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Mark D. Smith Disruptive Innovation: Can Health Care Learn From Other Industries? A Conversation With Clayton M. Christensen Health Affairs, May/June 2007; 26(3): w288-w295. [Abstract] [Full Text] [PDF] [Reprints & Permissions]

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Some Barriers to Disruptive Innovation

Bradford Kirkman-Liff   ( 14 March 2007 )

Social Support Needs To Be Part Of New Solutions

Joseph Meresman, Brent Lowensohn, Co-Director, Care Product Institute   ( 23 April 2007 )

Retail Clinics and Public Health

Lawrence H. Stiffman   ( 28 January 2008 )

Some Barriers to Disruptive Innovation 14 March 2007
Bradford Kirkman-Liff, Professor of Health Policy and Biotechnology W. P. Carey School of Business, Arizona State University Send comment to journal: Re: Some Barriers to Disruptive Innovation bradford.kirkman.liff{at}asu.edu Bradford Kirkman-Liff	Health care has had a number of disruptive innovations in past decades. In the United States the original prepaid group practices as envisioned by Henry Kaiser and Sidney Garfield were a disruptive innovation. Similar prepaid physician-employing health plans existed in Germany prior to 1937. The development of free-standing ambulatory surgery centers and community health centers were each in their own ways further disruptive innovations. However, the health systems in industrialized societies have powerful institutional and professional barriers that have blocked or minimized the growth of past disruptive innovations. First, physicians, nurses, and all of the other medical professions are very reluctant to allow changes in their professional scope of practice. It has taken decades to allow nurse practitioners and physician assistants prescribing rights, and those provider groups have long been involved in trying to improve access for the uninsured. Surgeons have been reluctant to step away from the operating table and allow technicians to perform routine tasks. Disruptive innovation involving "enabling or making more capable lower-cost providers" will face very powerful associations and lobbies in all 50 states. Second, patents allow "shadow pricing" for new disruptive technologies. If technologies reduce length-of-stay, the technology is often priced so that a larger share of the per discharge payment goes to the manufacturer. This practice is sometimes referred to a "value-based pricing": setting the price by the savings that accrue to the health system. Clinical trial protocols result in lengthy delays for the introduction of new technologies. Disruptive technologies must be affordable and accessible, and patents can delay that for years, even a decade. Third, medical liability standards do not generally permit physicians to voluntarily provide, or patients to accept, care that is different from the standard of care in the community. Only in limited situations can a patient consent to "second-best" care. Fourth, as Smith mentions, the current structure of high-deductible health plans and health savings accounts does not make the patient sensitive to the choice "between a $47,000 hospital bill and a $45,000 hospital bill." The 80 percent of health care costs consumed by 20 percent of the population -- which I think increasingly constitutes Christensen's "third class: the high end, nonstandard, medically complex cases" -- has to be more effectively addressed. Fifth, efforts at patient empowerment and engagement involving disease management, patient education and more self-care -- as Christensen describes in regard to his own diabetes -- have long been advocated by many in both the public health and managed care fields. The problem is that many plans would not pay for those costs outside of the traditional setting out of the fear that the increase in demand would be greater than then the cost savings from pure substitution. Many disruptive innovations have been attempted by public health and managed care organizations over the past 60 years. Disruptive innovations have an important role to play, but the politics of professional scope of practice, patent reform and shadow pricing, medical liability, and improved design of HSAs and high-deductible health plans are all necessary if disruptive innovation is to succeed.
Social Support Needs To Be Part Of New Solutions 23 April 2007
Joseph Meresman, Co-Director Care Product Institute, Brent Lowensohn, Co-Director, Care Product Institute Send comment to journal: Re: Social Support Needs To Be Part Of New Solutions meresmanj{at}pacbell.net Joseph Meresman, et al.	Clayton Christensen correctly and appropriately identified the introduction of disruptive technology as key to both reducing cost and increasing quality of care for the large number of patients with chronic diseases. His example of diabetes monitoring and care provided by a personal blood glucose meter and mail-in HbA1c and microglobulin test kits shows how miniaturized medical monitoring technology can enable a knowledgeable, motivated patient to achieve better quality at lower cost by taking greater responsibility for his own care. This direct patient-accessed laboratory improves access to care and enables low-cost industrial efficiency to replace inherently expensive laboratory services provided through health care providers. This direct-access model can work for patients who either are self-motivated or have some external reinforcement system. It is clear, however, that this type of patient is in the minority. Most patients will not follow self- care plans without the support provided by periodic interaction with physicians or other providers. The California HealthCare Foundation’s December 2006 “Building Peer Support Programs to Manage Chronic Disease: Seven Models for Success” points out that 50 percent of patients do not follow their diabetes medical prescriptions. Many of those who do presumably do not have the additional self-discipline to follow Christensen’s daily self-monitoring regime. Much of the reason for a diabetes patient to regularly visit his physician is not to provide expert medical advice or diagnosis, but rather to provide the patient with the support needed to stay on an established care plan. It appears that relying on physicians or other health care professionals to provide patient support and behavioral reinforcement is both highly expensive and of limited effectiveness. Other methods are needed to better integrate ongoing reinforcement into patient self-care. Limited studies suggest that providing women with social support and reinforcement improves their performance in maintaining prescribed treatment. Weight Watchers and Alcoholics Anonymous have shown how powerful social support can be in sustaining desired behavioral changes. This area is ripe for the introduction of disruptive technology as demonstrated by the rapid rise and acceptance of a variety of technology-based social networking tools outside of health care. An example that the nonprofit Care Product Institute is working on involves ways of notifying friends, family, or a health coach of the patient’s health behavior, enabling them to provide the needed social support. As these tools are developed and demonstrated effective, it will be possible to apply disruptive technology to address the larger concern of how to support the average diabetes patient, not just highly competent and motivated patients such as Christensen, in the consistent self-care needed to achieve higher-quality outcomes at lower cost.
Retail Clinics and Public Health 28 January 2008
Lawrence H. Stiffman, Owner Applied Statistics Laboratory Send comment to journal: Re: Retail Clinics and Public Health aslinfo{at}aol.com Lawrence H. Stiffman	The retail/in-store clinic movement is more than a highly beneficial strain of “disruption” to the primary health care delivery system. Looking forward, it should also be a significant catalyst and test-bed to improve community health status. Why Retail Clinics as the Locus for Change? Incumbents in the retail clinic space grow because their business case is compelling, enterprises are sufficiently capitalized, and customer experiences are highly scored by all relevant satisfaction metrics. These operations are still in early growth facing normal start-up woes: 1. Uncertain ROIs and break-even points, staffing, information capture and work-flow patterns. 2. “Without the doc” risk-averse service menus, voluntary script dispensing/selling firewalls, constrained spatial layouts, and low-ball pricing. Thus, there is plenty of wiggle room to now plan additional functionality as the kinks get worked out and consumer acceptance grows. As competition increases, investment drivers include the need for continuous product improvement and differentiation as well as for satisfying large customer cohorts shifting from latent to expressed demand for diagnostic, immunization, and screening services. In-store worker-focused risk assessments add icing to the convenience cake, especially by filling in off-peak appointment slots, smoothing work flow, and reducing queues and wait times. (Workers’ rewards must be nondiscriminatory per U.S. Department of Labor regs compared with customers’ rewards.) Like Lipitor, the “daughter products” released after its ingestion are more beneficial than the original dose. Sensible protocol-based and decision-supported adult primary care is the core retail clinic output platform now in place. Providing appropriate consumer-assisting programs with health systems co-venturers builds upon sunk investments at low marginal cost. In many urban and rural communities, the default locus for free “medical advice” has traditionally been the neighborhood pharmacist. The retail clinic can expand this tradition with one-on-one assistive and practical care in terms of fuller primary prevention services that are disease- or body-part specific. Many screening and testing services have been battle-tested in drug stores, at health fairs and convention lobbies, and within assorted clinics of all stripes. More recently, based on strong empirical evidence from workplace wellness settings, providing customized incentives and rewards is essential to “get people to the last mile” to initiate behavioral change. This might become an especially compelling strategy with the deployment of emerging home-based disease management products incorporating remote monitoring. Incentives could take many forms from reward programs to price discounts on in-store goods and services. Convenient Primary Prevention Would Gain Equal Footing with Convenient Care Given pervasive techno-chaos within the overall health care industry, it takes business discipline and standardization to harmonize appropriate processes and technology. Just consider the hundreds of options flowing from Web-based and traditional programming in risk assessment and personal auditing and tracking programming, including health risk appraisals, HSAs and derivative financial products, mini personal health records, electronic medical records, chronic disease management with remote monitoring, behavioral targeting, and one-on-one relationship marketing and loyalty card systems. Each of these now operate under different parentage -- from health departments, governments, self-insured large employers, progressive unions, managed care organizations, classic insurers, marketing services firms, and, increasingly, by customers themselves. Many have or will become zero-priced commodities. The good news is that all are adjunctive to enhancing the retail clinics’ care and caring missions. The retail clinic could assume employers’ traditional role in health risk appraisal to get incentive packages, monitoring, and benchmarking locked and loaded. Then, many follow-through tests and procedures are done in store with out-referral when appropriate. Record keeping would be online and really simple. It’s like installing training wheels for the emerging PHR and EMR systems. These convergent systems are typified by early developer groups such as WebMD while Google is constructing a PHR system. Caring Processes Are Inseparable from Care Processes Retail Clinic 2.0 positioning is not glitzy PR to deflect the opening blows by organized physician groups that wrongly perceive negative competition from nurse practitioners and others. The reality is all PCPs (and, more importantly, their patients) will be universally better off if they begin to mimic some of the critical convenience, staffing, IT, and pricing success factors put in place by the retailers. The docs are far from being disintermediated; they can be emancipated from the routine sniffles and scratches while remaining wired in, utilizing their time and skills more appropriately and productively. Ditto for our under-funded public health clinics that will face huge work flow and staffing problems as prevention and wellness eventually obtain public and private core financing. Latent demand for the 55-year-olds and kids is likely to explode if Medicare expands down and SCHIP widens. Recent AMA opening moves challenging the emerging retail clinic industry’s usurpation of physician roles and functions were inevitable. It’s fuming again but will lose the battle because: 1. Their economic self-interest becomes more visible than their patients’, 2. the inherent cost-effectiveness of the current approaches is readily apparent to customers (especially where services are insured), and 3. business groups, governments, employers, public health associations, and insurers all welcome price and quality competition wherever and whenever they find it.