Platforms, a business model (2)

A long long time ago Michael Porter wrote Competitive Strategy a book that has been used as the bible of strategy.

Porter’s model identifies five forces that affect the strategic position of a particular business: the threat of new entrants to the market, the threat of substitute products or services, the bargaining power of customers, the bargaining power of suppliers, and the intensity of competitive rivalry in the industry. The goal of strategy is to control these five forces in such a way as to build a moat around the business and thereby render it unassailable.
Thus, when a firm can erect barriers to entry, it can keep competitors out, and entrants with substitute products cannot storm the castle. When a firm can subjugate suppliers, competition among them weakens their bargaining power so the firm can keep its costs low. When a firm can subjugate buyers by keeping them relatively small, disunited, and powerless, the firm can keep its prices high.
In this model, the firm maximizes profits by avoiding ruinous competition for itself but encouraging it for everyone else in the value chain. Advantage is found in industry structures that create a protective moat—one that enables the firm to segment markets, differentiate products, control resources, avoid price wars, and defend its profit margins.
For decades, companies have studied the five forces model and used it to guide their decisions about which markets to enter and exit, what mergers or acquisitions to consider, what sorts of product innovation to pursue, and what supply chain strategies to employ.

Now platforms add a new perspective,

Enter platforms. Many of the insights embodied in the five forces, resource-based, and hypercompetition models remain valid, but two new realities are now shaking up the world of strategy.
First, firms that understand how platforms work can now intentionally manipulate network effects to remake markets, not just respond to them. The implicit assumption in traditional business strategy that competition is a zero-sum game is far less applicable in the world of platforms. Rather than re-dividing a pie of more-or-less static size, platform businesses often grow the pie (as, for example, Amazon has done by innovating new models, such as self-publishing and publishing on demand, within the traditional book industry) or create an alternative pie that taps new markets and sources of supply (as Airbnb and Uber have done alongside the traditional hotel and taxi industries). Actively managing network effects changes the shape of markets rather than taking them as fixed.
Second, platforms turn businesses inside out, moving managerial influence from inside to outside the firm’s boundaries. Thus, a firm no longer needs to seize every new opportunity on its own; instead, it can pursue only the best opportunities while helping ecosystem partners seize the others, with all partners sharing the value they jointly create.13
These two new realities add a dramatic layer of complexity to business competition. Platform strategy resembles traditional strategy much the way three-dimensional chess resembles the traditional game.14 Within the ecosystem, the lead firm negotiates dynamic tradeoffs involving competition at three levels: platform against platform, platform against partner, and partner against partner.

These are excerpts from the book "Platform revolution" a must read if you want to understand what's going on in value creation in a connected world. In chapter 12 you'll find some comments on health sector, very succint and general.

Platforms, a business model

Platform scale

Platform Scale (n): Business scale powered by the ability to leverage and orchestrate a global connected ecosystem of producers and consumers toward efficient value creation and exchange.

The new hype on business models is around platforms. Well, this is not new, a decade ago David Evans wrote Catalyst Code but its impact was limited. Now "Platform scale" and "Platform revolution" are the two required business books. If you want to understand the economic foundations go to "Platform Economics".
The topic requires more elaboration than a post in a blog. How this trend affects health care in practice remains to be seen.

The Platform Manifesto
1. The ecosystem is the new warehouse
2. The ecosystem is also the new supply chain
3. The network effect is the new driver for scale
4. Data is the new dollar
5. Community management is the new human resources management
6. Liquidity management is the new inventory control
7. Curation and reputation are the new quality control
8. User journeys are the new sales funnels
9. Distribution is the new destination
10. Behavior design is the new loyalty program
11. Data science is the new business process optimization
12. Social feedback is the new sales commission
13. Algorithms are the new decision makers
14. Real-time customization is the new market research
15. Plug-and-play is the new business development
16. The invisible hand is the new iron fist

 The book

Més despesa seguint interessos electorals o ideològics?

The growth of public health expenditures in OECD countries: Do government
ideology and electoral motives matter?

El comportament oportunístic dels governs amb la despesa sanitària queda reflectit en aquest article al JHE. Quan hi ha eleccions fan créixer la despesa pública, això és el que es mostra el marc de la OCDE 1971-2004. La ideologia es deixa de banda.
El plantejament de l'article:

Health care expenditures (HCE) have steadily risen in OECD countries and have therefore attracted a great deal of attention in the political discourse and in the scientific debate. The cause of this increase in expenditures remains somewhat unclear (for surveys of the literature see Gerdtham and Jönsson, 2000; Okunade et
al., 2004). Three strands of the literature can be distinguished. The first strand identifies a positive correlation between HCE and GDP growth in OECD countries and shows that GDP explains a high percentage of the variation of HCE (e.g., Newhouse, 1977; Parkin et al., 1987; Gerdtham and Jönsson, 1991; Gerdtham et al., 1992; Hitiris and Posnett, 1992, also Leu, 1986; Culyer, 1989). The second strand refines the econometric techniques and tests for panel unit roots, cointegration and structural breaks etc. (e.g., Hansen and King, 1996, 1998; McCoskey and Selden, 1998; Gerdtham and Löthgren 2000; Carrion-i-Silvestre, 2005; Jewell et al., 2003; Narayan, 2006; Herwartz and Theilen, 2003). Introducing the third strand of literature, Gerdtham and Jönsson (2000) encourage testing for “new” explanatory variables. For example, Baumol’s (1967) growth model of ‘unbalanced growth’ implies thatHCEis driven bywageincreases that exceed productivity growth (Hartwig, 2008). The relative price of medical care offers a ready explanation for the rise in HCE in OECD countries (Hartwig, forthcoming). The lion’s share of total HCE is public, implying that political factors could also play an important role in explaining the steady increase in HCE.

La conclusió

In this paper, I empirically evaluate how political forces influence the growth of public HCE. The results suggest that incumbents behaved opportunistically and increased the growth of public health expenditures in election years. Government ideology did not have an influence. These findings indicate (1) the importance of public health in policy debates before elections and (2) the political pressure towards re-organizing public health policy platforms especially in times of demographic change.

This finding is in line with the related empirical literature that ideology did not affect budgetary affairs in the last two decades, but ideology-induced effects can be identified in nonbudgetary affairs. For example, market-oriented governments have deregulated product markets in OECD countries in the 1980–2003 period (Potrafke, 2010), and government ideology has had a strong influence on political alignment with the U.S.: leftwing governments were less sympathetic to US positions (Potrafke, 2009c).

Mirat en detall, no explica què vol dir ideologia i tampoc què vol dir un país. Hi ha estats que tenen tantes eleccions que poden afectar a la despesa que tot plegat opera com factor de confusió. El deixaré al calaix, m'ha interessat el plantejament, però no les dades ni els resultats.