Authored by Jim Ducharme, Chief Technology Officer, ClearDATA. ClearDATA were winners of the Best Cloud Consultancy or MSP category, and finalists in the Cloud Management Solution of the Year and Security Innovation of the Year (SMB) categories of the 2023 Cloud Awards

The healthcare sector is poised for a groundbreaking shift, and the driving force behind this transformation is the emergence of platform businesses.

Platform businesses have been garnering significant attention in recent years. Forty percent of the $29 billion investors poured into digital health in 2021 went to platforms, which are valued at 2.8 times more than non-platform startups, according to Summit Health.

Of course, while VC investment in healthcare has cooled considerably since the record-setting activity of 2021, there are still signals that the market is ripe for growth. Big tech, for example, has been entering the healthcare game, increasingly investing in the realm of digital health. Just last year, Microsoft acquired conversational AI company Nuance for $20 billion, and Oracle closed a $28 billion deal to buy electronic health record giant Cerner.

As the conventional healthcare market evolves, it grapples with heightened consumer expectations and increased competition from unconventional players. Amidst the shift toward value-based care and digital transformation, progressive healthcare organizations are compelled to explore innovative business models to guarantee enduring success.

Platform models offer healthcare organizations the ability to strengthen and expand their services through enhanced collaboration and integration with other healthcare stakeholders. Without a doubt, these innovative models have the potential to reshape the very foundations of healthcare as we know it.

But what exactly are platform business models, and how can they revolutionize the healthcare industry? Let’s delve into this new frontier of healthcare innovation.

Defining the Platform Business Model and Its Application in Healthcare

Enter the platform business model — in which a central framework orchestrates the exchange of value among external parties. Essentially, the platform acts as a conduit, connecting buyers and sellers of diverse goods and services — all without requiring businesses to directly own these commodities. For a platform venture to thrive, it must establish itself as a trusted center of attention and activity, ensuring seamless and frictionless transactions within its ecosystem.Today, some of the most successful companies operate on a platform model — in fact, according to Bain & Company, seven out of the 10 most valuable companies in the world are powered by platforms. Uber, for example, has grown into one of the most valuable companies worldwide without owning any of its own vehicles. Similarly, Airbnb, Etsy, Spotify, and even Amazon have platforms that unite buyers and sellers, creating real value for the companies and their customers without having to hold inventory or produce the goods and services themselves.

In the healthcare realm, a platform business model could redefine the landscape. Potentially, a business like this could provide immediate access to on-demand healthcare services, facilitated through digital channels like consumers’ smartphones. Alternatively, it could foster connectivity among B2B stakeholders within the healthcare space, thereby enhancing transactions across the sector — enabling seamless coordination between healthcare technology companies, payers, and providers for comprehensive patient care.

“For a platform venture to thrive, it must establish itself as a trusted center of attention and activity, ensuring seamless and frictionless transactions within its ecosystem.”

Platform Trailblazers in Healthcare

While still in the minority, a few platform businesses have begun to emerge in the healthcare industry, leveraging technology to connect various stakeholders and streamline healthcare services.

For instance, Athenahealth offers essential Software-as-a-Service (SaaS) solutions to a broad network of healthcare providers and community care organizations, fostering improved care delivery via increased interoperability. Patients, pharmacists, labs, and other healthcare participants can share information easily within Athenahealth’s unified ecosystem, creating a wealth of available healthcare data.

The value of this data cannot be overstated. With all this information gathered in one place and available for analysis, organizations can glean critical insights to create and deliver optimal care pathways for better patient outcomes. Ultimately, by bringing together diverse healthcare functions and providers within a singular platform and streamlining transactions, Athenahealth is well-positioned to help improve patient health industry-wide.

A couple of other prime examples of platform businesses in healthcare include ZocDoc, an online platform making it easier for patients to find providers and schedule appointments, and Teladoc, a virtual care platform connecting patients with telemedicine services. Businesses like these can have a tremendous impact on healthcare, creating frictionless digital pathways for people to access the care they need — when they need it.

The Blueprint for Building Effective Healthcare Platforms

Although plenty of healthcare organizations aspire to become platforms, to credibly do so and redefine the healthcare landscape, they need to undertake three crucial objectives.

Regulatory Agility: First and foremost, it’s essential that businesses know how to operate successfully within a heavily regulated industry. Adapting rapidly to healthcare regulations and continuously deploying platform updates to ensure compliance is the cornerstone. This level of agility not only mitigates the risk of cyber threats but also enables secure and smooth transactions within the healthcare platform.

Network Growth: Addressing the “cold start problem” is crucial to building a thriving network. The inherent worth of a network materializes when it attains a critical mass of participants engaged in transactions, creating a “network effect.” Prior to this inflection point, there isn’t sufficient value in the platform for either buyers or sellers. Future-thinking healthcare platform enterprises must cultivate an ecosystem with enough value to bring in new stakeholders, fueling organic growth.

Optimized Customer Experience: Customer experience is now one of the most vital elements for healthcare success. A recent study by Roland Berger highlights that industry leaders believe the linchpin for platform businesses’ success lies in the customer experience, eclipsing even perceived health benefits. Any friction in the user journey risks customer attrition so, to stay competitive, platform businesses must create a user experience that seamlessly guides users through every interaction.

To put it simply, platform enterprises have the potential to revolutionize the healthcare industry. However, industry transformation hinges on how well organizations embrace digital health technologies. The companies that will lead the market are those that enable seamless collaboration and interoperability among healthcare stakeholders. After all, as a platform enables more and more transactions, it simultaneously collects a wealth of data to refine its offerings — setting in motion a self-perpetuating cycle of progress.

About ClearDATA
Cloud Catalyst. Healthcare Protector.
ClearDATA is the first comprehensive provider of healthcare-specific managed cloud, compliance and security services, enabled by the powerful CyberHealth™ Platform. ClearDATA’s solutions enforce continuous cloud compliance, defend health innovation with healthcare-centric threat intelligence and security technology, and protect health data across all cloud environments from design time through run time. To learn more about how ClearDATA helps market-leading organizations modernize and protect healthcare with secure, highly accessible data in the cloud, visit cleardata.com.