Overview and Requirements

Problems with health care quality, access, and costs bedevil all countries. The health care sector—inefficient, erratic in quality and access, ripe for massive technological and consumer-facing innovations—is one of the largest sectors that can be transformed with innovation.

The purpose of this course is to leverage the students in creating these innovations by focusing on how to make them happen. The students—with diverse backgrounds, or none—in the field typically form a lifelong network.

The course follows a “how to” framework for the following four organizational stages of three types of health care innovations: technology-commercializing, cost-controlling, and consumer-facing.

1. Evaluating
2. Starting
3. Scaling
4. Exiting

It is entirely taught through current field-based cases in all aspects of health care—digital, technological, service, and insurance. The CEOs of the firms depicted in the case studies typically attend the class. It is supplemented with optional pedagogical videos (e.g., reimbursement).

Course Requirements

Students prepare a business plan, which uses the framework of this course, for an organization that is a technology-commercializing, consumer- facing, or cost-controlling innovation.

The course offers advisers from other HU schools—HMS, SEAS, KSG, SPH, CS; established health care firms; legal/regulatory/reimbursement experts; and VC/PE investors.

Career Focus

For students interested in careers in managing, consulting, and investing in innovative health care/life sciences firms or creating innovative health care services, health insurance, health IT, digital health, consumer-based innovations, or medical technology.

Educational Objectives

Innovating in Health Care (IHC) enables students to create successful innovative health care ventures that respond to the massive opportunities created by the escalating cost and uneven quality and access of health care systems globally.

Innovating in Health Care (IHC) enables students to:

• Identify the one primary purpose of the innovation—technology-commercializing, consumer-facing, or cost-controlling.
• Learn the differing organizational, financing, accountability, technology, and consumer characteristics of virtually every major kind of health care organization.
• Understand how to align the innovation with the Six Factors that critically influence this kind of innovation—structure (the status quo), financing (who pays for what and why), technology, consumers, accountability, and public policy.
• Create business models that respond appropriately to any Six Factors misalignments and that feature the strategy, financing, management, and organizational structure appropriate for that kind of innovation.
• Learn the key factors in the four stages of growth of innovative health care ventures: evaluation of initial idea; starting up; scaling up; and exiting.

The field-based cases in Innovating in Health Care cover every part of the health care sector, including bricks and mortar primary care centers, insurance, bricks and mortar and virtual health care services, AI, digital health, medical devices, biopharma, diagnostics, payment and delivery intermediaries, telemedicine, DTC and PBM pharmaceutical delivery, and SaMD. The course has a global focus with case studies set in Africa and the U.S. Its cases discuss startups, firms that are scaling up, established firms that are recreating themselves, and firms that are contemplating exits.

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

Content and Organization

The course is organized into four modules, taught through field-based cases and summary notes by Prof. Herzlinger.

The first module, Innovating in Health Care, discusses the opportunities and risks for health care innovations and introduces students 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-commercializing, and cost-controllers. Students present their ideas for innovative health care business models for feedback from their classmates.The second module discusses case studies of health care startups. A panel on payment elucidates the process of coverage, coding, and payment in the U.S. and the varieties of cost effectiveness analyses used in many other developed countries to determine the price.

The third module contains cases of innovative healthcare firms that are scaling up in medical technology, health insurance and delivery, digital health, and associated intermediaries.

The fourth module contains cases of firms contemplating various forms of exit. Students present their business plans for feedback.

Prof. Herzlinger has founded a number of successful, entrepreneurial health care firms that have saved hundreds of thousands of lives; served on the Boards of directors of many large, public health care firms; written a number of best-selling books on health care entrepreneurialism and the health care plan of a U.S. presidential candidate; and often testified in the U.S. Congress.

Business Plan Requirements

Students 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 cross registrants, a significant number of which continue as ongoing businesses (for example, the Phreesia (PHR) case study: https://www.hbs.edu/faculty/Pages/item.aspx?num=38231).

For an optional catered session, you will prepare a 5-minute presentation of your business plan idea for a health care innovation. Those presenting will email the presentation materials the day before your presentation.

Your business plan should cover the following topics:

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

Grading

Students are reminded of the Class Absence and Remote Attendance Policy.

Class participation and the business plan will account for a significant percentage of the grade.

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