9 years ago, Marc Andreesen wrote that “software is eating the world.”
Perhaps software has already digested its meal, and now platforms are getting hungry. Multisided platforms have quickly become today’s dominant business model, disrupting industries and fundamentally changing how business (and much of life) gets done. Look down at your smartphone and you’ll likely see apps for no less than a dozen platform-based businesses (not to mention that the 99% of smartphones in this country that are iOS or Android-based, which are platforms themselves). Amazon connects suppliers and consumers. Uber and Lyft connect drivers and passengers. AirBnB connects hosts with guests.
Multisided platforms create substantial value by facilitating an efficient exchange of information, goods, or services between users. A number of factors impacting just how much value a platform ultimately delivers — including how well the platform is managed, and the various ways in which each type of platform achieves and experiences network effects, which broadly refers to the fact that the more users you have on a network, the more value that network will derive.
Opportunities For Platforms In Healthcare
The healthcare industry is particularly ripe for platforms to add value. Healthcare involves coordinating care, information, financing, and payment among a highly fragmented set of constituents (payers, employers, people, and many, many different parts of the care delivery system).
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The ability to coordinate care and make timely, effective decisions is frustrated today by the complexity that fragmentation brings. Currently there is often a tremendous amount of information asymmetry between different constituents – think of the difference in knowledge and agency between a doctor and the average patient (one-third of whom have limited health literacy) facing a new diagnosis. Conflicting or competing interests (often financial) between constituents complicates things further; for instance, payers employ utilization management tools to try to reduce inappropriate use of high cost tests, procedures and prescription drugs, while doctors want to get their patients timely care and spend their time providing care (not processing paperwork). Beyond these challenges, there are technology systems in place that are woefully out of date, lagging behind the rest of our economy by a couple of decades.