Why healthcare ventures and business models in healthcare fail - Healthcare system disruption vs. system integration

Why healthcare ventures and business models in healthcare fail - Healthcare system disruption vs. system integration


TL;DR

Healthcare ventures often fail due to the challenges of either disrupting long-established systems or integrating new solutions into a complex, multifaceted ecosystem. Successful innovation requires understanding and engaging with key stakeholders, avoiding conflicts with existing solutions, and ensuring new technologies integrate seamlessly into current workflows. Collaborative approaches and long-term partnerships are essential for sustainable healthcare solutions.


  1. The Dual Path to Success in Healthcare Ventures
  2. System Disruption vs. System Integration: Two Paths, Two Challenges
  3. The Essential Role of Stakeholders in Healthcare Innovation
  4. Why Good Solutions Fail: The Problem with Parallel Systems
  5. Integration: The Key to Sustainable Healthcare Solutions
  6. Collaborative Approaches: Healthcare as a Team Sport
  7. Building the Future of Healthcare Together


Introduction: The Dual Path to Success in Healthcare Ventures

Healthcare innovation is a dynamic and complex field, drawing interest from countless entrepreneurs eager to solve pressing problems and improve patient outcomes. The attractiveness of healthcare lies in its potential to make a tangible impact on people's lives. Yet, despite the abundance of opportunities, many healthcare ventures and business models fail. This article explores the critical factors that contribute to these failures and the paths to success: system disruption vs. system integration.

System Disruption vs. System Integration: Two Paths, Two Challenges

The Herculean Task of Disruption

Disrupting the healthcare system is like trying to move a mountain. Healthcare structures have been built up over decades, sometimes even centuries, making them deeply ingrained and resistant to change. While the idea of revolutionizing healthcare is exciting, breaking through these established systems requires a tremendous amount of effort and resources.

Disrupting healthcare often means going against long-standing practices and regulations. These systems have developed over many years and are supported by laws, policies, and standards that can be difficult to change. Innovators who choose this path need to be prepared for a long and tough battle. They have to deal with bureaucracy, skepticism from healthcare professionals, and the slow pace at which change happens in this field.

The Complexity of Integration

One of the most promising ways is integrating new solutions into the existing healthcare system, but it can be equally challenging at some points. Many innovators underestimate just how complicated the healthcare ecosystem is. Successful integration demands a deep understanding of how different parts of the system work together and who the key players are.

Healthcare is not just about doctors and patients. There are many other stakeholders involved, including nurses, administrators, insurance companies, regulators, and technology providers. Each of these groups has its own interests, needs, and ways of doing things. If a new solution doesn't fit seamlessly into this complex web, it can struggle to gain traction, leading to poor adoption and eventual failure.

The Essential Role of Stakeholders in Healthcare Innovation

Identifying Key Stakeholders

Healthcare is a multi-faceted industry with numerous stakeholders. To succeed, innovators must identify and understand the roles of these key players:

  • Patients: The end-users of healthcare services who need solutions that improve their health and well-being.
  • Healthcare Providers: Doctors, nurses, and other medical professionals who deliver care and need tools that help them do their jobs more effectively.
  • Payers: Insurance companies and government programs that fund healthcare services and require cost-effective solutions.
  • Regulators: Government agencies that set and enforce rules and standards for healthcare.
  • Technology Providers: Companies that create the tools and systems used in healthcare.
  • Multilevel Relations: In each of those stakeholder groups are even more layers, for example addressing hospitals means addressing managers, healthcare professionals, IT etc.

The Importance of Stakeholder Engagement

Engaging stakeholders effectively is crucial for the success of any healthcare innovation. If key players are ignored or sidelined, new solutions often face resistance and low adoption rates. It is essential to collaborate with all parties involved, ensuring that their needs and concerns are addressed. This engagement fosters trust and cooperation, making it easier to integrate new solutions into the system.

For example, if a new healthcare app is developed without input from doctors and nurses, it might not fit well into their daily routines or meet their needs. This could lead to frustration and reluctance to use the app. On the other hand, if these professionals are involved from the start, their feedback can help shape the app to be more user-friendly and useful, increasing the chances of successful adoption. If you don’t integrate the payers perspective on the other side, in the end healthcare professionals, and users love the solution, but payers, are even if they want not able to reimburse it, since it doesn’t consider their requirements or limitations.

Why Good Solutions Fail: The Problem with Parallel Systems

Conflict with Existing Solutions

Many healthcare ventures aim to replace existing solutions rather than integrate with them. This approach often leads to conflicts with established players, creating friction and resistance. Instead of working together, different solutions end up competing, which reduces their overall effectiveness and acceptance.

For instance, if a new electronic health record (EHR) system is introduced without considering the existing systems, it can create chaos. Doctors and nurses might have to learn a new system while still using the old one, leading to confusion and frustration. It's much more effective to create solutions that work with and improve the existing systems, rather than trying to replace them outright.

The Issue of Non-Integration

Parallel systems that operate independently of the current healthcare framework often face significant hurdles. These systems can lead to increased workloads for healthcare providers, complicate workflows, and ultimately fail to deliver the intended benefits. Additionally, economic challenges can arise if the new solutions are not reimbursable or do not align with the financial models of the existing system.

For example, a new patient monitoring device might provide valuable data, but if it doesn't integrate with the hospital's existing EHR system, nurses and doctors might have to manually enter data into both systems. This extra work can lead to errors and burnout, reducing the likelihood that the new device will be adopted.

Integration: The Nr. 1 way to Sustainable Healthcare Solutions

Navigating the Complexity of the Healthcare System

To achieve successful integration, healthcare innovators must navigate the system's complexity. This involves understanding regulatory requirements, aligning with existing workflows, and ensuring compatibility with other technologies and solutions. By doing so, new ventures can enhance the efficiency and effectiveness of healthcare delivery without disrupting the established order or the entire system, which is option Nr. 2, that can still be successful, but is a completely different approach.

Strategies for Effective Integration

Effective integration requires a strategic approach. Innovators should:

  • Conduct thorough stakeholder analysis: Understand who the stakeholders are, their roles, and their influence.
  • Build collaborative partnerships: Work with existing players rather than against them.
  • Align with existing workflows: Ensure that new solutions complement and enhance current practices.
  • Focus on interoperability: Develop technologies that can seamlessly integrate with other systems and devices.

Collaborative Approaches: Healthcare as a Team Sport

The Power of Long-Term Partnerships

Healthcare is inherently a collaborative field. Long-term success hinges on building robust partnerships with various stakeholders. By fostering long-term relationships, innovators can leverage the collective expertise, resources, and influence of their partners, driving sustainable change and innovation.

Leveraging Existing Networks and Expertise

Utilizing existing networks and the expertise of established players can significantly enhance the chances of success. Innovators should tap into the knowledge and experience of those who have navigated the healthcare landscape before, learning from their successes and failures.

Building the Future of Healthcare Together

The future of healthcare lies in a balanced approach that embraces both disruption and integration. By understanding the complexities of the healthcare system, engaging stakeholders, and fostering collaboration, innovators can create sustainable solutions that improve patient outcomes and drive the industry forward. Healthcare is a team sport and a long-term game, requiring the collective efforts of all players to achieve meaningful progress.

Manuel Mandl

Co-Founder @ PHYSIOFIT I Sigma Squared I TUM Manage And More

8 个月

Important topic! Thanks for adressing it Leonard!??????

a lot of truth in this (unfortunately).

Stephan Freudl

(Early Stage) Investor | Entrepreneur

8 个月

Great piece of work Leonard Rinser ???? - thanks for sharing ??

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