Greg, I think it would be great to have on-site sedation clinics at BCH so that this type of care can be delivered not only for oncology patients, but to all pediatric patients requiring lower acuity surgical care. Most of the value is realized from revamping the model of care rather than changing the physical site of care. Of course, the added benefits related to patient satisfaction and the potential care synergy that may be realized for oncology patients at the DFCI would not be realized if care were provided at BCH. However, the scale of offering this type of care would probably outweigh the benefits of implementing sedation suites at individual medical centers. To your question about adoption, I think there are several issues. One is that the institution needs to be comfortable to divert enough care from the OR to the sedation suite to justify its investment, and must also be able to efficiently fill the freed up main OR time with other procedures. Another issue has to do with justifying the cost/benefit to providing care using fewer resources and a more unfamiliar model. There are some additional costs in the DFCI model that seem “inefficient,” such as having more skilled nurses, for example, not always working at the “top of their licenses.” These are countered by time savings in terms of information gathering and transfer, but the true value of the trade-offs wasn’t realized until time-driven activity based costing studies were undertaken. Clearly, these trade-offs are very effective in producing value in the case of the DFCI. However, sometimes lower-resourced settings don’t translate into cost savings if there isn’t a well-executed process in place. This is true of the satellite clinics such as BCH-Waltham, where there actually weren’t significant cost savings in diverting the same lower acuity care. Unless there is a clear and quantifiable justification for changing care, I think there is an inertia among clinicians– to continue to practice in the way they always have.
This is a great post on how MiniLuxe makes a service both luxurious and convenient, yet efficient and not prohibitively costly. What I do think is difficult is differentiating a firm when it lies on the middle of the scale in terms of factors such as price, experience and convenience. It is super clear from your post how Miniluxe is able to differentiate itself from lower-end salons. But, for a service that isn’t subject to huge pricing variability, how is MiniLuxe able to differentiate itself from higher end salons? From personal experience, I have found the actual service to be efficient and of high-quality, but because the operational model is so focused upon making sure that technicians are always occupied, this often translates to longer wait times. I would also be curious as to your perspective on the variety of services that MiniLuxe offers. Obviously, Starbucks has had some challenges with this, but has successfully been able to refine processes such that they can offer a wide range of menu options, but still maintain an efficient process. Spa services are not necessarily amenable to the same sorts of modifications. Do you think MIniLux would be best to stick to what they do best– nails– or continue offer massages, waxing and other services?
Spencer, you raise some really interesting questions. The billing at BCH is a little convoluted. For example, the surgical part of the service is paid to the Surgical Foundation rather than to the hospital. This does not change in the new model. However, shifting procedures to an alternate location allows the resource-intensive process at BCH to be applied to procedures that really require these inputs. The sedation suite is definitely not at full capacity at present, as many procedures are still in the pilot phases of testing. However, the vision is obviously for it to be used at almost-full capacity. As far as the site of care (FCI versus another site of care), housing the procedure at the DFCI enhances patient satisfaction due to familiarity and trust built with the institution over the course of patients’ cancer diagnoses and treatment phases of care. Furthermore, compared to an independent site, there is less required pre-procedure work due to the institution’s and clinical staff’s familiarity with patients’ extensive records. Even the pediatric surgeons that crossover between the two sites have most often already provided care to these patients in the past. Additionally, surgical visits can be effectively integrated with follow-up oncology visits, thus reducing redundant information transfer. Without even taking into account these last two advantages, the costs associated with the process at the DFCI were less than 80% that of BCH’s process, which represents quite a substantial cost saving. Of course, this does not preclude another site from being able to offer even further value, but DFCI’s approach has definitely made more than a dent in enhancing patient value and process efficiency.
Thanks for raising these points, Surabhi. For pediatric care, there aren’t too many options for this kind of procedure beyond BCH. The possibility of outsourcing these elective procedures to satellite hospitals outside of the city was considered. However, time-based costing studies revealed that the cost savings were minimal because the process was still very much in line with a traditional OR procedure setup. The nice thing about the DFCI is that it is just across the street from BCH. Therefore, the same anesthesia and surgical team from BCH deliver care, but the nurses and support staff are DFCI employees and the process is much more streamlined. The physical proximity allows the DFCI to leverage certain resources from BCH (such as any emergency intervention), and thus the sedation clinic strikes a nice balance between acting as an autonomous care provision site and being able to still rely on the extensive resource pool at BCH.
Likewise, I think that this is a really interesting model. I would also echo Dylan’s concern about remaining competitive in the e-commerce world. It seems that Bonobos falls between the retail shop and e-commerce models where the Goldilocks middle ground may not be the best place to be. On the one hand, customers need to actually need to visit the guideshops to be sized appropriately and potentially pick out designs (thus operating similarly to a retail shop). However, in contrast to a retail shop, customers are unable to walk home with the product right away. I think Bonobos probably finds many creative ways of providing value to their consumers, but how clear is this value proposition to the consumer and what percent of target consumers actually benefit from this value to justify a purchasing process that is not quite as straightforward as either that of a retail store or e-commerce platform?
I love that you highlight all the elements that make the experience shopping at Net-a-Porter as exciting as a physical shopping experience. I would agree that these unique “touches” you mention have been critical in maintaining the firm as the premier online luxury retailer. I found it interesting that Porter subscribers tended to spend a lot more than the average shopper. Since a lot of the magazine is available online for free public consumption, I would have thought that this may incentivize some to view the editorial material and then pick between online retailers for the lowest price on a given item. Sites like ShopStyle make it very easy for items to be compared across multiple competing e-commerce platforms. On the other hand, the engagement with Net-a-Porter’s content and the expectation of superior customer service seem to lure luxury shoppers to stay loyal.