trust

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

By M2|2017-10-24T02:32:10+00:00March 14th, 2017|Uncategorized|

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.

Service Business Model Innovation, an overview of our recently published book chapter

By M2|2017-10-09T02:03:42+00:00March 7th, 2017|Health Care Trends, Uncategorized|

Service Business Model Innovation, an overview of our recently published book chapter

We are proud to announce the publication of Service Business Model Innovation in Healthcare and Hospital Management by Springer. The book includes process innovations and toolkits that can be used to improve value generation and build competitive business architectures in the health care sector.

M2 authors contributed a chapter entitled “Essential Characteristics of Service Business Model Innovation in Healthcare: A Case-Study Approach.” The chapter highlights examples of successful service business model innovation at four different U.S. health systems, based on interviews with leaders from each institution. The next few blog posts will highlight key learnings from the case studies we wrote about Baylor Scott & White Health’s collaboration with The Cleveland Clinic, BJC HealthCare and the BJC Collaborative, the Massachusetts General Physician Organization, and Sutter Health and the Sutter Medical Network.*

Why did we write these cases?
In my work with clients, and as a lecturer for graduate students in public health, I have been given access to two unique viewpoints into the U.S. health care system, and in my opinion, each set of observers need to know more about the other. My clients are often grappling with creating health care system change, but don’t have a roadmap – they often have to create models from scratch. Graduate students, who are often academic learners and professionals in their field, are taught theoretical models or frameworks, but don’t have a good sense of how theory translates into practice.

In addition, the system of delivering and paying for health care in the U.S. is undergoing seismic changes. Some of this change is driven by federal, state and local governments, who pay for about half of all U.S. care, and some of the change is driven by innovation created by the marketplace. Health care organizations that have succeeded in creating service business model innovation in the new world of accountable care, integrated delivery, shared-savings, and value-based approaches have certain characteristics in common.

Based on the case studies we wrote, which represent a range of U.S. geographies, provider types, and collaborative arrangements, we found service business model innovation rests on the pillars of trust, leadership, and cooperation.

Why is innovation needed now?
The health care system is undergoing massive change, no doubt. But why is innovation needed now?

Thomas Robertson, the Executive Vice President of Member Relations and Insights for the University HealthSystem Consortium, an alliance of nonprofit academic medical centers and their affiliated hospitals, wrote in an opinion piece for Academic Medicine in 2015:

“Seemingly lost in the race to manage everything everywhere is the recognition that a very small subset of very sick patients account for the vast majority of health care spending. Any programs, prospective payment systems, or policies designed to curb health care spending must focus on improving the efficiency of complex episodes of care delivered to the sickest subset of the population. Whether a population is defined as a company, a county, or a country, the overwhelming majority of its health care spending comes from a small minority of the individuals, and the bulk of that spending is associated with either largely unavoidable and unpredictable single events or complex episodes of care. Achieving an economically sustainable health care system will require more efficient and effective delivery of those complex episodes of care.”

More efficient and effective delivery of complex care, however, requires a diverse set of providers to work together – which is not how the current system was built, nor is it how most payers reimburse health care practitioners for providing care. In these contexts, a health organization must trust its partners more than ever before.

Our chapter, “Essential Characteristics of Service Business Model Innovation in Healthcare: A Case-Study Approach”, provides a roadmap of the various ways organizations are meeting the challenge to efficiently and effectively deliver complex care by using the key skills of trust, leadership, and cooperation to create service business model innovation in the U.S. health care system. We hope this roadmap serves health care leaders, health care system students, and anyone else interested in creating health care change.

*A special thanks to Dr. Horn (MGPO), Sarah Krevans (Sutter), Dr. Mack (BSW), Sandra Van Trease (BJC) and Dr. Wreden (Sutter) for participating in interviews on behalf of their organizations.