ACHIEVING PRECISION MEDICINE & LOWER COST THRU DISRUPTION

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Twice this year, I have been privileged to hear Clayton Christensen outline the principals around disruptive technologies and their impact on redefining industries. I left Friday’s closing day general session, “Diagnosing the Disease: A Disruptive Remedy for Health Care”, equally excited, reenergized yet perplexed. AHIP, again, did not fail to provide that “moment of insight” for me.

What will be the disruptive technology to bring out the shift so needed in healthcare? How quickly might it occur and result in lower cost of care? Will I be a part of a new entrant’s technology, therefore ensured a winning formula, or I am already an incumbent and destined for replacement? How can we participate in driving the ability to diagnose diseases precisely and, therefore, establish the disruption? If you attended this session, hopefully, you are nodding your head and scrambling back to your notes to further get your thoughts composed. If you missed this first-rate presentation, know that Professor Christensen admitted he needed more than his hour to fully share all within this context but keep reading and I will gamefully outline my takeaways from his morning presentation:

1. Industries have always experienced substantive shifts in methodologies, costs, price and delivery thru the introduction of a disruptive technology. It seems the industry incumbents fall prey to enhancing their capacities such that they outstrip the customer’s ability or need to use the progressed capacities. Even in healthcare this can occur, though I am concerned that almost always the entrant offering the disruptive technology is most successful by offering a capacity slightly less to-begin-with than the capacities offered by the incumbents. Does this mean we must sacrifice existing medical quality & performance (though not necessarily always affordable & accessible) in the short-term to advance healthcare? Are we as a society willing?

2. Disruption among healthcare institutions is underway via the evolution from Hospitals to Outpatient Clinics to Patient Home Centers. Another point of view is the shift from the Specialist Physician to General Physician to Nurse Practitioner to Patients & Family. Embedded within this disruptive shift is reality that one cannot expect the Specialist to offer affordable or lower cost of care.

3. Business models tend to shift from Experimentation & Problem Solving (“Intuitive Medicine” by “Solution Shops”) to Pattern Recognition (“Experimental Medicine” by “Process Businesses”) finally to Rules-Based (“Precision Medicine” by “Facilitated-User Networks”).

4. As Solutions Shops (hospitals) were founded on the principal of “figuring out what’s wrong”, the business value prop of doing everything to everybody is extremely difficult to maintain as payment (Fee for Service) cannot be contingent on outcomes. In the Process Business around medical procedures, the process, rather than people, drives the outcome and is predictable. Fee for outcomes is acceptable. Yet I not convinced evidence-based medicine doesn’t take a back seat. Finally in Facilitated User Networks the focus is on precision such as individual disease management, personal genomics and prescriptions.

5. Professor Christensen asserts that many high-potential reforms in healthcare have been destroyed by trying to force the technology into the existing system when creating a new dimension or delivery would better be served. Integrated care givers will have significant advantages over the existing plane of delivery.

Some heady material but yet a discussion that I believe must be kept at the forefront. How many good ideas have you been involved in around medical payment, delivery, cost, price and methods but you blamed “execution” for its failure to evolve? Perhaps we’d all be better served by working to create that new dimension or system? Does this mean the Democrat’s general proposals for healthcare is that system? Or, perhaps we would be better served by nurturing new patient/consumer behavior & attitudes to drive a disruptive entrant into healthcare? Can we leverage advanced analytic approaches in other industries to redirect the course health providers and payers are on? How can you ensure that the results of analytics are used in decision-making?

I do believe that healthcare has evolved such that it is ripe with receptiveness for an entrant with a disruptive technology to remedy healthcare. In Professor Christensen’s initial discussion of the steel and transistor industries, he refers to the teenager as the “Rebar of Humanity”, inferring their willingness to adopt the disruptive technology to accept a lessor quality sound for the personal advantages of the transistor radio. I just hope that the patient, provider & payer communities can redefine the traits that accept initial disruptive technologies so that we don’t sacrifice healthcare quality.

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About Author

Rick Ingraham

Principal Industry Consultant

Rick has served as Health Intelligence Officer within SAS Federal, LLC since April 2011. He presents 20+ years of executive-level health experience in both the provider and payer settings and served SAS as senior healthcare strategist for 1998 to 2008. He served as global health & life sciences director within Teradata until rejoining SAS in 2011

1 Comment

  1. Just a friendly comment - "principles" might be a better word choice than "principals" in the context of your discussion.

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