William Kissick, the father of the US Medicare program, once described the economics of health care systems as an iron triangle composed of three competing elements: access, quality, and cost containment. The core challenge: How do you make improvements to one of the elements without compromising the other two? Much of the focus has been on rising costs, which the traditional model of care delivery has tried to address with improvements in operational efficiency—delivering the same level of output with less effort and waste. However, this chase for efficiency has reached its limits. In recent decades, productivity improvement rates in health care in Europe and North America have lagged behind those of almost all other industries. It is time to pivot from a focus on efficiency to a focus on meaningful innovation, and business ecosystems in health care can play a major role in this paradigm shift.

First, they can provide fast access to a broad range of external capabilities that may be too expensive or time-consuming to build internally. This is particularly relevant for companies that want to reap the benefits of open innovation, an area where ecosystems outperform pipeline models. Second, ecosystems can scale much faster than pipeline models. Their modular setup, with clearly defined interfaces, makes it easy to add partners and expand the network. And finally, ecosystems offer a large degree of flexibility and resilience. They can quickly adapt to changing consumer needs or technological innovation, which makes them particularly advantageous in unpredictable environments and during times of high uncertainty.

In business ecosystems, a dynamic group of largely independent partners work together to deliver integrated products or services. While the health care system meets all requirements of a business ecosystem, it is rarely managed as one. By learning from other industries and harnessing the innovation potential of the ecosystem model, health care could substantially improve all three dimensions of the iron triangle. Like Alibaba for retail, or Airbnb for travel, health care ecosystems could facilitate and improve access at scale for patients and consumers. Like smart farming or smart mining platforms, health care ecosystems could enable new solutions and major improvements in quality by enhancing coordination and effectively using data across partners. Like cloud-computing platforms or e-commerce marketplaces, health care ecosystems could lower cost and tap the efficiency potential currently lost in the fragmented interplay of stakeholders, sectoral boundaries, and limited care coordination, which researchers estimate account for up to 25% of health care spending in Europe and the US. When designed and managed properly, business ecosystems allow health care organizations to break the painful tradeoff between access, quality, and cost.