01Nov '12

Applying Blue Ocean Strategy to the Foundation of Accountable Care

American Journal of Medical Quality

Theme: Commentary that argues for applying blue ocean strategy to the challenge of redefining health care delivery.

Summary: The authors’ premise is that health care leaders should apply blue ocean strategy to redefine and optimize health care delivery. They note that the current configuration for health care delivery is flawed and that the industry has clearly identified areas of underperformance: overutilization, avoidable readmissions, poor communication, high infection rates, and service fragmentation. They suggest that the strategic imperative for the industry is to anticipate future competitive forces and create new markets. This commentary argues for applying BOS to determine which factors that the industry currently competes on should be eliminated and reduced and which factors should be raised and created to open up new market space and create a leap in health care performance. The article also cites examples of strategic moves like telemedicine programs for behavioural health; single stay rooms, where a patient remains in one room for the entire hospital stay to reduce overall stay and increase patient satisfaction; innovative web-based administration solutions like Hello Health; the prepaid gift card, Highmark, which can be used like a debit card to pay for health-related expenses; and InstyMeds, an ATM-style dispenser of prescription medications as emerging examples of accountable care that have created uncontested market spaces by focusing on new health care consumer demands. The authors suggest that other similar blue ocean strategic moves can be conceived by applying the Four Actions framework to reduce costs while driving up value and creating new demand.

Reference: Welch, Shari J. and B. Edmondson. "Commentary: Applying Blue Ocean Strategy to the Foundation of Accountable Care." American Journal of Medical Quality 27 (2012): 256-257.
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