By Dr. Seleem R. Choudhury
An entrepreneur notoriously lives by accepting the risks of a new idea or venture with the possibility of enjoying the rewards. The business world is full of entrepreneurs bringing innovative solutions to problems and increasing profits for businesses. The healthcare industry could harness that entrepreneurial approach, not merely to make a profit, but to improve health outcomes for our patients and invest in our communities.
The healthcare industry is always evolving and for many years has been fertile ground for business ventures, which has only been further heightened with the rapid changes brought on by COVID-19. Healthcare is facing major challenges to both the business and clinical sides of care. Entrepreneurs have been involved in healthcare for many years. This article encourages and permits people to adopt an entrepreneurial attitude and approach to the healthcare environment and develop ground-breaking solutions that the industry desperately needs in a post-COVID world.
Making profits, re-investing in improving health outcomes
Most healthcare professionals chose their career path because they have a genuine desire to care for others and help them improve their lives. For that reason, talk of infusing the healthcare field with an entrepreneurial spirit can sometimes fall flat, as people fear that the entrepreneur will make lots of money and then run straight to their bank account. There's room for care and entrepreneurism. You can wear the entrepreneur hat without being "dirty" or betraying your profession or your intent to care. The ethics are about what you do with the money you make in the healthcare enterprise.
Entrepreneurism is merely setting up a new business venture and taking financial risks in the pursuit of success and profit. In the case of healthcare entrepreneurs, profit can be redefined to mean improved health outcomes, quality, or even a process of re-investing money made back into the community or new ventures to continue to improve health. It doesn't have to mean more money in the bank; rather, it could mean more money to give care.
For example, if an entrepreneur launches a product that more effectively screens for diabetes, they can bill insurance for this use of this screening tool and make money from it. Rather than putting all of this money in the bank, healthcare entrepreneurs would be committed to using that money to start nutrition programs, educate the community on the risk factors and prevention of diabetes, or additional services for those with diabetes. This enables health entrepreneurs to have a long-term impact on the aspect of health that they are trying to change.
Authors in the healthcare industry are already discussing how a formalized implementation of an Innovation and Entrepreneur (I&E) educational curriculum in medical school and residency programs can stimulate a culture of change and growth (Niccum, Sarker, Wolf, & Trowbridge, 2017). The value of an entrepreneurial approach to healthcare's many challenges is beginning to be embraced in the classroom, and it could catalyze the notoriously slow-to-change (and stay changed) healthcare industry.
The case for entrepreneurism in healthcare
Healthcare is a business.
Healthcare in the U.S. is a sector, from pharmaceuticals and devices to health insurers, clinics, and hospitals. Patients, especially those with means, are willing to pay almost any price for treatment, allowing many companies in the sector to earn high margins. According to the Center for Disease Control, in 2017, the total national health expenditure was $3.5 trillion (Maddox, Bauchner, & Fontanarosa, 2019)
In America, unlike in other parts of the world, it seems acceptable—expected even—to make money in the healthcare sector. And if you can make money doing it, it becomes a business. And if it's a business, then there's space for people with an entrepreneurial mindset. This attitude doesn’t have to be a for-profit venture; rather, the money can be used to re-invest in areas that can overcome the issue that caused the health problem or even to mitigate community health disparities.
The healthcare environment is extensively regulated, which unintentionally creates an atmosphere of either constant change without permanence or slowness to change. Anything new has to be rigorously tested because of the high stakes of patient and community health. However, I believe there is plenty of room for entrepreneurialism in the business side of healthcare. In the business world, every industry has entrepreneurs creating new technologies and innovative approaches. Why should the business of healthcare be exempt from that? There is room for health entrepreneurs to bring creative solutions to the healthcare sector's challenges.
Amid the COVID-19 crisis, hospitals and other health establishments are taking a huge financial hit. There's an urgency to mitigate costs, make more money, and improve efficiencies in operations and clinical care. Entrepreneurs by nature are able to offer solutions to these problems by being disrupters and thinking about how to solve these issues.
Entrepreneurism can offer solutions for healthcare's supply and demand crisis.
The American healthcare system is dealing with a serious supply-and-demand crisis. Supply-and-demand is the fundamental principle behind free market capitalism. It's the backbone of economic prosperity. This is already being leveraged within healthcare with insurance companies and drug manufacturers.
The demand for care is increasing exponentially due to a growth in the consumer base, a population that is aging, and a health marketplace that is changing (Navarro, 2017). Meanwhile, the supply of appropriate care is insufficient (Douthit, Kiv, Dwolatzky, & Biswas, 2015). In healthcare, it’s referred to as access to health care. This access bottleneck could be to primary care, hospitals, specialties, skilled nursing facilities and so on. Can people and the communities within which they live get the care that they need? Healthcare costs for consumers are also steadily rising, and patients are becoming increasingly dissatisfied with the care they are receiving. It could be perceived that the industry is on the verge of a breakdown—or a transformation.
Supply-and-demand fuels entrepreneurism. It wouldn't exist without this principle. It makes sense that we take on an entrepreneurial mindset in our efforts to increase access to care while decreasing costs to improve the lives of our community. Healthcare entrepreneurs, when guided by the goal of improving health, can make money and re-invest in the community or the next idea they are introducing to address health challenges.
Healthcare and entrepreneurism operate within a system with risks and rewards.
Healthcare is moving away from the payment model of providing care and subsequently billing for that care. Now, we are seeing a payment model based on rewards and penalties (Nuckols, 2017). If it can be demonstrated that the method is positively impacting someone's health, the process is rewarded by the insurance company. Conversely, if health outcomes aren't improving for patients, insurance companies can issue a penalty (Hauswald & Sklar, 2017).
Entrepreneurs already swim in this water of risks and rewards. If their ideas work, they get rewarded with profits; if not, they are penalized by loss of capital or investment. They can enter the healthcare entrepreneurism space already accustomed to the environment and pressures that healthcare organizations are facing. If they are able to help move the needle on a community health problem, they can receive a premium amount of money. If they can make more money, it allows them to re-invest in other areas that aren't seeing as much health impact or progress.
Entrepreneurs discover a more effective use of data.
Modern healthcare relies on technology (Dash, Shakyawar, Sharma, & Kaushik, 2019). The Affordable Care Act mandated the healthcare industry to start collecting data. This data is essential, as it allows us to look at health outcomes along demographics lines, by zip code, and between white-collar and blue-collar patients, to name a few examples. It provides a greater understanding of what is happening, what can be done, and the impact of what has been implemented; it’s a tool for measuring success and highlighting what needs to be done. Data revealed the social determinants of health. Specifically, we learned that a poor outcome is often associated with where people are born, grow, live, work, and age. The health entrepreneur would invest in solving these issues (Satcher, 2010).
Successful entrepreneurs must predict the future, meaning they find out what is needed tomorrow, then supply it. Entrepreneurs rely on their "gut," but they also rely on data. Entrepreneurs are adept at interpreting and applying data to get insights into solutions for challenges in the business world. This can be done in healthcare if we would embrace an entrepreneurial approach to our issues.
As we enter a post-COVID-19 world, healthcare will face significant changes as we experience the biological, psychological, and economic ripple effects of the pandemic. To navigate these changes successfully requires someone who can read the landscape, embrace change, and introduce, disrupt, and transform the status quo.
Entrepreneurism in healthcare isn't a dirty profession, nor is it just about making more money; it's about discovering a new approach to improve the health of our communities. Entrepreneurial-minded healthcare professionals are looking to change the sector by using the skills of a business-minded entrepreneur to create better access for our patients, reduce costs, and sustain or improve the quality of care to the satisfaction of the patient and their family. Supporting an entrepreneurial approach to healthcare and fostering its success, has the potential to create a cycle of improved health outcomes and re-investment of profits in community programs and innovations that can lead to sustainable improvement in the health of entire communities.
Resources:
Dash, S., Shakyawar, S. K., Sharma, M., & Kaushik, S. (2019). Big data in healthcare: management, analysis and future prospects. Journal of Big Data, 6(1), 54.
Douthit, N., Kiv, S., Dwolatzky, T., & Biswas, S. (2015). Exposing some important barriers to health care access in the rural USA. Public health, 129(6), 611-620.
Hauswald, E., & Sklar, D. (2017). Will the" Fixes" Fall Flat? Prospects for Quality Measures and Payment Incentives to Control Healthcare Spending. Southern medical journal, 110(4), 249-254.
Maddox, K. E. J., Bauchner, H., & Fontanarosa, P. B. (2019). US Health Policy—2020 and Beyond: Introducing a New JAMA Series. Jama, 321(17), 1670-1672.
Navarro, R. P. (2017). Changing the way we pay for health care: is value the new plastic? Journal of managed care & specialty pharmacy, 23(10), 998-1002.
Niccum, B. A., Sarker, A., Wolf, S. J., & Trowbridge, M. J. (2017). Innovation and entrepreneurship programs in US medical education: a landscape review and thematic analysis. Medical education online, 22(1), 1360722.
Nuckols, T. K. (2017). With the Merit-Based Incentive Payment System, pay for performance is now national policy. Annals of Internal Medicine, 166(5), 368-369.
Satcher, D. (2010). Include a social determinants of health approach to reduce health inequities. Public Health Reports, 125(Suppl 4), 6.