The recently announced health care joint venture between Amazon, JP Morgan and Berkshire Hathaway serves as a reminder of the important role the health system board is expected to play, interacting with management to guide the organizational response to business disruption.
The new venture involves the formation of an independent health care company for the parties' employees in the United States. The company is still in a conceptual stage and the extent to which it will change their employees' existing health coverage is uncertain at this point. Nevertheless, the venture is the latest, and perhaps most significant, in a series of recent developments involving business disruption in health care. As Ken Kaufman noted in Modern Healthcare, "When you have mediocre access and a low level of convenience and high costs, then you have disruptors that are going to be all over you."
For the health system, leadership responsibility for business disruption is an extension of the shared approach historically applied to tasks such as strategic planning and risk management. These tasks incorporate prominent roles for both the board, which can encourage the development of a strategic or risk management plan and oversee management's implementation of it, and management, which develops the specific plan. The effectiveness of both of these tasks relies upon on an integrated perspective on the long term strategy and risk management, as the case may be. An effective response to innovation-based business disruption relies on a similar approach; i.e., the board encourages management to identify business disruption threats and to develop responsive strategies, and then monitors the evolution of such strategies. Management, on the other hand, informs the board as to the nature and source of disruption threats, implements a responsive plan, and supports the board's ability to monitor the success of that plan. Ultimately, responsibility for dealing with business disruption is grounded in the board's fundamental obligation to ensure that the company maintains its long term value and serves its principal constituents.
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