Open and Collaborative Innovation in US Healthcare: The Case of Health Insurance Exchange (HIX), Sudeep Krishnan, IIM Ahmedabad (IIMA), ICEIM 2014, Durban, SA, Conference Presentation

Dr. Sudeep K. Krishnan

Open and Collaborative Innovation in US Healthcare: The Case of Health Insurance Exchange (HIX)

Roadmap

INTRODUCTION – Literature Review and Gap AnalysisINTRODUCTION – Literature Review and Gap Analysis

US HEALTHCARE AND HEALTH INSURANCEUS HEALTHCARE AND HEALTH INSURANCE

OPEN INNOVATIONOPEN INNOVATION

RESEARCH OBJECTIVES & METHODOLOGYRESEARCH OBJECTIVES & METHODOLOGY

CASE STUDY – HEALTH INSURANCE EXCHANGECASE STUDY – HEALTH INSURANCE EXCHANGE

IMPLICATIONS AND FUTURE RESEARCH IMPLICATIONS AND FUTURE RESEARCH

NETWORK AND COLLABORATION ANALYSISNETWORK AND COLLABORATION ANALYSIS

Introduction to Open Innovation Traditional/Closed Model – Emphasis on organizational

control for success of innovations Competitive advantage by funding large projects

Open Innovation – A paradigm that assumes firms should use internal as well as external ideas and paths to commercialize their technology Chesbrough (2003)

Current Research on Open Innovation Studies limited to conceptual foundation development based on

limited empirical evidence Current studies look at principles, individual drivers, and benefits of

open innovation

Measures of Openness – Extent of Usage of External Sources Partner characteristics (Type and number) Phase openness Intensity of collaboration

Context of Open Innovation Required Conditions

There exists co-operation between firms and other agents in the network

The objective of co-operation is creation, adoption or development of something new to the organization that essentially involves a market.

Open innovation refers to actual partnerships and is not limited to cooperation (for longer periods normally, shorter periods may also exist).

There is a permanent or quasi-permanent investment in the relationship by all partners.

Current study analyzes degree of openness and understands operationalization aspects of open innovation principles in US Healthcare Sector Partnership as need of new reforms

Introduction to US Healthcare and Major Players HealthCare reforms in US

Reduction of Cost and Quality of Care

Obamacare – Affordable Care Act

Major Players

5

Research Questions & Methodology

What is open innovation in the US Healthcare Context and how open innovation principles differ from the traditional models of innovation?

How open innovation principles are operationalized in Healthcare projects?

How does partner selection and opening up of organization boundaries happen in such contexts?

Case Analysis of Health Insurance Exchange (HIX)

HIX - Introduction HIX helps citizens

compare health insurance plans online,

select a plan,

apply for subsidies intended to make health insurance more affordable, and

receive verification of enrolment in a plan.

Requirements Handle the needs of two distinct marketplaces—individuals and small

employers (businesses)

Provide assistance to purchasers

Facilitate applications for the premium tax credits and cost-sharing subsidies offered under the ACA

Provide individuals with access to other health benefit programs (such as Medicaid) through a “no wrong door” approach to coverage

Certify that health plans meet benefit standards

Network and Collaboration Analysis

Rationale to Collaborate Formation Stage

Exchange Characteristics – Basic structure itself calls for collaboration (Federal and state government, insurers)

Environmental Factors – Potential market, complementarity of partners, transaction costs

Reforms Characteristics – ACA calls for insurance and government bodies are bound to create exchanges

Network and Collaboration Analysis

Partner Selection Basic structure itself calls for partnership

Insurance companies, federal and state government

Payer and Patients

Proposed New Partners Providers – provision to access insurance policy by provider

directly

Analytics Partners – help in plan selection, cost benefit analysis, online platform support

Network and Collaboration Analysis

Execution Development of online models, tools and platform for

analysis and plan selection

Desired project management

Identifying environmental risks

Control over processes (investment requirement from partners and identifying roles and responsibilities)

Contributions

Contributions to Open Innovation Literature Understanding basic concepts in a new domain

Exploring operationalization aspects of open innovation across a project and identifying factors influencing its

Guidelines for Practitioners Identification of prospective partners

Results will have high impact on HIX implementation

Future Research Simulation Model: US census data and predictive model

for usage statistics and exploring cost

Influence of credit feature

Linkages with other policies and coordination of benefits