HBS Course Catalog

Innovating in Health Care

Course Number 2180

Professor Regina Herzlinger
Spring; Q3Q4; 3.0 credits
28 Sessions
Project


Qualifies for Management Science Track Credit


Course Requirements

Students prepare a business plan, which uses the framework of this course, for an organization that innovates health care .

Career Focus

For students interested in careers in entrepreneurial health care, consulting, and investing.

Educational Objectives

Innovating in Health Care (IHC) helps students to create successful entrepreneurial health care ventures by enabling them to:

  • Identify the one clear purpose of the innovation – technology advancing, consumer facing , or sot controlling
  • Analyze the alignment between the entrepreneurial health care venture and the Six Factors that critically influence it – structure ( the status quo ) , financing ( who pays for what and why) , technology, consumers, accountability, and public policy.
  • Create a business model that responds appropriately to any misalignments and contains smart strategy ,financing, management , and organizational structure .

Innovating in Health Care discusses every part of the health care sector, including insurance, services, IT, medical devices, biotechnology, diagnostics, and pharmaceuticals. The course has a global focus with case studies set in Brazil, India, Spain, the U.K., Arica, and the U.S. Its cases discuss startups as well as established firms that want to innovate themselves .

The CEO of the firm described in the case study typically attends the session.

Content and Organization

The course is organized into four modules:

  • In the first, Innovating in Health Care introduces students, through case studies, to the analytic framework of the Six Factors that critically shape innovative health care ventures and their impact on business models for three different kinds of health care innovations: consumer-focused, technology-driven, and cost controllers .
  • The next module uses case studies to discuss each of the Six Factors in detail.
  • The third module discusses case studies of firms whose business models caused them to succeed or flounder, typically with the case protagonists present.
  • In the last module, selected students present their business plans to the class.

As an example of the discussion of the Six Factors and their effect on innovative business models , one section focuses on how the financing factor affects new ventures, i.e., how do health care innovators get paid? The answer differs from that in most other sectors of the economy because the health care industry in virtually all developed countries is typically financed by a third party, not its users. In the U.S., employers are the primary sources of payment through private health insurance companies. State and federal governments pay for most of the health care expenses for their employees, the elderly and the poor. The health care expenses in other developed countries are typically paid by governments and by consumers in developing markets

The "Note on coverage, Coding , and Payment " explains the overall financing of health care in the U.S. and other countries, the interest of consumers in these financing mechanisms, the different kinds of insurance plans used by employers and governments, and the accountability and public policy issues they raise. It is accompanied by case studies of four health insurance firms-one is an established firm seeking to recreate itself (Humana). The other three describe entrepreneurial firms which newly offered HMOs (THG), high-deductible insurance (Consumer-Driven Health Care: Medtronic), and plans that pay for wellness activities( Vitality ) . Case studies of innovative biotech (ABC) ,medical device firms (Medtronic) , and health care providers ( HSS; Health Care Global ) require students to apply these principles to gauge the likely success fo the business models of these firms.

Business Plan Requirements

Students must prepare a business plan, which employs the IHC Framework, to create an entrepreneurial opportunity in health care. Some ideas for projects are posted on the course platform but you can devise your own project, as well, after Prof. Herzlinger approves it. Students frequently form teams with fellow MBAs and course registrants, some of which remain as ongoing businesses( Marvin )

You will prepare a 5 minute presentation of your business plan idea for health care, its alignment with the Six Factors , and the resulting business model. I will select 6 or more people to present this in class. Those selected will need to email your presentation materials to my faculty assistant the Monday before your presentation.

Your business plan should cover the following topics:

  • The type of opportunity
  • Six Factors alignment
  • Next steps

Grading

Students are expected to attend every class unless excused in advance in writing. Class participation will account for a significant percentage of the grade, and the business plan will account for the remainder.


Copyright © 2022 President & Fellows of Harvard College. All Rights Reserved.