Is Disruption of Mainstream Healthcare the Answer to Our Crisis?

December 14, 2011
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I’ve been a fan of Clayton Christensen’s work.  The idea of disruptive innovations really resonates with me and provides a powerful framework for understanding how innovations are adopted (or not) by various businesses.  As I think about our healthcare dilemma (escalating costs, misuse of limited resources, shrinking access to care and, in general, creating a drain on our country’s economic health and competitiveness in a precarious global fiscal environment), I think about the construct of disruptive innovation quite a bit.

I’ve been a fan of Clayton Christensen’s work.  The idea of disruptive innovations really resonates with me and provides a powerful framework for understanding how innovations are adopted (or not) by various businesses.  As I think about our healthcare dilemma (escalating costs, misuse of limited resources, shrinking access to care and, in general, creating a drain on our country’s economic health and competitiveness in a precarious global fiscal environment), I think about the construct of disruptive innovation quite a bit.

There has been a lot of hand-wringing and discussion about how to fix this problem.  There is even a new series of buzzwords entering our lexicon (ACO, patient-centered medical home, bundled payments, shared savings, bending the cost curve – this is an incomplete list).  This last one amuses me – bending the cost curve.  Try as we might, those of us in organized healthcare can’t come up with ways to really cut costs.  We proudly talk about strategies that may keep costs from going up as quickly.  The goal of keeping medical inflation at the same rate as general inflation is often mentioned.  The trouble is, we’re starting out spending so much more than any of our developed world comparators. Yet, can we claim that the quality of care we deliver is as good as other nations that spend considerably less?  So is ‘bending’ the cost curve really enough?

One reason we have so much trouble is that so much of our costs are tied up in labor (56% according to one recent study).  As someone recently quipped, “in healthcare, a dollar saved is a dollar of someone’s wages lost” – or at least 56 cents of wage lost. Also, as classically described by Christensen in The Innovators Dilemma, most of our decisions are made either by physicians or in consultation with physicians. So many times over the years, I’ve witnessed interesting ideas brought forth and dismissed out of hand by physician leaders. “Our patients would never go for that….”or ”That would not work clinically,” etc.  Of course clinical judgment plays an important role in healthcare delivery and the perspective that a physician brings is valuable.  But when we’re talking about efforts to really manage costs, we have a conflict of interest. Can decision-making physicians really look objectively at solutions that are presented which might result in less demand for our services and may affect our income? After all, we’re only human.

Last week, I was privileged to be on a plenary panel at the 3d annual mHealth Summit in Washington. My predecessor on the panel is the President of Apollo Hospitals in India. He gave an impassioned speech (effective too, laced with humor and using his booming voice and stage presence) declaring that mHealth would go nowhere unless doctors were compelled to adopt it.

Our Center stands on the border between two very different worlds.

In one world, our healthcare delivery system is facing the hurdles alluded to above. Partners, the delivery system we work for does its best to move 7000 physicians and a large hospital system to a new reimbursement model and, consequently, a new care model.  It’s going slowly, but we’re viewed as leaders and we’ve done amazing things to try to get us there.

In our industry, there is more talk than ever about the potential of connected health, but not too much implementation just yet. In fact, the predominant strategy floating around involves hiring more staffing for better care coordination and improved quality.  Wait, didn’t I say that 56% of costs are labor?  So we’re adding more labor?

In the other world our Center lives in, consumers are moving to take charge of their own health, adopting connected health as either a personal fitness aid, or as part of an employee benefit offering (e.g., the work that Healthrageous is doing).  This too is in its early stages, but as I watch it unfold, I’m struck by the possibility that the health care cost crisis may be solved by innovation that occurs outside of the traditional healthcare delivery system.

One example that is interesting is retail clinics. They are flourishing now.  They are taking business away from our primary care physicians. No one notices because they are all so busy, but as retail clinics grow, at some point we’ll notice.  Another trend to follow is how Walmart re-invents primary care.  It’s early and speculative, but I’ll bet a week’s pay that this model will include some component of home monitoring and surely lots of opportunity for patient/consumer self-care.

At our Connected Health Symposium last month, we held a lunch for several companies who are ‘non-traditional’ entrants into connected health. We had participation from a beverage company, a consumer products company, and a large retailer to name a few.  Why are they all interested in connected health?  I’m just learning, but I’m sure if they smell a business opportunity it is unlikely to involve mainstream healthcare.

So keep an eye peeled for something to happen.  Some routine service that you think you must see your doctor for will be delivered online or in some much more convenient way.  God knows, today’s mainstream healthcare delivery is about as consumer unfriendly as you can get. So once something that competes and is convenient, a true sea change should be upon us.

What do you think? Can you conceive some truly disruptive concepts that will take business away from mainstream healthcare delivery and still deliver quality care?