Some argue for more competition in healthcare to drive improvements in the system. Optimizing safe, effective, and value-laden patient care is of central importance to physicians and institutions. Thus, “healthcare utilities,” such as Civica Rx, a pharmaceutical company in Utah supplying hospitals since 2018, spring up and challenge “oligopolies,” traditional markets where a few companies dominate, and business as usual is the rule.
Novel forms of collaboration are needed now to achieve innovative access and choice. Changes in the world, such as economic downturns, inflation, and the emergence of new diseases, like COVID, make disruptive punctuations inevitable. While the healthcare system is made up of many provider and health system parts, the ultimate impact of new ideas and competition will be lower costs, which benefit the consumer’s wallet. A glimpse into this cutting-edge medicine may seem vague because it is an emerging field—old technology being transformed into “new school” techno-precision.
The need is for broader and more diverse medical resources in addition to our conventionally structured systems. Healthcare is central to supporting an individual’s well-being and society’s wellness, and such an outcome should be a win-win event for all.
High stakes, high complexity, and institutional-level decisionmaking are what make up today’s conventional healthcare. Disruptive innovations in other industries already exist in non-essential consumer services. Dollar stores and Walmart offer uncluttered options with lower prices via more generic brands. These advances are characterized by low stakes and low complexity.
Disruptive collaboration is a model in innovative healthcare systems where the aims are restructuring the availability, access, and delivery of care. For example, existing companies would collaborate “collectively” to disrupt an entire existing subindustry. Thus, disruptive partnerships are sorely needed in the oligopoly sectors, such as health insurance, electronic medical/health record providers, pharmacy benefit firms, and dialysis management providers (only about five of these companies lead the U.S. market).
This initiative is not a callous competition but seeks to improve current operating modalities, notably underscoring structural, not just technological, changes. A few exist, like Graphite Health, supplying medical software to health systems like Kaiser Permanente; more are emerging, and the “Healthcare Utility Model” is one such strategy.
The Healthcare Utility Model
Utility refers to commonly shared essential services, such as water and electricity. The goal is not to service an individual or narrow customer group but to provide access to everyone at the same low cost. Because of scarce and limited resources, parsimony is essential. So, “what is the highest cost that the market will bear” becomes “what is the lowest sustainable cost that we can deliver to the healthcare market.”
This non-stock corporation model, including some private companies, has price minimization and no margin maximization as its true north. In this model, the customers and funders are the same. Four pillars hold this healthcare framework together (Dredge et al., 2022):
- Structure and ownership embrace social responsibility.
- Market positioning and scale are pro-competitive and positively cooperative.
- Financing and time horizon rest on customer funding with long-term orientations.
- Goals and contract terms focus on the common good with transparency and fairness.
Carefully deciding on the specific services to be disrupted and how change agents (i.e., physicians, organizations) carry out these changes are pivotal, and it’s important that changes can be made quickly and are achievable.
Value is a prime consideration for individual providers and institutions. Value-based healthcare focuses on the physician and all provider groups whose values are patient-centric. This clinical redesign complements the disruptive collaboration existing on a higher level of organization, policymaking, and governance.
Together, doctors working in hospitals have patient safety and the best outcomes in mind. Value-based means the return on investment based on the outcome—value and not volume—of services delivered. The value equation puts quality, safety, and the patient’s experience as the numerator, and the patient’s financial and personal cost is the denominator. Accordingly, disruptive collaboration trends and the individual providers regard value, not profit, as primary. Also, the quality of care, instead of the number of services provided, should influence financial rewards from agencies like Medicare (Ryan et al., 2017)
Healthcare’s Promising Future
Healthcare remains embedded in a 20th-century service model. COVID-19, as an unanticipated disruptor, has spurred us to rethink medicine in 2022 and beyond. Constructive competition may be needed to improve and energize it.
Physician engagement reflects a commitment to value-based organizational alignment. Physicians and healthcare systems share a common service management platform, and should be incentivized to provide the care that allows people to remain outside of the healthcare system, rather than stuck in it. It’s important to note that many private insurers are following Medicare’s lead when it comes to billing.
Therefore, disruptive collaboration is a critical mindset needed to compete against the pharmaceutical and medical health record oligopolies, and the “Healthcare Utility Model” is one conceivable vehicle. Value for all stakeholders reduces frontline pain points and promotes resource optimization by creating broader access and affordability.
Healthcare’s prime goal is value rather than profits and shares, both clinically and administratively, and value to the patient should be the driver compelling change.