learnings thus far on modelH
Kevin Riley, one of our very own iStart Jax board advisor and an influential person in the start-up community here in Florida, has been working on a way to create better healthcare business models. His project which he calls modelH is an open-sourced collaboration between healthcare thinkers from across the world to create a business model canvas specifically designed for healthcare. The goal is to help entrepreneurs and legacy businesses create sustainable business models that create positive consumption experiences, improve care delivery, and align and control costs. The results will be compiled in a book to be released in 2014.
We interviewed Kevin about his project and the learning’s he has found thus far? - Editor, Sheena Koshy
Question: What problem are you trying to solve?
Great question Sheena. I am probably more positive on the state of healthcare than some. To me, the American healthcare “ecosystem” in its basic form operates along 3 themes: care consumption, care delivery, and care financing. These “domains” are actually interdependent points of interaction along a value chain of healthcare. To impact one point, you really impact them all.
I also understand, and advocate for, healthcare as a business. Wonderful things can happen when a market economy stimulates innovation. But from my vantage point, having started and helped start several disruptive healthcare companies, the problem is that very few people in the healthcare business create good business models – ones that are considerate of all three points of view so that a shared sense of value is created.
Most importantly to me, no one has come up with a framework to make this easier.
In my opinion the system is not so much broken as made up of working parts not working together. I am an avid student of the game when it comes to both business building and healthcare. Over the years, I have been heavily influenced by people like Michael Porter, Clayton Christianson, Eric Reis, Steve Blank, and Alex Osterwalder. I have essentially taken their teachings and combined it with my own experiences and needs to come up with a business model canvas for healthcare. I believe that by helping entrepreneurs and business people think of their ideas in terms of defined healthcare business building blocks, we can better evaluate and build business ideas into an aligned ecosystem that is both market-driven and cost conscious.
Question: Why do this ambitious project now?
Well, there is never a better time than the present. And frankly, I saw a need that was not being answered and I did not want to wait any longer to see if someone else would create one.
As it turns out, there is actually no better time than right now to try and fix the healthcare system amidst the current environment of reform. Couple this with the hyperactive climate around entrepreneurism and innovative thought and you have the right mix for success.
There are an amazing number of resources available to business idea builders, like those from our modelH inspiration Alex Osterwalder. I wish I had access to what is available today back when we launched some of our earlier disruptive healthcare models. iStartJAX is another great example of where entrepreneurs can turn to get solid advice.
Question: Who is involved?
Well, I designed the healthcare business model canvas (the things I am calling modelH) over the last 4 years during the same time I was Chief Innovation Officer for a major insurance plan and CEO of a retail health company I designed and launched called GuideWell. But I wanted to be sure it was right and I wanted to validate it through critical thinking and case studies. With the surge in crowdsourcing right now, I felt here is a way to bring this idea forward in an open sourced manner, and find like-minded and experienced people to help validate and improve upon the ideas I put forward.
So while modelH is my brainchild, I am extremely fortunate to have a considerable number of smart and innovative people helping make this a reality - including Innovation Excellence, Batterii, and a host of phenomenal healthcare thinkers from around the globe. Batterii’s CoCreation® Platform powers the project and the Innovation Excellence’s worldwide community of disruptive innovators helps to fuel it.
The team behind the modelH CoCreation Forum feels that a collaborative and systematic approach is the only means to overcome the interconnectivity barriers that exist to get past where others have failed. We believe modelH will result in a practical guide to fixing the healthcare system that all stakeholders can use to create better aligned and market-sustaining business models.
It basically works like this. On our forum, I submit a project sprint on one of the “building blocks” from modelH and we collectively work to first define how it will be addressed in the overall business model canvas, and second to how users can build it into their business idea. I then summarize our findings in the system and on our BLOG for anyone to use via the creative commons rules.
Question: What have you learned thus far?
The project is in three parts.
1. Part 1 is to define the building blocks that make up healthcare business model canvas.
2. Part 2 is where we test the canvas with new and existing business models.
3. And finally Part 3 is where I take the findings and publish them in a visual playbook for all healthcare innovators to use.
We are about a third of the way through Part 1, with about another year or so to finish the whole project. We have actually made a great deal of headway – much more than I can summarize here. But I can give you an example. It might be a little “geeky” though. Words are really important to a business model canvas – so if this does not make sense to you I suggest you read up on it more on our website at www.modelh.org.
Through our canvas we are asking all healthcare businesses to think downstream far enough to understand how they impact the patient and their care – or as we are calling it, participating in a sense of shared value. So even though a specific business model may have a Buyer who is not the actual healthcare end User, the business model does have an effect on one or all of the “value lenses” we have proposed. Through our work we wound up modifying the canvas image itself to have 3 parts within the Customer Segment block.
- a Buyer (the customer of the business),
- a User (the person who will use the product or by-product of the business), and
- an Intermediary (the person who filters, persuades, and affects User healthcare decisions).
When the User and Buyer are not the same, and they almost never are in healthcare, it splits elements of the business model into two (or more) paths. As an example, one User and one Buyer create two Customer Relationships, two distribution strategies (Channels), two Value Propositions, etc.
We feel that our health model canvas in both form and function must enable practitioners to account for 1) the overall value created and 2) multiple paths to get there. So, along with the revised image, we applied the following rules to the Customer Segment block.
- Users should always be considered an individual (consumer).
- Buyers can be the user, a business or a government.
- Users and Buyers have different driving motivations and thus different Value Propositions.
- Intermediaries act in conflict or benefit between the Value Proposition, Buyer and the User.
So far the participation and feedback have been great. To date we have about 130 community members with a few more trickling in every week as the word gets out. Thousands read our findings every two weeks as they are published on our BLOG, in the Innovation Excellence community, and through social media.
I am confident we can finish this project in good fashion and the results will be very useful to people trying to build a better mousetrap in healthcare.
Question: How can others get involved?
Thanks for asking. This is where your community comes in! People can get involved in several ways.
By joining the community forum – you join the movement to create a better healthcare system. This project is a labor of love for all of me and for the modelH team. The results are available under the creative commons rules for anyone to use. Our shared reward is pride in creating a new path forward for US healthcare. It’s an opportunity to do something meaningful that has the potential to effect change on a system that is in dire need of change, as well as to positively impact the lives of millions of Americans. We’ll also provide attribution to all contributors in the book as proof of the important role you play.
Keep in mind that this is an experimental project, and we expect some bumps along the way. If you encounter troubles, inconsistencies, or simply need clarity on how it all works, kindly let us know so we can improve the process.
Also, we will have a firm “no jerks” policy in place within the modelH forum. We want disruptive thinkers, not disruptive individuals. If you are serious about making something that will help all of us create the healthcare system we so desperately need, please join in with a heart and mind for that task. If not, please sit this one out.
You can join up by going to this link and getting started at http://bit.ly/modelH_joinup.
But before you do I suggest you read more about this project in our BLOG at http://www.modelh.org/blogh.htm.
You can also follow us online at: https://twitter.com/ModelHForum
Final Thoughts
Thanks Kevin. This is great stuff and we wish you well. We hope you will continue to share this with us and teach our healthcare startups how they can apply your modelH to their own work. We wish you the best of luck.
