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Disruptive Innovation: Life After Clayton Christensen’s ‘Innovator’s Prescription’

disruptive-innovation

Clayton Christensen pioneered the idea of disruptive innovation. Photo via Vistage.

When it went to print in 2008, “The Innovator’s Prescription: A Disruptive Solution for Health Care” set off a chain reaction, influencing the way we think about healthcare by explaining why our system is organized the way it is and what it could potentially become. The book, written by Harvard Business School professor Clayton Christensen and two of his colleagues, Jerome Grossman and Jason Hwang, hinged on the idea of disruptive innovation.

According to Christensen, disruptive innovation transformed existing sectors by introducing simplicity, convenience, accessibility and affordability where high cost and complexity were the norm. This kind of innovative system is successful because it will eventually catch up to the existing system and ultimately replace it, Christensen said.

It’s been six years since the book’s original publication – and it’s clear that even more disruptive innovation is needed. So why isn’t it happening more? What might our system look like today if it did?

The Clayton Christensen Institute

The Clayton Christensen Institute for Disruptive Innovation is a nonprofit, nonpartisan think tank that focuses on research and public outreach with a current focus on education and health care, all hinging on cultivating a culture of disruptive innovation.

Ann Christensen

Ann Christensen follows in her father’s footsteps, pushing for disruptive innovation within the American healthcare system. Photo provided.

“The Institute was founded because we believe to really transform a sector, you can’t just publish a book and throw it over a wall,” says Ann Christensen, Clayton’s daughter and President of the Institute.

From a healthcare perspective, progress tends to be somewhat slow because our healthcare system is large and regulation makes disruptive innovation difficult. “We have done a lot to improve the quality of health care, but not as much to improve its accessibility and affordability,” Ms. Christensen says.

Spencer Nam, a Senior Research Fellow in Health Care for the Institute, further explains that due to the size of health care and the degree of its complexity, we often focus on one narrow solution when we try to improve the sector. But is that a good strategy?

“We are beginning to wonder if that is the right strategy and are looking for ways to address the entire health care system all at once with broad implications up front,” Nam says. “We have to think about integration issues with our solutions and their implications… we tend to struggle with seeing the big picture, and we often don’t see how decreasing the cost in one segment might increase the cost elsewhere.”

Cultivating Disruptive Innovation in Healthcare

Where, then, is the largest potential for cultivating innovative solutions despite the systematic barriers of healthcare?

“From the disruptive innovation angle, we look at the small players as the potential solutions,” says Nam. Large players already in the sector cannot move as nimbly, he explains, whereas smaller enterprises can make moves more easily and evaluate what they have done against their initial proposition. Smaller entities also tend to be more respectful of integration issues with other stakeholders in healthcare, Nam says.

Ms. Christensen looks at the CVS Health Minute Clinic as a good example of disruptive innovation in healthcare. Because these minute clinics worked in states where Nurse Practitioners could write prescriptions, other companies interested in running a retail clinic could then approach individual states to change regulation in this space. Minute Clinic demonstrated that it could provide greater access to care safely and cost-effectively.

The promise for healthcare also rests in defining a workable system and creating proof points – places where there is evidence of effective disruptive innovation. If we could understand what the individual components of an integrated healthcare system would look like, it could then be modularized and ultimately optimized, Ms. Christensen says. Leading integrated systems like Intermountain Health Care and Kaiser may fill such a role.

“We might learn that a nurse practitioner can do something very safely with the best of outcomes, and we don’t need a doctor to do it. Then all of a sudden you have a lower cost piece of the system so you can move the needle on cost without adversely affecting outcomes,” she explains. “This can create a proof point to change regulation.”

Another area for possible proof of concept, according to Nam and Ms. Christensen, comes in the form of mobile health applications or telehealth opportunities.

Spencer Nam2

Spencer Nam, a Senior Research Fellow in Health Care at the Clayton Christensen Institute.

“If you think about wireless phones, we have a global standard. You can use your phone when you go to India, you just have to pay more,” Nam says. “If we have a healthcare app, whether it be telehealth or a sensor-type solution, if that data is collected on a predetermined standard that everyone agrees on and understands, that data now becomes relevant to a United States setting. Mobile health decentralizes health care…it can give immediate solutions and may even decouple the payer system as a consumer product.”

“[Mobile health care apps] may also allow us to track patients so they might not need to be in a nursing facility if we can check on them remotely,” says Ms. Christensen. This could have big implications in transforming health care by reducing health care costs and keeping patients where they are typically most comfortable: at home.

Cost transparency efforts are also gaining ground in the disruptive innovation sector. “Direct pay models are also emerging slowly but surely… we may find that the role of third party payers and insurance companies will decrease over time,” says Nam.

That sounds like a lot of answers to a big question – which it is. Nam says that healthcare may be too complex to look to just one solution. “If you have a serious disease like cancer, you do not have many possibilities,” he says. “One possible outcome is that the host dies. The other is that you try to eliminate the cause of the disease and help the body to recover. We [the Institute] are looking at ways to replace core problems in our health care system with new ideas. We need to change the language of our discussion and we are trying to provide new vocabulary to describe the problems.”

“We are also looking at integrated delivery of care and what we can learn from that,” says Ms. Christensen.

Ultimately, “disruption is a life force of a human ecosystem,” Nam says “It allows new ideas to continue to develop. The term disruption sometimes sounds a little negative, but without disruptive innovations, chronic systemic problems could emerge. That is what we are seeing in health care and that is what we are working to change.”

Jessica Shanahan

    Jessica Shanahan, MD is a practicing anesthesiologist. She is interested in entrepreneurship in medicine and medical education. She lives in Brookline, MA.

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