modelH is a business model canvas designed specifically for healthcare. It was designed to help business innovators generate and evaluate healthcare business models that can create positive consumer experiences, improve care delivery, along with aligning to control costs. Evaluation of each building block in a business model promotes consideration of the model’s strengths and weaknesses. Likewise, the structured layout of the canvas encourages thoughtful reflection regarding how the individual building blocks fit together. The 17 building blocks in modelH deal with 4 key business functions: the customer, your product, your operations, and your finances. As a strategic management tool, modelH can be used to design, describe, challenge, invent, and pivot your healthcare business model.
Introduction to the Cord Blood Industry
In this BLOG and 10-minute video, we look at the cord blood retrieval and storage industry through the lens of the modelH business model canvas.
Umbilical cord blood (or simply cord blood) is blood that remains in the placenta and the attached umbilical cord after childbirth. Cord blood contains stem cells that can be used to treat a variety of disorders. It is often viewed as a noncontroversial source of stem cells, which are currently being used to treat a wide variety of illnesses, immune deficiencies, and genetic disorders.
Generally speaking, there are two types of cord blood banks. Private cord blood banks store cord blood to be used exclusively by either the baby or a family member. This option ensures that cord blood is available to the child and/or the child’s family in the event of a future medical need.
Cord blood, donated to a public bank, is available to anyone who may need it. It can be used to treat any compatible patient, and may also be used for medical research. Most of the business model components covered here (for illustrative purposes) apply to both private and public cord blood banking.
The Cord Blood Business Model Canvas
modelH Business Model Building Block Explanation
|Buyers are the customers a business sells to & may also be the User. In our business model illustration, there are three Buyers: 1) the families that exclusively preserve their child’s cord blood, 2) the care providers who want to use the stem cells in the cord blood to treat patients, and 3) the researchers who want access to cord blood for research purposes.|
|Users are the customers that a business model serves. In this business model, the Users include the 1) families who need the cord blood for treatment of a family member, 2) the individual patient requiring the treatment, and 3) researchers who want the cord blood for research purposes. In this example there is also great overlap of the buyers and Users, but not entirely.|
|Intermediaries affect how a Value Proposition is seen and paid for by the Buyer(s). The Intermediaries in this business model example are 1) the donors who agree to give their child’s cord blood and 2) those physicians treating disorders with stem cells from the cord blood.|
|Jobs-to-be-Done (JTBD) are high-level goals the customer is trying to accomplish. Jobs-to-be-Done are typically stated in the words of the customer. As an example the two JTBDs for a “family” User are:1) “I want to preserve my child’s cord blood in case they have a disease that can be treated from the stems cells within it” and 2) “I need to access my child’s cord blood to treat a disease for me and/or them that can be helped by the stems cells within it.”|
|Value Propositions are products & services offered to customers in order to solve their JTBD. In this business model, an example value proposition for the “family” User involves the Cord Blood Bank collecting and storing the cord blood so that it is accessible to treat diseases and disorders for that person or their family when needed.|
|Key Behaviors are the activities required of the User to complete their JTBD. For the “family” User using a private blood bank they include signing up ahead of the child’s birth and paying for the initial collection and ongoing storage of the cord blood.|
|Key Influencers affect the User’s understanding & ability to complete their JTBD. In this business model example, the FDA, which publishes cord blood banking information for consumers, hospitals and Birthing Centers is a good example.|
|Channels are the ways a company brings its Value Proposition to market. In our business model, Channels include: 1) an owned direct sales force that sells directly to pediatric offices, 2) an owned direct call centers that supports customer inquiries, and 3) an owned digital presence to create supporting materials online to influence the purchase decision of the buyer. Another Channel is an un-owned digital presence used to influence independent sources to post supporting materials online that also help influence the purchase decision of the Buyer.|
|Customer Relationships are connections a company creates with their Buyers & Users. In this business model, there are two main Customer Relationships that must be maintained. The first is personal assistance directly with they Buyer in order to provide them answers for questions about blood cord banking. The second is account maintenance for keeping channel partners informed about changes in the product, the pricing, and/or the diseases/disorders it cures.|
|Experience includes how Buyers and Users perceive a business model’s Channels and Customer Relationships. In this business model example, the Blood Cord Company will have to help Buyers to overcome any price sensitivity associated with the high costs of private blood banking. The Blood Cord Company will also need the ability to project strong financial and clinical assurance so the Buyer is willing to deposit their cord blood with a particular blood bank.|
|Key Activities are the most important tasks required to create the Value Proposition. Some examples of Key Activities in this business model include 1) educating buyers about the value proposition, 2) obtaining informed consent from the buyers, and 3) collecting the cord blood and cord tissue. There are many others.|
|Key Resources are the internal actors required to deliver the Value Proposition. In this model, the Key Resources include: sales staff, call center staff, medical directors, cord blood retrieval experts, cord blood storage facilities and blood tracking/matching systems.|
|Key Partners are the external actors required to deliver the Value Proposition. For this example the Key Partners include 1) the OBGYN Offices and Hospitals that they sell through, 2) the pediatric nurses and midwives that help explain blood cord banking and donation to customers, and 3) the vendors of the equipment and enabling technologies for the collection, testing, tracking, maintenance, matching and distribution of cord blood.|
|Costs are the most important financial drivers of a business model. In this business model, the main Costs are derived from blood collection, blood processing, blood storage, blood distribution, and company overhead costs.|
|Revenue is the way a company makes money from its customers. In this business model, some Revenue examples for private blood banks include a 1) one time fee from the initial cord blood acquisition, 2) a reoccurring fee for storage, and 3) a fee for accessing and shipping the cord blood on behalf of a depositor.|
|Informatics is the data and analytics needed to deliver and measure the Value Proposition. For our business model example, Informatics includes 1) the genetic typing (information) of the cord blood, 2) the quality control information for the viability of stored cord blood, and 3) information on the specific customers and donors.|
|And finally, Externalities are the external forces and regulations imposed upon a business model. An example of an Externality in this business model is compliance requirements imposed by the FDA on all blood cord storage facilities.|
You can download the modelH canvas for this case study here.
You can also see the live Abzimo business model canvas for this case study here:
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To your health,
The Team at imagine.GO