rethinking the hospital - value of business models for hospitals
DESCRIPTION
Master thesis presentation of Maarten den Braber about the value of business model theory for hospitalsTRANSCRIPT
Rethinking the hospitalThe value of business models for hospitals
Master thesis Maarten den Braber ([email protected])
What is this presentation about?
• Strategy
•Hospitals
• Value
• Business model
Value ! delivered !
Customer!preferences !
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
value!creation!
implementation!value!
appropriation!
Business model
Market!segment!
Question: what is important for you?
Running a hospital is a balancing act
4
Pressures are rising
Demand-sidedemographics
disease patternspublic expectations
Supply-sideknowledgeworkforce
Societalfinancial pressures
internationalizationglobal R&D
Zero-sum competition
•No value is created
•Competition is about shifting costs, increasing bargaining power and competition to capture patients
• Escaping through value-based strategy
Porter & Teisberg (2006)
Reactive behavior is not enough
Field research: 11 interviews - 2 sessions
What issues? 5 examples
• Specialized medical care considered core business
•Decisions often supply-driven
• Scale and scope important decision criteria
•Governance structure complicated
•What are reasons for success and failure?
Current literature: boxed solutions
•Darzi (2007)
•MacKinnon (2002)
•McKee & Healy (2002)
•NVZ vereniging van ziekenhuizen (2000)
Darzi as example: 6 boxed solutions
But “one size does not fit all”
How to build your specific hospital?
Strategy helps determine direction
Value-based strategy?
Value is defined by attributes
•Viewed from the customer perspective
• Spans the complete process
•Delivered through a sustainable process
Value-based strategy requires balance
Outside-in: customer preferences
Inside-out: organizational preferences
Models help solving complex problems
Value ! delivered !
Customer!preferences !
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
value!creation!
implementation!value!
appropriation!
Business model
Market!segment!
Business model: build strategy
•Comprehensive
•Coherent
• Structured
Value proposition: core functions
•What (and for who), where, how and when?
•What are your core functions?Curing sick people or keeping people healthy?
•Who are your stakeholders?Patients, family, physicians, nurses, insurers, ...
•Who is your customer?
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
!
Current value proposition: different?
Market segment: define potential
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
•Who and how many?
•What defines your market?Geographic region, specific illnesses?
•What is your market potential?Market size, share, volume, growth, ...
Strategic position: link with environment
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
•What is inside and what is outside?
•What is our position in the value chain?Who comes before, who comes after?
•How do we balance scale and scope?Compete, collaborate, collaborate to compete?
•What is our governance structure?Who runs the organization, what are the dependencies?
Health care value chain
Value chain: exchanging value
•How to structure processes?
• Link value exchanges to the core functionsDoes the exchange add real value?
•Optimize the value chainLean management, TQM, Six Sigma...
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
Competitive strategy: stay ahead
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
•What is your advantage?
•Tools and techniques already availablePESTEL, SWOT, 5 forces, ...
•Non-profits need competitive strategyJust as for-profits organizations do
•Current: quality is medical-technical qualityWhat other types of quality are possible?
Quality can be many different things
Cost structure / revenue potential
Value!proposition!
Strategic!position!
Value!chain!
Competitive!strategy!
Cost /!revenue!
Market!segment!
•Make your activities sustainable
•Cost and revenue mean more than accountabilityInvestment needs, projections, variable/fixed costs, ...
• Balance your service portfolioProfit centers versus cost centers
•Tools: do not reinvent the wheelBCG matrix, GE matrix, ...
Business model: strategy building tool
Comprehensive. Coherent. Structured.
Business model and the hospital
•Does it fit? (suitability)
•Will it work? (feasibility)
•Will it be used? (acceptability)
Suitability: does it fit?
•Makes decision-makers smarter
•Aligns with organizational specifics
•Makes knowledgeable about succes and failure
• Possible to test current and analyze new scenarios
Feasibility: will it work?
•Not easy moving away from established policies
• Business model helps building and connecting logic
•Many tools available already that can help
• Strategic mindset in the whole organization is needed
Acceptability: will it be used?
•Again: not easy moving away from established policies
• There is willingness to change
• Inclusive ways are an addition to current methods
• Business model reduces complexity
Conclusions about the business model
• Business model makes decision makers smarter
•Comprehensive. Coherent. Structured.
•Aligns well with the organization
•Needs effort and time to be implemented
•Delivers value... for customer and organization
Remember this?
With the right tools
We can build this!
!
And now...