Dr. Sudeep K. Krishnan Open and Collaborative Innovation in US Healthcare: The Case of Health Insurance Exchange (HIX)

Roadmap INTRODUCTION – Literature Review and Gap Analysis US HEALTHCARE AND HEALTH INSURANCE OPEN INNOVATION RESEARCH OBJECTIVES & METHODOLOGY CASE STUDY – HEALTH INSURANCE EXCHANGE IMPLICATIONS AND FUTURE RESEARCH NETWORK AND COLLABORATION ANALYSIS

Introduction to Open Innovation  Traditional/Closed Model – Emphasis on organizational control for success of innovations  Competitive advantage by funding large projects  Open Innovation – A paradigm that assumes firms should use internal as well as external ideas and paths to commercialize their technology Chesbrough (2003)  Current Research on Open Innovation  Studies limited to conceptual foundation development based on limited empirical evidence  Current studies look at principles, individual drivers, and benefits of open innovation  Measures of Openness – Extent of Usage of External Sources  Partner characteristics (Type and number)  Phase openness  Intensity of collaboration

Context of Open Innovation  Required Conditions  There exists co-operation between firms and other agents in the network  The objective of co-operation is creation, adoption or development of something new to the organization that essentially involves a market.  Open innovation refers to actual partnerships and is not limited to cooperation (for longer periods normally, shorter periods may also exist).  There is a permanent or quasi-permanent investment in the relationship by all partners.  Current study analyzes degree of openness and understands operationalization aspects of open innovation principles in US Healthcare Sector  Partnership as need of new reforms

Introduction to US Healthcare and Major Players  HealthCare reforms in US  Reduction of Cost and Quality of Care  Obamacare – Affordable Care Act  Major Players 5

Research Questions & Methodology  What is open innovation in the US Healthcare Context and how open innovation principles differ from the traditional models of innovation?  How open innovation principles are operationalized in Healthcare projects?  How does partner selection and opening up of organization boundaries happen in such contexts?  Case Analysis of Health Insurance Exchange (HIX)

HIX - Introduction  HIX helps citizens  compare health insurance plans online,  select a plan,  apply for subsidies intended to make health insurance more affordable, and  receive verification of enrolment in a plan.  Requirements  Handle the needs of two distinct marketplaces—individuals and small employers (businesses)  Provide assistance to purchasers  Facilitate applications for the premium tax credits and cost-sharing subsidies offered under the ACA  Provide individuals with access to other health benefit programs (such as Medicaid) through a “no wrong door” approach to coverage  Certify that health plans meet benefit standards

Network and Collaboration Analysis  Rationale to Collaborate  Formation Stage  Exchange Characteristics – Basic structure itself calls for collaboration (Federal and state government, insurers)  Environmental Factors – Potential market, complementarity of partners, transaction costs  Reforms Characteristics – ACA calls for insurance and government bodies are bound to create exchanges Rationale to Collaborate Partner Selection Execution

Network and Collaboration Analysis  Partner Selection  Basic structure itself calls for partnership  Insurance companies, federal and state government  Payer and Patients  Proposed New Partners  Providers – provision to access insurance policy by provider directly  Analytics Partners – help in plan selection, cost benefit analysis, online platform support Rationale to Collaborate Partner Selection Execution

Network and Collaboration Analysis  Execution  Development of online models, tools and platform for analysis and plan selection  Desired project management  Identifying environmental risks  Control over processes (investment requirement from partners and identifying roles and responsibilities) Rationale to Collaborate Partner Selection Execution

Contributions  Contributions to Open Innovation Literature  Understanding basic concepts in a new domain  Exploring operationalization aspects of open innovation across a project and identifying factors influencing its  Guidelines for Practitioners  Identification of prospective partners  Results will have high impact on HIX implementation  Future Research  Simulation Model: US census data and predictive model for usage statistics and exploring cost  Influence of credit feature  Linkages with other policies and coordination of benefits