Network Effects in the Healthcare Industry
The network effect is taking place in the healthcare internet slowly by surely as a growing platform of providers and patients is connected node-by-node through various forms of technology. Three dimensions of the network effect are set to transform the healthcare sector: administrative automation, network knowledge, and resource orchestration.
Administration automation is the process of organizing, scaling, and automating administrative details. This results in a minimization of the risks of miscommunication and potential errors. Currently in healthcare, the average doctor spends 60% of her time actually seeing to the care of patients and documenting their health details, 40% dealing with administrative documents, lab orders, etc. A network based system will be able to tackle administrative issues such as claim submission and become more sophisticated with feedback from the network. In terms of network knowledge, the healthcare sector benefits from patient data being set free from system that are generally more isolated and instead being added to networks, where value can be generated from the data. Resource orchestration, especially where there is excess capacity, can generate market demand. For example, approximately $750 billion resources are wasted annually, where 40% of hospital beds are empty, or how even when appointments are shown as “booked”, a smaller proportion of all slots are actually used. The network effect in the healthcare sector is working to solve for this in platforms such as Candescent Health, which is making radiology scans virtual so that even a child in a rural Wyoming town is able to have the best radiologist look at his lungs.
https://hbr.org/2016/11/bringing-the-power-of-platforms-to-health-care