Virtually Priceless Thoughts

Here is an interesting conference on line from Mayo. I’ve just watched Clay Christensen’s keynote on disruptive technologies and healthcare.

He spends time comparing business and healthcare and does it quite well.

An interesting piece at about 21 minutes, where he talks about non-disruptive competition leading to increased prices. He gives examples in the Boston-area and others where head on competition results in increased prices. Competing groups tend compete on features, driving up costs.

He argues that disruptive technologies come in that are simpler and cheaper. They enter the marker in a related, but more decentralized market that could not afford the incumbent’s full product but could use some features (his big example was the mainframe computer being disrupted by the minicomputer being disrupted by the personal computer). Each one was increasingly cheaper, less powerful, and more widely available – they were increasingly decentralized and thus were able to provide value in markets that where the others could not / would not compete and then provided more over time.

In healthcare this means enabling outpatient services and primary care to do many of the things that hospitals do. IV antibiotics, for example, could be given at my clinic much cheaper than they could in the Emergency Department, with all of its overhead, skills and equipment that are there, designed to manage acute traumas and heart attacks.

Today, our nurse practitioners and nurses in my clinic do many of the things I might have done in my private office (or might still be done in a typical family physician office without nursing support).

This decentralization ultimately would extend out far beyond the walls of hospitals directly to patients, providing them with the technology for self management.

Three Enablers for disruption to be successful:

• Simplifying Technology – that can maintain quality
• Business Model allows for innovation
• New Value Ecosystem that can consume the disruptive technology

At around 39 minutes, he makes a statement that general hospitals are not a viable business model and spends some time talking about types of business models and how general hospitals are really a mush of all three major types of models. No wonder that hospitals and the flows of patients through hospitals are so complex.

He ends with an interesting piece on where chronic disease management is best situated, in terms of motivation. While I have concerns about heavily engaging employers in patient care, I found his mapping of motivation and requirements for behavioural change something that resonating both my clinical experience and my work on PHRs at the National Research Council.

Here’s a version of his chart from my notes:

(click for larger version)

I found this an hour well spent – thanks KL for the link to this excellent talk.

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