Press Room
2009
Press Contact: Kenya M. Henderson
212-904-3346
kenya_henderson@mcgraw-hill.com
Disruptive Innovation Delivers Roadmap to Affordable, Accessible Health Care If quality, affordable health care is the issue and America is the battleground, then citizens, employers, medical professionals, pharmaceutical companies, insurers, special interest groups, and policy-makers are the opposing forces deep in the trenches, expending endless energy and resources to bring reform but barely gaining an inch. This is how Clayton Christensen, Jason Hwang, and the late Jerome Grossman describe the chaotic state of America's health care system in their new book, THE INNOVATOR'S PRESCRIPTION: A Disruptive Solution for Health Care (McGraw-Hill, January 2009). "Everyone recognizes the problem, but no ‘general' has been able to unite the firepower of the special interests and offer a cohesive plan to reform the system," says Christensen, the world's leading authority on innovation, a New York Times bestselling author, and a professor at Harvard Business School. In The Innovator's Prescription, the co-authors frame the challenges facing the health care system - skyrocketing medical expenses, rising health insurance premiums, and an alarming lack of access to quality care - within Christensen's groundbreaking theory of disruptive innovation. Originally described in his blockbuster seller The Innovator's Dilemma, disruptive innovation explains how entire industries can be overturned and revolutionized by the introduction of a simplifying technology that performs what dominant, incumbent businesses could only do at a much higher cost. The Innovator's Prescription explains how disruptive innovation in the health care system can similarly reduce costs while simultaneously improving the quality, safety, and convenience of care. Disruptive Innovation in Health Care The co-authors state that the disruptive innovation that will help transform the nation's health care system is already underway in the form of precision medicine. Advances in health care have led to targeted therapies that precisely treat specific conditions. These breakthrough technologies will begin to transform what was once complex medical care into a matter of routine - and simplified care means less expensive care. So far, however, "these technological innovations have not translated into lower-cost, higher-quality, or more accessible services," says Christensen. "The delivery of care has been frozen in business models that are inappropriate for precision medicine and keep costs unnecessarily high." That's because technological improvements must still be paired with innovative business models. Structural Changes The Innovator's Prescription identifies how the traditional business models of health care providers - general hospitals and physician practices - must adapt to the era of precision medicine and allow the current system to be disrupted by more coherent and focused models of health care delivery: • Solution shops, which diagnose and solve unstructured problems, should be used to address complex conditions. The work is generally expensive, because it requires highly-trained professionals working in a trial-and-error fashion. Historically, this has been the purview of most businesses in health care delivery. • Value-adding process businesses, which transform inputs of resources into outputs of higher value, should be completely separated from solution shops. Focused VAP businesses can dramatically lower overhead costs by relying on process excellence rather than trained experts. Outcomes are easier to measure and much more consistent in quality. • Facilitated networks, which coordinate interactions among buyers and sellers, should be used to care for people with chronic illnesses. Disease management organizations and Web-based social networking applications are examples of this business model. A New Value Network Finally, the co-authors of The Innovator's Prescription acknowledge the obstacles that stand in the way of systemic health care reform - namely, the institutions in the present commercial system that benefit from preserving the status quo. The co-authors describe a number of economic reforms that would allow the disruptive solutions to succeed: • Overhaul the reimbursement system, which holds little relation to cost, value, or outcomes, and which strangles innovations early and often. • Replace traditional comprehensive health plans with "true" catastrophic insurance and health savings accounts. • Integrate splintered organizations into cooperative models that encompass wellness and preventive care, sick care, and rational payment mechanisms.
ABOUT THE AUTHORS The late Jerome H. Grossman, M.D., was the Director of the Harvard/Kennedy School Health Care Delivery Policy Program. A nationally recognized health care policy expert and a pioneer in health informatics, his leadership spanned business and health care. He served as CEO of a major medical center, chaired the Federal Reserve Bank of Boston, and co-founded four successful companies. Dr. Grossman was widely known as an advocate for market-driven solutions for the reform of the medical care industry. Jason Hwang, M.D., is an internal medicine physician and Senior Strategist for the Healthcare Practice at Innosight LLC, an innovation and strategy consulting firm. He also co-founded and serves as the Executive Director of Healthcare at Innosight Institute, a non-profit social think tank. Previously, Dr. Hwang was a chief resident and clinical instructor at the University of California, Irvine. He received his M.D. from the University of Michigan and M.B.A. from Harvard Business School.
212-904-3346 kenya_henderson@mcgraw-hill.com |
