Reaching across the value chain: how novel collaborations can accelerate healthcare innovation
The business of healthcare is changing.
As the economic and payment models that defined the industry in the 20th century become increasingly unsustainable, new models focused on delivering value to patients — rather than billing for procedures — are taking root. This fundamental shift in the way healthcare companies are expected to do business, along with extraordinary advances in technology, have introduced both complex challenges and promising new opportunities for healthcare.
At the root of both of these challenges and opportunities are questions about value: How is value defined? Is this value distributed fairly? How can we measure it? How can we deliver value to patients outside the physical walls of a healthcare setting in a financially sustainable way?
Perhaps as a result of these changing dynamics, we are also seeing new, and sometimes surprising, partnerships emerge: Aetna and CVS; Amazon, Berkshire Hathaway and J.P. Morgan Chase; and Humana and Amgen — just to name just a few.
To tackle the big questions about value, these new types of partnerships require expertise and, importantly, data that is greater in scope than what any one stakeholder currently possesses. Innovation in this new environment means collectively reaching across the value chain, developing mutually beneficial data-sharing agreements and rethinking how information can be combined in new ways to generate new insights that can foster the development and delivery of sustainable solutions.
Through MATTER’s conversations with healthcare startups, corporate innovators, and clinical and research scientists, we’ve started to see patterns in what separates successful partnerships from the rest. What follows are four components for building a strong foundation for your healthcare collaboration.
1. Partners must be clear about the value they are looking to create and deliver for their patients, as well as their stakeholders, and must align on how the collaboration accomplishes that goal.
The most productive and innovative collaborations are built on a clear, shared understanding and internal consensus around the need to define, deliver and ultimately capture value in new ways. Partnerships that enable this mission extend well beyond a simple vendor-to-customer relationship. Rather, these partnerships promise to create fundamentally new areas of value for their organizations, and can shape future offerings that have the potential to positively disrupt care and generate real competitive advantage.
2. Partnerships that cut across healthcare sectors require an ability to translate ideas and value-drivers into a common language.
Partners within different healthcare sectors (or even other industries) have historically struggled to speak a common language. For example, healthcare partners often struggle with Agile, the development methodology commonly employed in high tech. In turn, technology partners don’t necessarily understand the regulatory requirements and constraints that restrict technology development processes and end products in healthcare. Overcoming these barriers is no small challenge; they too often lead organizations to miss seeing opportunities outside of their respective sectors and impede collaborations before they even begin. Being transparent about each partner’s strengths and innovation capability gaps allows for better alignment throughout the life of the partnership, and increases the odds of a collaboration’s success.
3. Data is king: Collaborations that are built on shared access to relevant data, and that promote robust and creative analysis through strong data science, have the greatest potential to illuminate novel solutions.
After agreeing upon shared goals (clearly articulated in a common language), the next step is creating a joint understanding of the data types, sets and combinations that will be most relevant to the problem at hand. From our perspective, the actual implementation of data science technologies is not the limiting factor. Instead, identifying (and agreeing to) the types of data that are most important can often be the biggest hurdle to value-focused collaborations.
4. To move from insight to action, collaborators must think creatively about how their solutions are tested and implemented and, importantly, whether these new solutions fit within existing lines of business or require new models altogether.
Armed with insights, successful collaborations can be structured in multiple ways to translate learnings into new innovations and, importantly, into action. From pilots to sponsored research and co-development ventures, collaborations that focus on rapid iteration, prototyping, testing and continual market validation are the ones best equipped to adapt quickly to customer needs — and, thus, most likely to succeed in the marketplace.
Innovation isn’t solely the domain of technology; companies and collaborators need to be ready to evolve business models, too. Too often, companies mistakenly judge the success of a collaboration by the resulting solution’s ability to fit neatly within existing channels, capabilities and business models — when, in fact, the larger value may be found in innovating the business model itself.
Tackling each of these pieces in an intentional and methodical way will help ensure that collaborations are grounded and executed in an optimal way, and that the resulting solutions deliver value to both patients and business stakeholders.