“But when I have drilled down into the work the so-called innovation labs were actually doing day-to-day, I have discovered that it is actually the innovation managers that “don’t get innovation” It turns out your boss was right to shut down your lab and here are five reasons why.” Forbes, Tendayi Viki
We try and stay pretty positive about innovation and disruption – after all, it is what we do for a living. However, I saw this article recently, and it struck a chord with our entire team.
From the article, we agree with the author’s points about:
Most people working innovation labs tend to conflate innovation with creativity.
A lot of innovation labs are working on projects that are not aligned with the parent company’s strategic goals.
Innovation labs need to have a strategic focus.
The job of an innovation manager is not to imitate the outcomes of innovative companies (i.e. ping pong tables and bean bags), but to understand and implement innovation practices to create one.
After many years, most innovation labs have to demonstrate impact.
How Do You Know If Your Innovation Effort Needs Disrupting?
I am proud that (before it was all the rage) I was one of the 1st Chief Innovation Officers in healthcare. As part of a $12-billion-dollar machine that had been running pretty much the same way for 75 years, I certainly found the task daunting. Coming from the startup world, where I had successfully helped launch national healthcare disruptors like RediClinic and The Little Clinic, it was a shock to the system (mine and theirs). That journey is food for another story. However, my time there changed me in a very positive way, and I am certainly pleased with the results.
I mention it, however, because the article above made me realize what I could not verbalize but was feeling – most corporate innovation programs are little more than “innovation as theater.” Even with best intentions, many of them have missed their purpose, which is to disrupt. Instead, many innovation managers busy themselves (and burden others) with the non-essential work.
We decided to add in a few self-check questions that we believe all innovation managers should ask themselves. And if the answer is “Yes” (please be honest here) to most of them – then you probably need to rethink your innovation efforts.
Is your Innovation Lab more than walking distance for more than 95% of your employee base?If so, bad idea. Innovation is for anyone who can contribute – incrementally or significantly. Who are we to think innovation only lies with a small team? This approach is a sure fire way of creating the “us vs. them” scenario.
Do less than half of your “market ready” innovation projects get adopted by the core business?If so, then you are probably innovating for yourself. If no one wants or can use your best work, then you are not aligned with the work of the “core.” Remember, it is the big machine that pays for your experiments (and expresso machine and bean bags). You have to be meaningful to them if you want your work to take root in the market and grow.
Do you spend more time at innovation conferences than producing successful “market ready” innovation projects? This one should be obvious. No one can tell you what will disrupt your business better than you. That is what you are paid to do. As fast as you can, learn the basics of minimum viable product development and agile methodology – and get busy disrupting. If you want some help learning or doing – call us because this is what we do best.
Well, that is what we think at least. But hey, we could be wrong. Let us know one way or the other.
Dell Healthcare hired imagine.GO to design and launch a CRM solution for health insurance companies.
Dell Healthcare is one of the largest Healthcare Technology Services providers in the world. They provide the people, processes, and technology to help health plans and large health care providers create the healthcare of the future.
The goal of this project was to define the ideal approach for implementing Salesforce.com as a CRM solution for health insurance companies. We used our 15+ years of implementation experience to not just design and build a technical solution, but also define the best way to implement it for Dell and its health care clients. Our work included how to set client expectations, how to make key design decisions, the best way to set up user roles, and our expert recommendations for customizations to the core Salesforce system.
Our final product produced solutions for health insurance lead management, sales, onboarding, service, and even care management. A high-level view of a few of the features in the solution are shown in the images below.
imagine.GO provides Salesforce CRM implementation services for healthcare companies using our proprietary delivery methodology (Decision Driven CRM Design). We also develop our own Healthcare Applications, currently available on the AppExchange.
We have been busy this year helping companies launch new healthcare products. We have been doing some killer work on the Salesforce.com platform for one of our clients CareCentrix. CareCentrix is the leader in managing patients from high-cost hospital settings into the comfort and safety of their homes. For 20 years, they have worked with payors and providers to create programs that improve quality and lower costs via patient care in the home. We love this client because they are serious about our triple aim of creating real value in healthcare. To us, “value” is measured in:
Improved consumer experience yielding an informed decision maker aligned to their risk and reward;
Increased access to necessary care through an engaged delivery system; and
Reduced aggregate cost of care, with a market-driven, balanced incentive and reward model.
Speaking of Salesforce, we had planned to skip Dreamforce this year – but our partners there convinced me otherwise.
We are presenting in the Dream Theater on our Health Cloud implementation and our client (CareCentrix) is on one of the main stages.
We are set to speak at Thursday, October 6, 12:15 PM – 12:40 PM and the Moscone South, Industry Partner Theater.
Annual healthcare costs are $3.0 trillion. A solution is to move care from high-cost arenas into lower cost one. imagine.GO is a health-focused innovation consultancy that also develops applications for the AppExchange. Come and see our solution enabling healthcare delivery in the home using Health Cloud and Communities.
It is nice to see McKinsey publish an article on something imagine.GO pioneered in healthcare. The use of business model innovation as a means to drive transformation into new models and new markets – and ultimately disrupt yourself.
“We’re often asked, “Can you keep innovating?” The truth is, I find that the more you innovate, the more you can innovate.” – Adrian Gore is the founder and CEO of Discovery
We pioneered this at GuideWell and since that time, we have worked with many great healthcare companies. We have even had the good fortune to get to work with some of the Discovery team in the U.S. via Humana Vitality.
Our modelH method enables companies, large and small, to quickly generate better business models and communicate them across stakeholders. We apply it to companies that need transformation or want to create new products with real product market fit. We also apply it to start-up concepts to build them into sustainable business models. Here is the article from McKinsey.
My talk focused on three simple rules for building healthcare businesses. In brief, they are:
1. Make sure your business model has applicability to all parts of the healthcare ecosystem.WHY? Building healthcare business models require understanding the dynamics of the ecosystem. It is very hard to disrupt the players. Make sure you know how your stuff helps their stuff.
2. Make sure your business model speaks to all parts of the healthcare canvas.WHY? Building healthcare business models require understanding the moving parts and then showing how they interact. We think there are more of moving parts that Alex Osterwalder’s 9 (although we love his 9 dearly). That is why we built modelH – a business model canvas designed specifically for healthcare companies to develop and explain their business models.
1. Make sure you business model is more than just a canvas.WHY? Building business model canvases is part of building businesses – but you are a long way from viability with just a canvas. Building healthcare businesses also require more than LEAN & your MVP (but please start with this). This is why our model for building businesses is focused on commercialization from the go.
In summary, know how your model will apply to the healthcare ecosystem, explain how your business model serves all constituents in the multi-sided market (and is believable), and show how you will operationalize your business based on sound decisions.
Here is the deck. Enjoy and let us know how we can make it better. And if you need help launching your company, contact us.
Join imagine.GO, Health 2.0, Google Ventures, & Henry Ford Innovations for our presentation Dollars & Sense: The Business of Healthcare at HXRefactored in Boston; Wednesday, April 1, 2015, from 3 to 5 PM EST. The Business of Health Care is going to decipher the economics of these influxes, evaluate business models that are working and why, and examine the multitude of players, including non-clinical roles, introduced into the sector.
HEALTH EXPERIENCE REFACTORED / CONFERENCE / APRIL 1-2 2015, BOSTON
It is no shock that the health care industry is booming and about to boom even bigger. In 2014, we saw record-breaking investment in the health care industry, closing the year at just over 4.36 billion. Courting VCs is no longer the only way to get on the map – many hospital groups are also putting skin in the game by launching incubator programs. The industry saw freshman start-ups touch the triple digit mark, which begs the question: who is succeeding in this cacophony of funding and innovation? The Business of Health Care is going to decipher the economics of these influxes, evaluate business models that are working and why, and examine the multitude of players, including non-clinical roles, introduced into the sector.
Join Kevin Riley speak the at the 5th Annual Heath Experience Refactored Conference in Boston. The theme will be improving health experience through technology and design. It will be held at the Westin Waterfront from April 1st-2nd, 2015. Kevin will be presenting in the session “Dollars and Sense: The Business of Health Care” on April 1st from 3:45-5:45. Immediately afterwards, there will be a questions and answers session.
Find out more from Kevin Riley along with the best resources, minds and technology as they uncover transforming heath care events. Information on registration for this event is located at http://www.health2con.com
Kevin Riley will discuss his design on healthcare business models and explain the healthcare “ecosystem” in its basic form and how it operates using 3 themes: care consumption, care delivery, and care financing.
Designing healthcare business models that work
The healthcare “ecosystem” in its basic form operates along 3 themes: care consumption, care delivery, and care financing. These domains are interdependent points of interaction along a value chain of healthcare. To impact one point, you impact them all. Make no mistake – healthcare is a business! The problem is that very few people create business models that are considerate of all three points of view.
In addition, across the value chain of healthcare, there are four key stakeholders: patients, providers, payers, and purveyors. To put it in simple terms, the party who consumes the product of healthcare (the “patient”) is usually not the one who pays for it, or at least not most of it. The party that pays for it (the “payer”) is best served when it is not used and is, therefore, motivated to push for less of it. Furthermore, the parties that deliver it (the “provider”), and the parties that support its delivery (the “purveyor”), are not aligned to place realistic boundaries on its cost, thus forcing the system into bankruptcy.
Due to its divided nature, the ecosystem is overrun with inefficiencies and creates dis-incentives across themes and between stakeholders so that each maximizes their value, often at the expense of the others. But the system is not so much broken as made up of working parts not working together. Our diagnosis of the problem is a misalignment of the ecosystem’s building blocks. Our prescription is to reset these building blocks into a better working order. The outcome will be a healthy and aligned ecosystem that is both market-driven and cost conscious.
The imagine.GO team believes the ecosystem can be fixed! The answer lies in aligning the business model, so all stakeholders share an understanding of “value” across the themes of consumption, delivery, and financing. Our definition of value is based on that of Michael Porter, put forth in his paper entitled “What is Value in Health Care?“
Value in healthcare is measured as the patient health outcome is achieved per healthcare dollar spent. A better healthcare business model must then result from three components: Improved consumer experience yielding an informed decision maker aligned to their risk and reward; Increased access to necessary care through an engaged delivery system; and Reduced aggregate cost of care, with a market-driven, balanced incentive and reward model.
Our goal for this presentation is lofty but achievable. We want to discuss how to fix the healthcare system so that all stakeholders can co-create better aligned and market-sustaining business models.
Read this blog to learn how retail medicine, a once disruptive healthcare business model, is now in acceleration mode with new variations (pivots) of the model still coming to market.
The team at imagine.GO are experts in the field of retail health. Since 2005, we have helped bring to market over 200 retail health facilities and stores for companies like RediClinic, Smartcare, The Little Clinic, HMSA, Affinity Health Plan, United Healthcare, and others. We have helped our clients develop their retail strategy, design and launch their retail channels, and build retail staffing models.
Big and Getting Bigger
According to the Urgent Care Association of America, the number of walk-in “retail” clinics across the country is now over 9,400. That is a 20 percent increase since 2009. Why is that? We believe one of the reasons is the Affordable Care Act. There are now over 10 million newly insured consumers seeking health care services through primary care channels that are already over capacity. So now the demand is being orchestrated through these retail medicine outlets. So what is the distinction between these retail medicine channels?
Retail Clinics are Nurse Practioner staffed walk-in health facilities located in retail stores, supermarkets, and pharmacies. They treat lower scope ailments and minor illnesses, as well as provide preventative health care services.
Urgent Care Facilities staff Physicians and Nurse Practitioners. They are walk-in health facilities that are usually free standing to treat health problems that require immediate attention but are not life-threatening. Some examples include setting broken limbs, adding and removing stitches, and even giving x-rays.
Walk-in doctor’s offices are Physician staffed walk-in health facilities that do not require visitors to be existing patients. They provide simple medical care in a hurry and treat problems such as mild asthma or minor allergic reactions.
An example of the services that each channel provides is shown in the table below.
Alternatives to ER Care
The current market trend in retail medicine puts a focus on growth in the urgent care space. According to the research firm Pitchbook, more than $3 billion in private equity and venture capital has been invested in new urgent care clinics since 2010. Many analysts believe this has to do with the new metallic plans that offer cheaper monthly premiums in exchange for higher deductibles. Consumers that choose this option are looking for the lowest monthly price and will monitor their costs by self-selecting urgent-care clinics. It is amazing to see the impact of patient choice coupled with market incentives. When the consumer can make their decision, on their own “dime”, they are voting with their pocketbook and choosing the less expensive option.
This trend probably does not bode well for the hospitals that own the ERs – but it does lower the aggregate costs of care, which is something we all need to strive to achieve. And, more importantly, it does so without compromising the quality. Studies show that retail and urgent care facilities offer better quality for their limited scope of services. It stands to reason if you specialize in a procedure, and perform it many times a day then you become very skilled at it. You also manage to offer that quality service at the lowest price.
Additional to cost considerations, patients usually obtain faster medical care at retail settings than they do at either the ER of their primary care doctor. I relate to this inconvenience. Last year I had to wait six months to book my physical at my physician – and I have been with him for five years.
One interesting consideration is that retail medicine facilities stress to their patients the importance of following up with their primary doctor after a visit. I am unaware of any studies that show if these follow-ups are happening – but I doubt it. The same reason that has consumers choosing the lower-priced, faster-serviced option is probably the same one that prevents them from “paying twice” and duplicating effort.
A Smart Venture for Health Plans
Starting in late 2014, GuideWell, a Florida-based heath insurance company with 1/3rd of the market, created a joint venture with Jacksonville-based urgent care center operator Crucial Care. The goal was to develop a chain of GuideWell Emergency Doctors urgent care facilities. One that just launched is a flagship $22 million facility in Winter Park, Florida, located in a retail center with a Trader Joe’s. The 7,500-square-foot building has 15-20 exam rooms and the ability to handle major medical issues — such as heart attacks, strokes, and internal injuries. It also takes care of minor issues like respiratory illnesses, ear and eye infections and sports injuries.
The team at imagine.GO applauds Crucial Care and GuideWell for this innovative effort. It is a good move following on the heels of Optum, a UnitedHealth Group company, which has opened Optum Clinic Urgent Care facilities nationwide.
The economics of this business model is smart. A health plan could save millions by offering their newly acquired Exchange members a place to exercise choice in care at a lower cost facility. For example, it costs about $94 to treat a sore throat at an urgent care center compared with the same treatment at the ER costs five times that amount. This difference saves the plan money and the consumer – a win-win. Because of this fact, we assume (and hope) that the GuideWell Emergency Doctors locations are central to areas of high market penetration for the health plan.
This level of investment seems to be on par with the health insurer’s running model of building premium retail health facilities. Correspondingly, many of the GuideWell Retail Centers are around 5000 square feet and are located in premium outdoor malls as freestanding structures. GuideWell was one of the pioneers in the retail insurance space. They now have a whopping 18 of retail storefronts. Understand, these retail settings are quite expensive. Pretty “high-cotton” as my father would say.
Given the cost of this endeavor, the health plan GuideWell must see a strong return on investment in the urgent care model. For full disclosure, I was the Chief Innovation Officer at GuideWell at the time of the retail store model’s inception, having just come off of helping launch a few hundred convenient care clinics for various companies like RediClinic, SmartCare, and The Little Clinic. I was also the founder and first President of GuideWell, so I have a great affection for this company. However, at the time, I advocated for smaller health insurance stores, and even seasonal pop-up stores, because the economics did not support the larger, permanent settings. Here again, we assume (and hope) the numbers are beneficial to our friends at GuideWell. The 2015 individual enrollment should be out soon, so we plan to see if the store expansion and size have worked to their advantage.
However, adding large format flagship stores is contrary to the current trend of building more moderately sized and often semi-permanent insurance stores. We should know, imagine.GO has helped design and build many of them for companies like large blue plan of Tennessee, HMSA, United Healthcare, Affinity Health Plan, and others. We believe in the retail health model and will be writing much more on the trends and innovations in this space very soon.
One other thing we cannot get our heads around is why the GuideWell Emergency Doctors urgent care centers did not take the blue name like their retail insurance store counterpart. The name GuideWell, while a good one, does not have the market awareness like “blue” We assume it must be a restriction of the parent blue brand (in fact they told us we cannot mention the brand in any way or form in this post). In any case, it seems to us like a missed opportunity. Building brand equity takes time and costs a lot of money.
Furthermore, the GuideWell name does not help the health insurance plan acquire business from its competitors in markets where an affiliated urgent care center exists. Consider the affinity consumers could have when they have a health insurer they like and a care facility they like, and they are integrated. It seems to work for Kaiser Permanente, the highest rated health insurer in the country. The health plan and care provider are once again the highest ranked for customer satisfaction in California according to the J.D. Power 2014 U.S. Member Health Plan Study. This is the seventh consecutive year they have received this honor. We at imagine.GO hate to second-guess, but on this one, we simply disagree with the naming decision.
Further Innovation in the Model
So how else is the retail medicine model changing? In a recent interview by Matthew Holt for The Healthcare Blog, Wal-Mart discussed their business model pivot in this space to a new Walmart-owned and controlled “Wal-Mart Care Clinic”.
Traditionally, Wal-Mart hosted what they called the “Clinic at Wal-Mart”. This business model involved Walmart leasing space in the front of their Wal-Mart Supercenters to a clinic operator, in many cases with a health system as part of the venture. With RediClinic, I was involved in the first ever retail clinics built in a Wal-Mart. Since that time, they have had many partners in locations across the country.
Because Wal-Mart owns the clinics now, they control the price and scope of the services they offer. The price is $4 for employees and dependents on the company’s health plan. For customers, the price is $40. The scope of services includes the standard fair for retail clinics, plus basic chronic condition management services, such as treating patients with uncomplicated diabetes, high blood pressure, and similar conditions. They also offer full point-of-care labs. To build and manage these clinics Wal-Mart partners with QuadMed.
Here is a helpful video that explains this new model:
“We believe there’s a significant opportunity to serve the chronic patient and that we have a lot of the offerings that they would need to be successful in managing that chronic condition together with our pharmacy and the over-counter offerings available in the Walmart store.” Ben Wanamaker, Senior Manager of Strategy and Operations at Walmart’
We at imagine.GO speculate the main reason for building these new clinics is due to the high cost of healthcare for their employees. First, in states that opted out of Medicaid expansion, Wal-Mart workers may not be able to get subsidies for their health exchange plans. Under the Affordable Care Act, subsidies start for those making over $15,900 a year. This fact means their workers will have to pay more out-of-pocket, which they cannot afford.
In a board memo leaked to the press, it was revealed that Wal-Mart workers “are getting sicker than the national population, particularly in obesity-related diseases”. These ailments include diabetes and coronary artery disease. The memo also stated that Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits. To put this in perspective, Wal-Mart spends $1.5 billion a year on health insurance. Wal-Mart also announced its health costs were expected to increase by $500 million in 2014 due to its workers signing up for its health-insurance benefits at a higher rate than expected.
Each of these two interesting pivots on the retail medicine model represents a sensible shift to a now-proven disruption.
The first is from Wal-Mart. They now own health care clinics and can “roll back prices” like they do with everything else. The second is with GuideWell Emergency Doctors. They are looking to steer health plan members to lower health care costs and create savings for the overall health plan.
So whether born out of customer demand or internal cost pressure, both business model pivots look like smart market opportunities. However, the team at imagine.GO feels the GuideWell Emergency Doctors model misses out on the opportunity to drive demand for the health plan due to its naming decision. But either way, we applaud both innovative efforts and look forward to seeing them each succeed in:
1. Improving consumer experience yielding an informed decision maker aligned to their risk and reward;
2. Increasing access to necessary care through an engaged delivery system; and
3. Reducing the aggregate cost of care, with a market-driven, balanced incentive and reward model.
In today’s retail world of health insurance, are you taking advantage of opportunities to engage with and provide exceptional service to your customers and potential customers?
I encourage you to join me in Phoenix next month at AHIP’s Consumer Experience Forum, Nov. 19-20 (www.ahip.org/Conferences/CEFThreeNov2014) to discuss this and more. The Forum brings together thought leaders from plans, researchers, consultants and leading companies to help you optimize your strategy for converting consumers into customers for life. I’m pleased to be moderating this conference, and I can tell you from experience that it will be a highly engaging and informative event.