Does healthcare need a disruptive innovation?

Posted on: 09.03.2018
Two hands: one robot hand and one human hand

In recent years, many technological health initiatives and companies have been launched. They are basically inspired by the great opportunities offered by today's technologies and driven by the need to reduce costs and increase the quality of the provision of health services. However, a large number of these projects fail. They are not able to articulate a clear value proposition for patients or lack a formula for generating sustainable benefits1.

The great challenges of the market

In addition, we must add that we have been trying for a long time to provide global solutions to major challenges in the health market. Fragmentation of care and lack of coordination, lack of a retail market, regulatory barriers and reimbursement are the big issues in any forum of health experts. And in my opinion,  the trees do not let us see the forest.

How could a technological mentality transform health?

Recently, I read that disruption is a process where a technology or company seeks to unseat a dominant company adopting an "aggressive" and defined strategy. Thus, the competitor enters the market from below, focusing on less demanding consumers, or those forgotten by the market, offering them a product in their reach, with a lower price and with low benefits, at least at the beginning. The Theory of Disruptive Innovation helps explain how complicated and expensive the products and services eventually become simpler and more affordable2.

 

Creative Destruction is another interesting concept to relate (thank you to the review to my friend Miguel Angel Mañez). Developed by the economist Schumpeter in 1950, which defines it as "an industrial mutation process that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." In a way, I define it as a sweet contradiction.

Health market, technology in the cross hairs

The main technology companies are watching the world of health, and Silicon Valley is already interested in the healthcare market. Here is why it could be a good thing:

  • On the one hand, we have Apple, previously with Research Kit, then with CareKit and, recently, it has announced that it wants consumers to store their health records (EHR) on iPhones.
  • On the other hand, Amazon has a strategic healthcare partnership to intervene with the medical care for their own workers, assume the distribution of drugs or use Alexa as a health assistant.
  • Or also the different attempts of Google, first with Alphabet, and then creating Verily with its recently strategic change towards health insurance. Creating a service like Life Sciences that is working on the glucose-sensing contact lens, and Calico is focusing on taking care of the longevity. And the recent purchase of Flex for the use of Google's cloud for medical gadgets.
  • Or Uber is introducing Uber Health to remove transportation as a barrier to care.

Technologists are looking to take risks for patient populations and reduce the costs of medical care. They are moving towards an industry where lines between traditionally different areas, such as pharmacies, insurers and suppliers, are increasingly blurry.

 

Value proposition towards the HEALTH of patients

Russ Ackoff (the pioneer of systems thinking) said: "the health care system in the United States is not a health care system, but a health care system based on disease and disability" and could perfectly be extrapolated to any health system in the world.

From the business point of view, Ackoff said, "the worst thing that can happen to the current system is to focus on health". That is why Ackoff believed that "the conversion of the current system to a health care system would require a fundamental redesign".

Are we talking about disruptive innovation?

And as a final reflection, where are the disruptors in healthcare? Do you think that technology companies should participate in the conversation of global Healthcare events such as #HIMSS18? I leave you with a twitter-survey that John Nosta did during the American congress of HIMSS in Las Vegas and you can judge for yourselves.

 

About.me: https://about.me/merce.bonjorn

Resources:

  1. Mettler, Tobias & Eurich, Markus: What is the business model behind e-health? A pattern-based approach to sustainable profit. 2012. - 20th European Conference on Information Systems. - Barcelona, Spain.
  2. Hwang, J. and Christensen C.M. (2008). Disruptive Innovation in Health Care Delivery: A Framework For Business-Model Innovation. Health Affairs 27, no. 5 (2007):1329–1335; 10.1377/hlthaff.27.5.1329

Mercè Bonjorn Dalmau​

PhD Marie Curie Research in CATCH Project - SDU University of Southern Denmark