Last week, Blockbuster filed for bankruptcy. I’m not surprised. News report say that the once rental giant was having a hard time managing their debt and that by filing chapter 11, they’ll be able to “restructure” their financial obligations.
I don’t think I’m going out on a limb here when I say that Blockbuster is dying, not because of their debt, but because of their inability to embrace change.
I believe Blockbuster failed to listen to their customers’ needs, decided not to embrace technology or the Internet, and was unsuccessful at adapting their value proposition to meet the challenges and demands of the marketplace. The result? They relinquished their dominate market share.
I think Blockbuster’s demise can be an important lesson for medical practices. Especially those of us in primary care medical practices.
Blockbuster insisted on a brick and mortar model that emphasized late-fees, while Netflix and RedBox offered a different, more convenient, and less expensive alternative to Blockbuster. Add on-demand services by cable companies, and it is no surprise that the traditional brick and mortar, late-fee heavy model is doomed.
We have to be careful not to be too complacent with our traditional delivery model. While we insist on the established, check in, verify insurance, sit, wait to be called, 10 brief minute visit with the doc, MinuteClinics and the likes are offering a more convenient, less expensive alternative just like NetFlix and RedBox.
I’m not suggesting that MinuteClinics are the answer or that they offer the best model for health care. What I’m saying is that the marketplace is changing, patients demands are changing, and if we don’t find ways to accommodate the needs of the marketplace, we may be facing a similar path than Blockbuster’s.
Blockbuster asserted their business model didn’t need to change and worked hard at trying to keep it alive. Private medical practices are trying to keep alive a business model that relies heavy on a third party payer system, heavy on volume, and with little margins. We insist on continuing to provide health care without adopting technology (EMR adoption is still abysmal). Medical practices insist that the only way to win is to convince the government or the insurance companies that we ought to be paid more. And that in order for us to do our jobs comfortably, the APP ought make change for us. All important issues. But not the solution.
So what’s the solution?
If I had it, I’d be a rich man. But one thing I do know, working hard to maintain the status-quo is almost always a terrible long-term strategy. Companies and industries that refuse to change, and insist on maintaining the status quo, will almost always die in the long run.