In preparing for our upcoming Client Bombora, I have been reviewing the Innovator’s Prescription and discussing key components of the model with co-author Jason Hwang, MD. The Innosite Group has made some good progress since the original publication (2007) to more clearly articulate and further refine the model. A new graph that is part of their standard deck shows the three elements required for successful disruptive innovation.
Working within this framework, I’ll try to describe its application to healthcare in general, and to Crossover’s current business specifically:
Enabling Technology. Typically “discontinuous” innovation is a result of some major change—most often a technological advance and less often a new process or unique bundling that creates value. We have seen this several times in healthcare where an entirely new specialty is created (endoscopic surgeries, interventional radiology, etc) or when new software applications are introduced (DNA sequencers, algorithms, and can’t wait for VR in several areas of medicine!). At Crossover, our enabling technology is singularly focused on the new platform (XOP). Building on eight years of experience with Sherpaa, but with the freedom of a clean room implementation, we believe XOP will be a game changer not just for expanding our reach through virtual care, but more importantly, for enabling a much more expansive business model as well.
Innovative Business Model. As the enabling technology pushes the service limits, new business models that capture the newly-created economic value can be implemented. These often translate into new ways to pay for the services, typically as a result of greater efficiencies, more effectiveness, and a better experience in capturing a larger percentage of the value creation economics. Examples of this may include moving to PEPM models (anything but fee for service), leveraging information asymmetry (“where there is mystery there is margin”), or other pricing configurations for bolt-on or bundled services. We anticipate our employer clients will continue to become more sophisticated and will expect more fixed-fee and risk-adjusted contracts in the future. We also believe a more direct payment model will be utilized, and we intend to capture the value we create by organizing, coordinating, and curating high-value care. Our new platform will have multiple areas where we can both create and capture value.
Coherent Value Network. Perhaps most exciting to me is the opportunity to create network effects among and between our clients. Every one of the clients who join the XO network is another health activist “node” going live. Every employer who buys into the Connected System of Health contributes to the “hash power” of a growing national network of health activist employers engaging at the deepest level of impact—actual care delivery. We are also seeing the value of collaboration across clients—where new programs and services are rolled out, lessons can be learned, and best practices across the network can be shared. We now have an entire fleet of nearsites, and just like “over the air” updates, we are constantly upgrading the experience, workflows, and technology between and among sites. The power of the network is to see accelerating value as more and more people join.
When working together, these three elements form an interlocking set of concepts that successfully unlock the power of disruptive innovation.
Scott Shreeve, MD 