This is a summary of the book titled “Healthcare disrupted” written by Jeff Elton and Anne O’Riordan and published by Wiley in 2016. The authors are business consultants who assert that the new business models are inevitable, and they will be about curing people and not pushing pills. Although written a few years ago and prior to the change in government policies, their writing continues to be thought provoking. When the industry is set to reach $18 trillion in spending in 2030, costs will be incurred more from “fee-for-service” model rather than anything else. The new health care model emphasizes health over disease and value over volume. Reformers who are focused on results-based healthcare say providers should earn based on outcomes. There are some challenges from patients’ behavior as well which makes certain diseases like diabetes difficult to treat. Other emerging business models include “Lean Innovators”, “Around the patient innovators”, and “Value Innovators”. Lean Innovators who are typically makers of generic drugs, also invent products. Patient space includes apps, sensors, and other technology into their offerings. Value innovators are proposing that treatment begins at patients’ home. It is more effective for costly conditions like heart failure and diabetes.

The health care revolution is characterized by patients becoming active consumers, leading to increased healthcare costs and a shift towards a value-based model. The "fee-for-service" model, which incentivizes medical professionals to provide procedures, drugs, and devices in the most expensive scenarios, is causing health costs to soar. This flawed approach has led to reforms such as quality reports about physicians and the US Medicare system processing half of its payments using performance measures by 2018. Accountable care organizations (ACOs) have also contributed to this shift. Health care companies operate on a value curve that progresses through four stages: "Simple product," "Enhanced product," "Integrated services," and "Living services." The final frontier of the value curve, the "final frontier," involves offering an array of services, with patient outcomes partially determining payment. This shift is challenging due to legal and regulatory constraints.

Pharmaceutical firms known as "Lean Innovators" are combining generic drugs with innovative products to avoid patent-expiration problems and focus on niche products. They operate in area A of the value curve, selling products but not delving far beyond that level. Lean Innovators are rooted in the generic drug industry, selling cheaper alternatives, and embracing supply chain efficiency. Examples include Teva Pharmaceutical Industries, Allergan PLC, and Valeant Pharmaceuticals International. They typically grow through acquisitions and have a lower cost of sales and R&D than big pharma companies. They can post EBITDAs that exceed their big pharma competitors, with companies like Allergan, Teva, and Valeant posting EBITDAs of 35.6% in 2014.

Around-the-Patient Innovators are companies that focus on addressing patients' lifestyle challenges rather than just selling a basic product. They invest in talent and research, such as Johnson & Johnson and Novartis, and aim to evolve with the changing healthcare market. These companies aim to provide a broader value proposition and partner with companies like Apple, Google, and Qualcomm to fill gaps in their offerings. They operate in areas B and C of the value curve and must nimbly innovate while maintaining their legacy businesses. For example, Novartis' Entresto, a heart failure treatment, requires patients to monitor their blood pressure, change their diets, and maintain activity levels to maintain effectiveness. By focusing on these aspects, Around-the-Patient Innovators can help improve patient outcomes and reduce the need for prescription drugs.

The healthcare industry is transitioning from a traditional model of specialty therapeutics, geographic regions, and settings to a new model emphasizing health over disease and value over volume. Value Innovators, life sciences companies, are pushing into areas C and D of the value curve. Boston Scientific, for example, is focusing on treating congestive heart failure, a costly condition that requires high patient compliance. Medtronic, a device maker, focuses on data and patient monitoring to manage costs and keep chronically ill patients out of expensive facilities. However, achieving real-world success is challenging due to the longer time horizon involved in treating the chronically ill. The future of healthcare will see care becoming untethered from traditional locations, with patients playing a bigger role in the decision-making process. The industry will redefine medicines and care, moving from an intervention-based model to an ongoing mode of managing patients' health.

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