Co-Creation and Healthcare Operations Management

Co-Creation and Healthcare Operations Management

Paul Lillrank (Aalto University School of Science, Finland)
DOI: 10.4018/978-1-5225-2084-9.ch020
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Service research has produced a definition that sees services as the integration of customers' and producers' resources to co-create value. Clear articulation of hitherto obscure phenomena enables sharper thinking on how such phenomena could be managed. This article discusses the implications of co-creation in healthcare, a sector of society that is perceived as difficult to manage. Co-creation is here understood as a variable that has different intensity and significance in different areas of healthcare. The Demand – Supply –based operating logic (DSO) is used to segment health service production into areas where co-creation appears in different roles.
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The Definition Of Services

The conceptualization and management of services has a long history. The Physiocrats and the early classical economists did not see the immaterial as economically significant. Since services do not create permanent inputs to economic growth, how could they be of value? The majority of service workers were domestic servants. The employer-employee –relation was embedded in tradition and authority so what would be the need for service management?

With increasing wealth the service sector expanded. By the mid 20th century it was close to a third of advanced economies, now more than two thirds. Such a large chunk of economic activity could not be ignored. A new way of conceptualizing services developed within Marketing. The novel idea was that immaterial value could be created and traded. Services might not have a physical form, neither can they be owned, stolen nor returned, but they can be priced, sold, and bought. This line of thinking has been crystalized in the IHIP –definition: services differ from physical products in that they are immaterial, therefore also heterogeneous, inseparable, and perishable. IHIP, however, was not the end of history. There is a large spectrum of services, from housecleaning to legal advice, from taxis to heart transplants. A definition to cover them all from the position of the immateriality of the offering produced inconsistencies, contradictions, and an endless debate to determine, what is service and what is not (Zeithaml, Bittner & Gremler, 2013).

A decade ago a new line of thinking emerged. Services were defined from a production perspective as cocreation of value, that is, the defining characteristic of service is that customers participate in production. They may do it in person (dentistry), through their property (car repair) or by means of individual information (insurance claims). A dichotomy emerged between the traditional Goods –dominant logic (GDL) and the new Service –dominant logic (SDL) (Vargo & Lush, 2004; Sampson & Froehle, 2006). Focus shifted from services as products to services as production

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