael Mack, M.D., is the Medical Director of Cardiothoracic Surgery for Baylor Scott & White Health and the Chairman of The Heart Hospital Baylor Plano Research Center. Dr. Mack is on the team of physicians on the medical staff that oversees medical care provided in The Heart Valve Center of Texas in the Center for Advanced Cardiovascular Care.