The Business of Healthcare

1.5 Credits · Level: Graduate

This course is designed to familiarize you with the structure and function of the U.S. health care system. We consider healthcare from a business perspective, the companies that compose it (public, private, and non-profit), and how the interests of different sectors align or conflict with one another. As a highly regulated industry where federal and state governments often serve as gatekeepers to success or dominant purchasers, government decisions often drive business outcomes. Healthcare in the US is also characterized by inefficiency and complexity. And while it is ripe for disruption, change has often come more slowly than anticipated or desired by stakeholders. The course begins with an introduction to the primary commercial segments in the health care system: medical technology (pharmaceutical/biotech, medical device), provider (hospital, physician, post-acute), distribution (pharmacies, tradition and on-line distributors), health plans, and services (e.g., health IT, contract research organizations). We also review major government organizations and programs involved in healthcare, and how key policy issues such as reductions to Medicaid mandated under the OBBA, newly implemented negotiation policy for Medicare drugs, state efforts to collaboratively take control of public health decisions, affect operating businesses and way that executives think about strategy. The business of healthcare is presently being disrupted by a range of forces which merit special focus – as these changes are creating major commercial opportunity for entrepreneurs and established businesses. AI and advanced analytics hold great potential to leverage knowledge for reduced costs and increased quality - much the effects of the technologies remain unknown at this time. Large scale mergers and acquisitions are back on the table after a period of more intensive regulatory scrutiny. Payment reform and scaling of value-based design hold great potential to drive change. With that, humility is always useful in healthcare, and it's important to understand why the larger technology companies (e.g., Amazon, Google, IBM, Oracle) and many healthcare incumbents made significant mis-steps over time.