My pre-mortem examination of the hospital business model

encyclopedias
newspapers
movie rentals
theaters
airlines
magazines
libraries
broadcast television
wireline phone companies
record companies
DEC
Xerox
department stores
SUN
H-P
GM
A&P
Circuit City
Most US hospitals

In his book, “How the Mighty Fall,” Jim Collins describes the path to a business failing. His five phases are:

Hubris born of success
Undisciplined pursuit of more
Denial of risk and peril
Grasping for salvation
Capitulation to irrelevance or death

To those, I add a sixth, right between 3 and 4, “Dumping Ballast.”

Hubris born of success
Undisciplined pursuit of more
Denial of risk and peril
Dumping ballast
Grasping for salvation
Capitulation to irrelevance or death

Dumping ballast is the elimination of key components to lighten the ship. Perhaps you remember seeing the movie version of Jules Verne’s novel, the Mysterious Island. In it, prisoners of the Civil War escape in a hot air balloon. The balloon is ravaged by storms and looks like it will go down in the sea. To keep it aloft the crew tosses everything overboard, things they would need if they reached land.

I think most hospitals in the US are concurrently working on stages 3 and 4. The first step is to quit denying that they have a problem. The second step is to recognize that some of what they discarded will prove critical to their chances of survival.

What do you think?

Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy