HEALTHCARE – BUSINESS MODEL
Regardless of its stage of digital transformation, the global healthcare ecosystem is fundamentally governed by its underlying economic model. The current pay-for-service model, which dominates most healthcare systems worldwide, has led to skyrocketing healthcare expenditures. Fueled by an aging population and the rise of chronic lifestyle diseases, the demand for healthcare services has created an unsustainable socio- economic burden on societies.
To prevent a financial collapse of healthcare systems, a major paradigm shift is both essential and inevitable. Transitioning toward value-based care and outcome-driven compensation models is the key to ensuring a sustainable, efficient, and patient-centric healthcare system.
Pay-for-Outcome: A Sustainable Alternative
Pay-for-outcome ecosystems remain rare, with Kaiser Permanente serving as one of the most well-known examples. This model operates as a closed-loop system that integrates all key stakeholders:
- Payers (insured population)
- A fully integrated network of service providers
- Educated, engaged patients
Unlike the traditional fee-for-service approach, in a pay-for-outcome system, healthcare providers and caregivers are compensated based on patient health outcomes. This is achieved through a fixed monthly income, supplemented by performance-based incentives tied to measurable wellness improvements across the insured population.
By aligning economic incentives with preventive care, wellness, and long-term quality of life, this model fosters a virtuous cycle that enhances public health while ensuring financial sustainability.
This shift represents a transformation from an ego-driven system to a true Healthcare 4.0 ecosystem, as described by Otto Scharmer in Leading from the Emerging Future and Theory U. The pay-for-outcome model is at the core of value- based healthcare, a concept pioneered by Michael Porter and Elisabeth Teisberg in their seminal book Redefining Healthcare, which remains highly relevant two decades later. This approach is also strongly supported by the International Finance Corporation (IFC), a branch of the World Bank, as a model for scalable, sustainable healthcare reform.
Pay-for-Service: The Dominant but Unsustainable Model
Despite growing recognition of value-based care, the vast majority of global healthcare ecosystems still rely on the pay-for-service model. This system compensates providers based on the volume of services rendered—not on the quality of care or patient health outcomes.
Unfortunately, this incentive misalignment results in a healthcare system optimized for volume throughput rather than long-term health and prevention. The pay-for-service approach inherently prioritizes:
- Critical care interventions over preventive strategies
- Short-term treatments over long-term health improvements
- Revenue generation through procedures rather than patient well-being
As healthcare costs continue to rise, shifting toward pay-for-outcome models is no longer just an option—it is an urgent necessity. The future of healthcare lies in aligning financial incentives with patient wellness, ensuring that value-based care models replace outdated volume-based systems.
At Suigen Healthcare, we actively support and develop innovative business models that facilitate this critical transition—helping healthcare systems move toward a more efficient, equitable, and patient-centered future.
Behavior Change Model: The Key to Chronic Disease Management
One of the biggest challenges in chronic disease management is ensuring long- term behavior change in patients. The Fogg Behavior Model (FBM), developed by Dr. BJ Fogg, provides a powerful framework for understanding how small, incremental changes in behavior can lead to sustainable health improvements.
Fogg Behavior Model (FBM): The Three Key Factors of Behavior Change
The FBM states that for behavior change to occur, three key elements must be present simultaneously:
Motivation – The patient must have a strong personal reason to make a change, such as improving quality of life or preventing disease complications.
Ability – The behavior must be easy to adopt, meaning healthcare interventions should be simple, actionable, and seamlessly integrated into daily life.
Prompt (Trigger) – A reminder or external prompt must be in place to initiate
the behavior at the right time.
When any of these three factors are missing, sustained behavior change becomes unlikely. This model is particularly relevant in chronic disease management, where long-term lifestyle modifications—such as dietary changes, medication adherence, regular physical activity, and glucose monitoring—are crucial to successful health outcomes.
Applying FBM in Healthcare 5.0
In Healthcare 5.0, digital tools and AI-driven platforms can play a crucial role in
reinforcing behavioral change by:
- Personalized Digital Coaching – AI-driven health assistants can provide tailored advice and motivational coaching to patients.
- Smart Nudges G Notifications – Wearable devices and apps can remind patients to take medication, exercise, or check their glucose levels at optimal
- Gamification G Rewards – Patients can be incentivized through goal- setting, achievement tracking, and rewards for adherence to health plans.
- Data-Driven Feedback Loops – Real-time health data can provide instant feedback, reinforcing positive health
By embedding behavioral science into healthcare models, Suigen Healthcare ensures that technology doesn’t just monitor health—but actively drives lasting change.
Conclusion: Merging Economic and Behavioral Innovation
To achieve a sustainable healthcare future, two things must happen:
- Healthcare payment models must shift from volume-based (pay-for- service) to value-based (pay-for-outcome).
- Healthcare systems must incorporate behavior change science to drive long-term patient
At Suigen Healthcare, we recognize that real healthcare transformation requires both financial and behavioral innovation. By integrating Healthcare 5.0 technologies, AI-driven behavioral strategies, and new business models, we are shaping the future of patient-centered, outcome-driven care.