How Disruptive Business Models Can Transform Healthcare
By Matt Eyring
Health care is the country's economic black hole, rising from about 13% of U.S. GDP in 1999 to 18% in 2009. By 2025, it is projected to soar to 25%. Legislation and regulation can only go so far in fixing the system, and new technology can't do much on its own. To truly combat health care's cost challenge, the focus must shift to disruptive business models--innovative ways of delivering existing treatments at a much lower cost.
While new business models are needed across the spectrum of healthcare, many impediments prevent new ideas from taking root. Barriers stem from the fact that health care in America doesn't function like the free market. For instance, consumers rarely pay directly for their own care, so there is little incentive for making trade-offs such as choosing something cheaper that costs less. The regulatory environment often doesn't allow inexpensive solutions to make it to market. Finally, there are mismatched incentives: hospitals want patients to get that operation, but insurance companies don't.
Given all that's standing in the way of enabling new business models, we must take note when promising ones appear ready to take off. Qliance Medical Management is one organization leading business model innovation on the care delivery front. The Seattle startup is disrupting the insurance and primary care market by simply not accepting traditional policies. Patients enroll directly at primary care facilities, paying a $60 to $120 monthly membership fee (depending on their age) for unlimited services.