Healthcare's dysfunction offers opportunity

The dysfunction of healthcare may very well be the greatest business opportunity out there. Those who can dig through the morass of rules, paperwork and bureaucratic obstacles have a frontier ahead of them in an industry where great service, low prices and convenience have yet to take hold.

Too many in healthcare suffer from an increasingly common malady—companies fear that they've exhausted the possibility of growth by offering new products and services or appealing to new customers. So instead, they proceed to various forms of coercion. They move from the mindset of innovate, compete, and grow to consolidate, protect and defend. Their growth—and we're seeing this happen nationwide with hospital consolidation—comes from leveraging dominance in a marketplace, eliminating choice, attempting to lock in customers and raising prices.

To make it stop, we need to awaken the demand curve of healthcare and start treating healthcare like a true marketplace, one where there is consideration of the patient as a customer, someone with a voice who could conceivably compare prices, service and value.

It can be summed up in a single word: shopping. This involves making choices. We weigh countless options in the rest of our lives, but not nearly enough of them in healthcare. Shopping, whether it's driven by an individual, a retail buyer or a wholesaler, drives a normal market, and the market responds with choices and innovation.

There's an entrepreneurial trend in healthcare stirring that will hopefully awaken market forces within the American healthcare system. Convenience and customer service will be a huge battleground, as will competition for statistically better results. The winners will be the innovators. They'll have no choice. And they'll be rewarded with improved outcomes and satisfied customers, as well as heaping helpings of the fuel that drives markets: profits.

There's something highly appealing, almost intoxicating, about the possibilities, given healthcare's status quo. It's a chaotic industry that is a vital necessity, yet is widely loathed for myriad reasons. And at one-fifth of the economy—about $2.7 trillion—there's endless potential for entrepreneurs and technologists to bite off a chunk of inefficiency and simply do things better than the incumbents.