Understanding the low cost business model in healthcare service provision: A comparative case study in Italy

The cost of medical treatments may undermine timely and effective access to healthcare. We believe it is useful to examine innovative business models recently introduced in European countries, borrowing from less developed economies. This paper aims to analyze new business models of healthcare service provision that have recently been introduced in Italy, and its social component. In particular, we analyze the low cost business model in Italian healthcare. We carried out a comparative case study of three Italian low-cost organizations. The cases were selected using four social criteria: start-up capital; social value proposition; social value equation; and social profit equation. From the comparative case study, six main themes emerged: 1. Social relationships; 2. recruiting and engagement of medical and nursing personnel; 3. economies of scale; 4. cross subsidization; 5. management of financial surpluses; 6. patient involvement and participation. The cases reveal new ways of healthcare service provision and unravel innovative organizational dimensions falling into the low cost business model. The organizations both maximize profit and respond to the social need for healthcare at relatively low costs. The low cost business model is therefore able to respond to the demand for affordable healthcare, while providing social innovation.