Satish Nambisan

Consumer Value Co-Creation in Health Care

Health care has become the front and the center topic in our national dialog in the last couple of years or so. As the politicians, lobbyists, and policy experts hotly debate how to reform health care, it is becoming increasingly evident that true healthcare reform is unlikely to originate from Washington D.C. Indeed, such reform will have to come from all of us, as individual consumers – as we take greater responsibility for and participate more actively in managing our own health.

Importantly, recent trends indicate that consumer participation in health care doesn’t need to be limited to such personal healthcare management. Consumers can also participate in innovation and value creation in varied areas of the healthcare industry, and thereby contribute to reducing healthcare costs and enhancing the overall quality of health care. A critical enabler of such consumer value co-creation is new information and communication technologies such as online health communities and Web 2.0 (social media) technologies.

Recently I co-authored an article on this topic – "Models of Consumer Value Co-creation in Health Care" – which was published in the October/December 2009 issue of the Health Care Management Review. Here is a link to the article (subscription required).

In this article, we identify four alternate models of consumer value co-creation - the partnership model, the open-source model, the support-group model, and the diffusion model. Our objective was to develop a better understanding of how consumers can co-create value in health care and also offer guidance to healthcare organizations (HCOs) in adopting appropriate strategies and practices to embrace consumers as partners in the development and delivery of innovative health care products and services.

The Global Brain and the Service-Dominant (S-D) Logic

Last week, I gave the keynote address at the 2008 Logic and Science of Service Conference in Hawaii. The conference, focused on service-centered research and sponsored by the IBM Almaden Services Research Center, was co-chaired by Prof. Steve Vargo (University of Hawaii) and Prof. Bob Lusch (University of Arizona).

Steve and Bob are also the authors of an award-winning article on Service-Dominant (S-D) logic of marketing (Journal of Marketing, 2004) that argued for a shift away from the goods-dominant (G-D) logic that has pervaded much of our thinking so far. The foundational proposition of S-D logic is that organizations, markets, and society are fundamentally concerned with exchange of service. Thus, as per S-D logic, service is exchanged for service; all firms are service firms; all markets are centered on the exchange of service, and all economies and societies are service based. A very interesting and thought-provoking perspective!

In preparing for my presentation at the conference, I was struck by how close some of the themes discussed in The Global Brain are to those espoused by the S-D logic – in particular, the role of customers.

As stated in the book and elsewhere in my research work, customers form an important part of the Global Brain, and increasingly firms will co-innovate and co-create value with customers. The S-D logic also embraces the concept of co-creation of value – as Steve and Bob note, “instead of firms being informed to market to customers, they are instructed to market with customers, as well as other value-creation partners in the firm’s value network”. Thus, the focus on collaborative innovation and value co-creation, that is the premise of The Global Brain, underlines the S-D logic too.

The challenge then for companies would be to put together and offer the appropriate set of resources and knowledge to facilitate the right level of involvement of customers in the co-innovation or co-production of the service offerings. Companies who are able to “integrate” the knowledge and the value that is thus co-created by customers (and by other network partners) are likely to see themselves well ahead in the game!