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MANAGED CARE January 2009 ©MediMedia USA
Cover Story
Disruptive Innovations That Will Change Your Life in Health Care The innovations that we list here are not unfamiliar, but don’t underestimate them. As they mature, they will have strong effects.

By Maureen Glabman
Contributing Editor
In 1995, Harvard business school professors Clayton Christensen and Joseph Bower put “disruptive technologies” in the business lexicon by introducing the term in a seminal article in the school’s journal. The phrase described what happened in 1960, for example, when an unknown company, Sony, began selling an affordable transistor television that eventually replaced RCA’s vacuum tube. Soon it became apparent the transistor alone —the disruptive technology —did not tell the whole story. To achieve success, the technology had to be coupled with a whiz-bang business plan, giving birth to the encompassing term “disruptive innovations.” Sony, with its coveted transistor TV that many people could afford, and a plan to sell its TVs through Kmart, then a new retail chain, put both the more expensive RCA vacuum tube TVs, as well as the many mom-and-pop appliance stores that refused to sell Sony sets, essentially out of business.

Christensen has since written or co-written seven books on disruptive innovations, using the term to suggest how to mend problems in the worlds of business and education. They illustrate how upstarts using new technology can change an industry to make our lives better. But for the 56-year-old Salt Lake City-born economist, a Rhodes Scholar who served as a Mormon missionary, speaks fluent Korean, and became a Harvard PhD student at 40 with five children, his toughest challenge was to apply successful business concepts to solve the problem of vexing runaway health costs.

Better and cheaper
He teamed up with two prominent physicians and spent 10 years dissecting and pondering the issue. The result is The Innovator’s Prescription (McGraw-Hill, 2009), co-written by the late Jerome Grossman, MD, a founder of Tufts Associated Health Plans and former CEO of Tufts Medical Center, and by Jason Hwang, MD, MBA, an internist and co-founder with Christensen of the Innosight Institute, a not-forprofit think tank. “Disruptive innovations, like we’ve seen in other industries, can bring complex and expensive health care products and services to greater levels of affordability and accessibility,” Hwang says.The essence of the authors’ thesis is the view that America’s entire delivery system must change radically, adding lower-cost providers and lower-cost venues. General hospitals and physician practices, the two dominant models in health care, are inefficient and do not produce perfect results, they suggest. With the help of technology, some medical care can be transferred fromspecialists to generalists, from generalists to nurses, then to allied health professionals, and ultimately to patients themselves.

It may not require a board-certified family practitioner or internist to determine whether a sore throat must be treated with antibiotics since the rapid strep test is a proven technology that can be used by other health care professionals. And it isn’t hard to imagine that since diabetics and patients with clotting disorders now have the technology to test and inject themselves routinely, people with other chronic conditions could be taught to monitor and control their diseases in a similar manner. Christensen and his co-authors support single-organ hospitals, such as the 55-year-old Shouldice Hernia Centre in Ontario, because the same operations are performed repeatedly, precisely, and less expensively than by general hospitals. A hernia repair at Shouldice is about $2,300, versus $7,000 at a general hospital in the United States. As a further trickle down, complex work previously done at hospitals can be accomplished at outpatient diagnostic centers, ambulatory surgical centers, urgent care clinics...
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