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Jason Hwang and Clayton M. Christensen
Disruptive Innovation In Health Care Delivery: A Framework For Business-Model Innovation
Health Affairs, September/October 2008; 27(5): 1329-1335. [Abstract] [Full Text] [Figures Only] [PDF] [Reprints & Permissions]

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[Read Comment] Disruptive Cure For The Hospital Bed Crisis
Michael Johnson   ( 15 October 2008 )

Disruptive Cure For The Hospital Bed Crisis 15 October 2008
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Michael Johnson,
Executive Director
Cogentum, Melbourne, Australia

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Re: Disruptive Cure For The Hospital Bed Crisis

michael.johnson{at}cogentum.com.au Michael Johnson

For some time we have heard media, political opposition parties, and lobby and community groups complain about the hospital bed crisis. The solution that is often put forward -- building new hospitals, commissioning new wards, creating new beds -- is not the answer. A powerful disruptive solution already exists that could do a "good enough job" while also providing better outcomes for patients, medical staff, insurance companies, and the government. In Australia, maternity patients who are progressing well on the first or second day postnatal are offered a choice of staying in hospital or being offered a truly disruptive alternative: being moved to a luxury hotel where they are cared for by a reduced nursing team. The startling truth is that it makes more financial sense to care for a mother and new baby in a five-star hotel than in a maternity hospital!

This raises a fascinating learning for the broader health care industry. It calls for a clear need to resegment patients not by their medical condition, age, or health care provider but by their needs, or specifically, the "job" that they are trying to get done. Understanding the job will drive the selection of an appropriate solution. Do they require intensive care, do they require hospital-based care, do they require respite care? The best solution may not necessarily be a bed in a hospital ward. As the aging population begins to put more strain on the health care system, the need for new and more innovative solutions grows.

By changing the focus of the problem from one of health care to one of "room optimization," multiple problems owned by multiple stakeholders have been solved. The hospital has more beds available for acute care patients. The hotel has better utilization, and the insurer minimizes payments and delivers better health outcomes. As the hotel industry starts to feel the impact of a slowing economy and tightening discretionary spending, the health care system could well provide the recession-proof income stream it will be crying out for.

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