1. Service Science
as Applied to Health
Systems
MKTG 463 ~ June 1st, 2015 ~ Team 1
Abdulelah Alwisali, Erik Croswell, and Genny Welp

2. Introduction to Service Science and finding from Vargo and
Lusch
Overview of American Healthcare System
Overview of Literature and Key Concepts
Innovation Processes for Health Systems
IT Enhancement in Health Systems
Successful health systems around the world
The Affordable Care Act
The future of health systems
Outline

3. Service science is a business study that has become increasingly more
popular over the past decade.
It is now, frequently being used as the foundation for understanding of all
things that exist within the realm of business, economics, and the world. It
is primarily concerned with the “evolution, interaction, and reciprocal
cocreation of value among service systems” (Maglio 2008)..
The key principles state that service is what happens as the reason for all
interactions. It could be in the form of a monetary exchange, or the
relaying of information, or the providing of food or entertainment.
It is not a science that is being invented, but rather a realization of how the
world truly works.
Service Science

4. Stephen Vargo and Robert Lusch paved the way for a lot of what we know as
service science today.
They outlined the distinction between SDL and GDL. Shifting from offering
“services” to providing “service” is a mutually beneficial move to make.
Consumers feel like they’re having their needs more personally met,
producers are able to make more profitable connections from the more
integrated relationships that they create.
There are many myths that surround service: intangibility, inseparability,
heterogeneous, and perishable.
In a service economy, there are operants (resources upon which an act is
performed) and operands (resources that produce effects)
Healthcare systems would benefit from a switch to SDL because of how
essential it is for relationships with patients to be as close as possible.
Findings from Vargo and Lusch

5. America is a country that is renowned for its military,
innovative minds, and entertainment industries. We seem
to excel past much of the world in many technological
fields, are stuck in a rut when it comes to our healthcare
system. When evaluated on quality, accessibility,
efficiency, equity, and the health of our citizens, we place
11th (Stremilkis 2014).
The healthcare industry is extremely vast in its offerings, this
could include: hospitals, insurance companies, private
offices, health education programs, or government-funded
programs.
The one unifying factor is that they all strive to improve the
health of their community.
American Healthcare Systems

6. A switch to SDL must be made. Instead of the GDL term of “health care services”, “health service”
should be used.
Health care services refer to the system by which healthcare is made available to the population and
financed by government and/ or private enterprise. This is alienating for patients because it
treats their health as a commoditized asset to be moved through a supply chain.
Health service aims to provide the care that’s needed and tend to the improvement of their patient’s
total health. This means establishing relationships with competitors and playing off of their
strengths, sharing information between companies, and foregoing potential profits that could be
made from less-efficient systems.
A shift to this type would greatly improve the patient’s opportunity for the best care possible. Health
companies would be able to make more integrated relationships with customers and receive
better feedback, improved perception, loyalty, and opportunity for further care.
Kaiser Permanente has been making this switch to calling themselves providers of health service,
their Thrive campaign and Total Health programs aims to tackle their patient’s complete health
through a variety of different systems and types of care. This integration creates a lot more
value for both parties.
Healthcare vs. Health Systems

7. Overview of Literature

8. Exploit: New suture kit
Reframing: Scalpel technique
Bounded exploration: New gel for stitching
Co-evolvement: Post-op care policies
Innovation Systems
Design choices could be made on the basis of
aesthetics, details of service offerings, or
delivery methods
Experience-based design is done by identifying
points where patients come into contact with
service offerings and analyze if they’re
organized to create the most value.

9. Already existing in a hyper-fast adapting industry, health service is constantly being
reinvented in the effort of trying to improve care for patients, save money or streamline
processes for care facilitators.
There are generally three ways in which innovation to delivery is happening: technology,
innovation triad, and value networks.
Technology enablement refers to the digitizing of health records and telemedicine.
These should help make systems more cost-effective and sustainable.
Innovation triad refers to a change in how future health is handled. The current fee-for-
service model reinforces wrong behaviors, but more controlled methods with a
preventative platform could be more effective.
Value network development refers to the process of connecting health providers in a
community and working with the strengths and weaknesses of one another in order
to bring a stronger total value to the people its meant to serve.
Innovation Systems continued

10. IT Enhancement is the key for transforming a healthcare
services business to a an innovative health system.
E-healthcare and EHR’s:
Patients are able to meet with doctors via online chat
programs or webcam
Sites like WebMD receives thousands of contributions
from the medical world. More severe diagnoses will still
need to be made in person.
EHR’s allow patients to keep records with them or access
them online, taking information to different providers as
they please.
A large concern for security revolves around this, but
many hospitals are investing a lot of money into
improving their IT.
IT Enhancement in Health Systems

11. Big Data:
As more money is being invested in health data systems, there is a rising
need for population health management systems.
Kaiser Permanente recently used analytics to help improve technology used
for patients with cardiovascular diseases.
Growth is hindered by a lack of data storage.
Big data is often used for preventive measures, which adopts an S-D logic.
IT Enhancement continued

12. Mobile:
There are now close to 10 billion mobile devices around the world,
many of which have access to health applications.
These serve as a potential operands for EHR’s, can help patients
have immediate access to health information, and can remind
patients which medicine to take (how much and when).
Newer versions of the Samsung Galaxy can read pulses from
reading light rays in fingertips. The new Apple Watch has an
ad campaign that centers around using the device to get into
better shape.
A G-D logic mind would see these as a threat, but an S-D logic
would reveal opportunities for the extension of service.
IT Enhancement continued

13. Nanotechnology:
This technology allows us to manipulate molecular-sized robotic systems,
navigating through human bodies and taking action where needed.
Investing has been too risky for most providers but an Australian company has
invented a low-cost “dendrimer” that has started to be used in the
manufacturing of anti-viral condoms.
Biometrics:
Fingerprint and retinal scanning can improve security of patient information
and help speed up processes for checking in or if the patient is
unconscious/ has difficulty communicating.
Pairing this with EHR’s can reduce the risk that hospitals might take when
allowing patients to transfer sensitive information from place to place.
IT Enhancement continued

14. Patient-Driven Care:
While not highly technical, innovation toward preventive care is at the forefront
of the switch to service science minded health systems
Our current systems encourage people to take health risks with the security
that someone will come to save them.
Patient-driven care aims to educate people on how to care for themselves and
make healthier choices. This ultimately saves health systems billions of
dollars and helps create a healthier community.
Many systems rely on funding from post-accident care, but should look at
these systems as an investment for creating more integrated relationships
with customers and cost management of expensive facilities and
equipment.
IT Enhancement continued

15. Telemedicine:
.The use of electronic communications to exchange medical information
toward improving a patient’s health.
. Telemedicine has become one of the fastest growing offerings that major
employers are adding to their health care benefits programs, increasing from
less than 10% just two years ago to 28% of large U.S. employers, according to
a national survey. And another 24% plan to add it as a benefit in 2015.
. Telemedicine is not a separate medical specialty but rather the utilization of
technology to deliver care that might otherwise be delivered on site.
IT Enhancement continued

16. Telemedicine:
. A telemedicine option within a benefits plan might have a specific flat rate fee
that is lower than an average office visit, but it’s important to note that a
telemedicine visit is a “real” physician visit and more than a nurse helpline.
. It is a one-on-one consultation with a state-licensed physician who may make
a diagnosis and prescribe medication.
. Telemedicine is stepping in with solutions that promise to give patients
immediate 24/7 access— within minutes—to primary care physicians, reducing
utilization of emergency rooms and urgent care centers, with no trade-off in
quality.
IT Enhancement continued

17. IT Enhancement continued
Telemedicine:
. What has catapulted telemedicine into the mainstream is a confluence of
several key factors:
• The problem of “access to care” and shortage of primary care physicians.
• Pressures on providers for cost reductions and improved outcomes.
• Enthusiastic consumer adoption of communications technologies such as
computers, tablets and smartphones.

18. Bumrungrad Hospital:
. The largest private hospital in Southeast Asia, Bumrungrad is the unofficial
leader of medical tourism in Thailand, itself the most popular destination for
medical travellers in the world, though accurate data on this fast-growing
industry remain elusive.
. Thailand alone account for an estimated 40% of the global medical tourism
market.
. Cost is where Thailand really excels, though, said Kulyk. For heart bypass
surgery, Bumrungrad offers a package including a week’s stay for around
$19,000, according to its website, compared to at least US$80 000 in the US
for a patient without health insurance.
Examples of Successful Systems

19. Bumrungrad Hospital:
. A 554-bed private tertiary facility, treated more than a million patients in
2007, about 40% of whom were international patients, and the number still
growing since then.
. Bumrungrad scrapped its pieced-together clinical IT system and contracted
with Global Care Solutions, purchased by Microsoft Corp. to install its
enterprise system. The system covers a wide array of areas: registration,
clinical, patient- and bed-management, laboratory, radiology, image archiving,
pathology, pharmacy, financial accounting, materials management and human
resources.
Successful Systems continued

20. Bumrungrad Hospital:
. The IT system enablement has helped Bumrungrad keep up with double-
digit growth while keeping costs down and maintaining high-quality service.
. Among the resulting achievements are a decrease in the time it takes to
retrieve a medical record from 25 minutes to almost immediately, a 39%
decrease in patient waiting time, a 14.5% decrease in laboratory processing
time, and a decrease in accounts receivable days to 10 from 15. With paper
forms eliminated, the hospital was also able to convert 10,000 square feet of
medical records storage space into a revenue-producing pediatric center.
Successful Systems continued

21. Bumrungrad Hospital:
. Half of the 3,200 patients seen each day arrive without appointments.
. The hospital information system allows to manage schedule demands,
multiple languages, medical records, billing and regulatory compliance so
efficiently that the average waiting time to see a doctor is only 17 minutes.
Successful Systems continued

22. The big number of concerned is the number of uninsured people who signed up for insurance
because of the ACA. When all was said and done 8 million signed up, which exceeded the
Congressional budget office’s predictions. *Enrollment is not the same as insurance. Critics
question whether enrollee’s will pay their premiums and become insured. It is estimated that
85% of the 8 million who enrolled were subsidized.
Coverage for young adults age 19-26 had seen large gains. it is estimated that as of 2014 there are
7.8 million insured under a parent's plan.
Major coverage expansion was a large part of ACA. Health plans had to be divided into 4 distinct
levels so people shopping for insurance could compare plans easily.
The plan also created new private insurance marketplaces in all 50 states to sell subsidized
insurance to individuals and small groups.
Medicaid and CHIP also saw huge increases with 3 million more signing up than the previous year.
https://www.whitehouse.gov/the-press-office/2014/04/17/fact-sheet-affordable-care-act-numbers
The Affordable Care Act

23. Applying Service Science to ACA would fix some of the glaring problems
including the user experience with the marketplace websites and would
also take into account the unsustainability of the financial situation.
If the goal was using service dominant logic people would actually be able to
compare plans across the board instead of having to rely on someone else
to try and interpret this for them.
Another aspect would be those who were happy with their end product to
begin with would not be forced to change in order to fit into a new box of
regulated standardized services that a government entity believes all must
experience simultaneously. There would be the opportunity for greater
customization..
Service Science as applied to ACA

24. www.veriskhealth.com/fraud-waste-abuse
Fraud and abuse account for $234 billion annually
Waste accounts for $210 Billion in Annual Loss.
One way these huge losses can be overcome is by breaking down the silos that confine our information. Then we
can harness the potential of big data.
Last year alone Verisk Health identified 1 billion dollars in inappropriate and abusive claim payments for their clients.
Industry Problems

25. Reducing costs, improving coordination and outcomes, providing more with less and becoming more patient centric
are just a few challenges facing healthcare organizations around the world.
Building analytic competency will help organizations harness “big data” and allow them to create actionable insights
and improve outcomes all while saving time and money.
One big problem right now is the inability to connect clinical data to claims data. There are so many regulations and
disconnects between records that the data becomes useless. There is a need for integration and cohesion in
this process. Once that is achieved we could see a huge shift in the efficiencies of the healthcare industry.
Watson:
Cognitive computing enhances and accelerates human expertise. Watson was built by IBM to mirror the same
learning process we have through the power of cognition. The process is a common cognitive framework, the
same one humans use to inform their decisions: Observe, Interpret, Evaluate and Decide. (ibm.com/ibmwatson)
After observing Watson interprets data to expose patterns, connections and insights. Watson is discovering and
offering answers and patterns we hadn’t known existed, faster than any person or group of people ever could.
Watson uses the cognitive framework to achieve mastery over a given subject and develop expertise at an
incredible scale. Experts cannot keep up with the overwhelming sea of information but Watson can understand
the information and bridge the gaps in knowledge. It also can impart that knowledge to anyone across the
enterprise not just a select few experts.
The Future of Health Systems

26. In conclusion we see service science playing a huge role in the future of
health systems. Through our look at the history of healthcare and the
evolution of health systems we see that those who embrace service
dominant logic are on the cutting edge of technology and are becoming the
sustainable model of the future.
Government-run programs and both private and public entities will have to
adapt to these models to stay in the game and be competitive.
Consumers are increasingly affecting the marketplace outcomes and are
moving to preventative care rather than reactive care.
Conclusion

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30. QUESTIONS?