Tuesday, October 11, 2011

Healthcare value chain

Given the complexity of the healthcare industry, it is a bit complicated to devise a value chain based stack model for the industry. This in part stems from the fact that the information flow is across different layers and not linear. We try to visualize the industry in two perspectives. First, based on care and second, based on Information flow.

Care Stack:

As far as care is concerned, the first step in the process will be the discovery of drugs through biological / molecular research. This research is then taken forward by the Bio-pharma companies. Medical devices such as Diagnostic devices, Information recording devices (ECG), etc can also be seen in this layer of the stack. This is then passed on to the patients through the providers. The position of the payers could be a bit complicated since they cannot be visualized as the consumers of the service or care. However, they play a critical role in facilitating the care delivery to the patients. Thus, the stack can be visualized as below.

Information Stack:

Having tried to understand the industry from the care delivery perspective, we tried to map the information flow in the industry. The firms we have chosen fit into multiple layers on this stack. However, we would be concentrating on products specific to one or more layers in the stack.

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