Medical care, whether it is sick care or prevention and wellness care, is in desperate need of new business models. Most physician entrepreneurs have a hard time describing a business model, let alone creating new ones. They are not alone.
I like the definition that a business model describes the rationale of how an organization creates, delivers, and captures value. In other words, where and how it does things to create a profit.
The present medical business model is riddled with inefficiencies, perverse incentives, pricing problems, third party intermediaries and multiple stakeholders that result in about 1/3 of medical spending being wasted. Patients are frustrated and doctors are angry.
It's time to take a page out of other industry's play book, and create new business models for medical care. Concierge medicine, a direct or pre-pay model, has grabbed a lot of attention, but there are many more, as noted in this HBR post.
Rules drive ecosystems. Ecosystems create business models that sustain innovation. If we want new business models, we'll need to change the rules.
Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs at www.sopenet.org