Healthcare marketplaces are broken.
Stop and read that again: broken. Not sub-optimal. Not struggling. Not in need of fixing. At a time when it’s more important than ever to help health systems find the right solutions, and to help digital health companies bring mature solutions to market, the main mechanism designed to facilitate this process is flat-out, straight-up BROKEN.
What was supposed to be a tool to ease this all-important matchmaking process between health systems and vendors has instead become a millstone around the neck of the industry—one that primarily serves to add cost, reduce transparency, and extract money from health systems and vendors alike.
But it doesnt need to be this way. There’s a better vision: one where marketplaces aren’t just one more for-cost service, but a vital, equitable, transparent, and above all, effective tool for innovation and mature growth.
We call it the Marketplace Manifesto, and it’s a model of what healthcare marketplace could—and should—be.
Marketplaces should facilitate, not arbitrate or discriminate
The idea of a “marketplace” suggests somewhere neutral and equitable, where parties can come together to do business on equal footing and with each others’ best interests in mind. Interacting in a marketplace should be a fruitful, positive experience for everyone involved.
Unfortunately, healthcare marketplaces have shifted to become one-sided affairs, advantaging one side over the other. Some might advantage health systems, giving them free access and tools while extracting fees from vendors. Some might advantage solution companies, turning health systems into little more than sales targets up for grabs to the highest bidder.
Marketplaces are matchmakers, designed to bring two parties together and create a positive, lasting relationship. That means having the interests of both sides equally in mind.
Marketplaces should reduce cost, not add to it
Healthcare marketplaces are big business… but they shouldn’t be. Every dollar that a healthcare marketplace makes is a dollar that has to come from either health systems or solution companies.
That’s a problem, because it means that a tool fundamentally designed to reduce the cost—whether actual cost, or time and resources spent—of finding the right solution for your health system actually winds up increasing it. (It also means that healthcare marketplaces are incentivized to extract more and more resources from the process over time, which only compounds the problem further.) Often, marketplaces tout better deals and economies of scale, but with little transparency on the costs added by the transaction taking place.
For a healthcare marketplace to really serve its central purpose, it should not add cost to the transaction process. That means no pay-to-play, no hidden fees.
Marketplaces should be transparent
The value of a healthcare marketplace is in information; it provides information to help buyers sort through the noise. It’s about helping health systems understand the landscape and see which solutions are delivering results for others, while helping vendors understand what their customers are looking for. None of that can happen without a healthy dose of transparency.
Health systems and vendors can’t get an accurate view of the market if a marketplace lets some users “jump the line” and get preferential treatment. An honest marketplace ensures that vendors get noticed because they have better outcomes, happier customers, and greater ROI… not because they paid money to show up in lieu of their competitors.
A transparent, open marketplace is one that works best for everyone—health systems, vendors, and even the marketplace itself—while a marketplace that isn’t open about its own financial interests does a disservice to every user.
Marketplaces should make connections and then get out of the way
The true value of any marketplace is its ability to bring two people or organizations together so that they can learn about each other and conduct business. But once that all-important connection has been established, it’s time for the marketplace to get out of the way—it’s about the buyer and the seller, not the marketplace itself.
Marketplaces that try to “stay in the picture” after that initial meet-and-greet do a disservice to both parties. Recurring subscription plans and third-party agreements only extend the value for the marketplace itself, not the participants.
Building a better marketplace
Marketplaces are vital tools for navigating the complex process of finding, vetting, and adopting digital solutions. But for health systems and vendors to actually realize that value, marketplaces need to get back to basics and make sure they serve the needs of buyers and sellers.