The evolution of new business in health care.

Abstract

The increasing size, growth, and complexity of the health care industry would appear to offer ample opportunity for innovation and entrepreneurship. But is entrepreneurship really on the rise in health care? We performed a sequential cross-sectional analysis of new, rapidly growing health care businesses in the Inc. 500 list to answer this question. We found that, while there appears to be increasing numbers of opportunities for new, privately held businesses, this varies widely by category. In particular, health information management appeared to be an example of emerging industry, characterized by increases in the number of businesses, as well as in the rate of growth and the average revenue. In contrast, the insurance industry seems to have transitioned to maturity. This article argues that companies that introduce disruptive innovations into health care, either through information technology, new ancillary services, or more focused services to the elderly, will likely be good areas for investors who follow the health care industry as well as entrepreneurs who are looking for a niche for market entry.