In healthcare, that could take the role of capturing diagnostic power and essentially controlling the patient journey and controlling doctor access to the patient journey based on that data.
What are the differences between platform economy and traditional business models?
The platform economy refers to the sum total of social and economic activity that is mediated by digital platforms. Digital platforms are different from traditional business models. Traditional business models are what I call pipelines, which create a product, ship it down, and provide it to the end user. Digital platforms create an infrastructure which allows external parties to come together and create and exchange value with each other.
Now, the reason this is important is because in a traditional pipeline economy, your ability to create value was restricted to your access to resources and to labor internal to the company. In the platform economy, your ability to create value is determined not by the sources internal to you, but by your ability to leverage resources external to you, which means that you now benefit from what is called demand side economies of scale.
How can healthcare benefit from platform economy?
Healthcare is uniquely positioned to benefit from the platform economy. And to understand that, we need to think about the healthcare value chain. There are three distinct positions where platforms can come in and add value. For the physicians and the doctors, platforms can create diagnosis augmentation. They can provide infrastructure that can help doctors make better diagnosis and perform surgery better. Closer to the patient, platforms can serve as a way to act as a custodian of patient data in an aggregated format. And in between the two ends of that spectrum, as healthcare APIs increase, platforms can create a strong integration role in resolving these healthcare APIs across the ecosystem.
What are the risks of platforms entering the healthcare market?
There is every likelihood that platforms entering healthcare could lead to the same data monopolies that we’ve seen in other sectors. And the reason for this is that platforms capture value by extracting and capturing data and creating monopolistic control over data at scale. This is even more important in healthcare because a significant amount of value created in healthcare is created through data-driven diagnosis and data-driven patient care. So platforms are in every way incentivized to capture data as they enter healthcare and to create large data monopolies.
The counter to this is to ensure that on the one hand, we create the right regulatory forces to counterbalance these kinds of risks, but more importantly, ensure that alternatives like creating public infrastructures are set up in a way that innovation is not restricted because of this regulation. So in order to counter digital platforms, we need a combination of both of these aspects.
In the future, who will control patient flows?
I believe it is very conceivable that future patient flows will no longer be controlled by traditional healthcare institutions. As the world gets more connected, we need to realize that healthcare today is very fragmented. Patient data itself is fragmented across different institutions. Naturally, as the world gets more connected, we would see more of concentration of this patient data and more of interoperability. So at this point, we have two choices, whether it’s large multinational companies that will enable that interoperability, or whether it is public digital infrastructures that we create that will enable that interoperability across different systems.
Sangeet Paul Choudary is author, advisor, and Founder of Platformation Labs and he is a prominent advocate of individual rights in the platform economy. His best-seller “Platform Revolution” is a Forbes “must-read”, his work on platform economy is ranked among the top 10 strategy articles published in the Harvard Business Review. He is ranked a top business thinker by Thinkers50 Radar (2016) and Thinkers50 India (2015). For his contributions to the field of platform economics, Choudary was named a Young Global Leader by the World Economic Forum in 2017.