Case in Point: Developing a Unique Healthcare Model

[The following post is re-blogged from SAGE Connection. Click here to view the original article.]

Karen Pellegrin, Director of Continuing Education & Strategic Planning and Founding Director of the Center for Rural Health Science at the University of Hawaii at Hilo, Daniel K. Inouye College of Pharmacy

When the Patient Protection and Affordable Care Act (aka “Obamacare”) went into effect, the healthcare industry experienced the largest expansion of US government involvement since Medicare and Medicaid. This shift in government involvement created a ripe environment for government-subsidized clinics to flourish; but they weren’t the only clinics to do so. Mango Medical, a small business in rural Hawaii that does not rely on government subsidies, experienced enormous success in 2015 due to its unique primary care model that pays doctors for value of service over volume.

Karen Pellegrin & Timothy Duerler wrote a case study for SAGE Business Cases called Mango Medical: Growing a Fresh Healthcare Model. The case follows the creation and success of Mango Medical and allows students to gain a deeper understanding of healthcare trends, markets, systems, and strategies used in the US.

Highlighting the case in this latest installment of our Case In Point series, we caught up with Karen to learn more about the rise of the Mango Medical and the current healthcare environment. Karen provided some helpful insight for any instructor teaching about healthcare in business and management or organizational courses. Read the interview below.

  1. Your case describes the growth of a for-profit healthcare corporation in rural Hawaii, where the market seemed more primed for government-subsidized clinics after the passage of the Affordable Care Act. What would you say are the top three takeaways from this case for those learning about different healthcare models?

 Assumptions about subsidies, both the need and the amount, are typically based on current or traditional models of care; if you don’t question those assumptions, you conclude subsidies are required and easy to quantify.  If you question those assumptions, you might be able to create a more efficient model, as Dr. Duerler has.  There are many inefficiencies in our healthcare system, and we need new models to deliver better, more cost-effective care.

The healthcare industry is highly regulated and complex, which makes it tough to navigate; but where most see obstacles, entrepreneurs find opportunities.

In some ways, you could argue that rural Hawaii is such a unique market that the Mango model wouldn’t succeed in other markets.  I would argue that there is more in the model that translates than not.

  1. After the 2016 election, it seems likely we’ll be seeing some changes in government-subsidized health care. How do you see any potential changes affecting a business like Mango Medical?

 Passing the Affordable Care Act was difficult; changing it is proving to be even more difficult despite the known problems.  In general, the Republicans are focused on eliminating federal mandates that reduce choice and eliminating or changing subsidies.  Assuming fewer people would have health insurance or subsidies to cover the cost of care under a Republican replacement, this could affect Mango’s revenue.  However, because of their operating efficiency, Mango might be an attractive option to those without insurance or with high deductibles who are paying out of pocket.  Businesses focused on value and adaptability, like Mango Medical, will likely maintain a competitive advantage in a dynamic market.

  1. What are some of the marketing challenges faced when a new, growing company like Mango Medical has to adapt to a unique, rural setting?

 Communicating with target audiences is always key.  Our research has found that traditional formal marketing approaches are far less effective (and more expensive) than informal methods in reaching target audiences in rural Hawaii – specifically community members and clinicians.  Getting the message across about a new product or service can be done very efficiently and effectively by understanding the local landscape and leveraging existing communication networks.

Learn more by reading the full case study, Mango Medical: Growing a Fresh Healthcare Model, from SAGE Business Cases, open to the public for a limited time. To learn more about SAGE Business Cases and to find out how to submit a case to the collection, please contact Rachel Taliaferro, Associate Editor: rachel.taliaferro@sagepub.com.

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This entry was posted in Business, Corporate Governance, Engagement, Health Care by Cynthia Nalevanko, Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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