Saturday, May 28, 2016

How Health Care Can Learn From Blockbuster

In the article “Competitor Analysis:  Understand Your Opponents, ” I found the initial example interesting (entertainment options ) but even more notable is the subsequent bankruptcy of Blockbuster in 2013.  The failure of Blockbuster to predict – or at least react to – the ride of Netflix   - was another excellent example of poor strategy related to competitors.  If Blockbuster had considered Porter’s Five Frameworks, it may have been prepared for the threat of new entrants, but more importantly the threat of substitute products or services.  Blockbuster failed to foresee that the Netflix model was much more appealing to the general public, and by the time Blockbuster introduced an imitation model it was too late.

There are similar threats in healthcare, the industry in which I work.  In the past century the family physician has been the cornerstone of a patient’s health care in all ways – from preventative are to oversight of hospital admissions and all things in between.  With the rise of the hospitalist model (physicians who only work as the “acting” general medicine physician for patients in the hospital), many PCPs have opted to surrender their patient rounding obligations and see patients after a hospital stay.  At the same time, competition has emerged in areas that traditional health care providers would never have imagined.  Walmart intends to be the “front door” for health care in the US and is competing head to head with traditional health care providers – similar models are found at CVS, Rite Aid, and other retailers.  Even within health care there is competition.  At my own company, the urgent care center we opened in an urban setting created unwelcome competition for the nearby emergency department.  Meanwhile the “after hours” clinic staffed by PCPs created further competition for the urgent care and ED.

Health care organizations still holding onto the traditional, patriarchal delivery models will be eclipsed by the more savvy retailers who are willing to respond to what the public wants.  Members of the Y and  Z generations are more likely to seek care only when sick, and expect quick fixes and personalized attention – including convenience and speed.  While these demands fly in the face of the foundation on which the system was built, health care providers who fail to embrace shared decision making, convenience and a personalized patient experience may very well find themselves in the same situation as Blockbuster. 

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