Disruption Driving Change

Technology and healthcare reform are driving shifts in healthcare from volume to value and from providers to patients. Organizations ready for these changes are the ones with the best chances of successfully braving the disruptive waters.

The internet and consumerization are serving as disruptors in the healthcare industry, says Kevin Finkenscher, MD, president of the American Medical Informatics Association (AMIA). “The internet has allowed for knowledge diffusion. Physicians and their authority are being challenged.” Physicians, lawyers, architects and other professionals have long had guilds constructed around the notion that they have a unique set of knowledge to share with the public. Now, however, people no longer have to see a physician to learn about the best treatment for their conditions because they can get the information online themselves.

Meanwhile, people are using apps and other tools to share their opinions about healthcare providers. “Again, that is causing a disruption in traditions,” Finkenscher says. How that will play out is yet to be determined, he says. Analysis of electronic data is “going to discover patterns of care we didn’t even know existed. It’s going to change the very notion of how we deliver services.”

Healthcare reform has driven a shift to population health management that is causing organizations to make strategic decisions regarding organizational framework and business models, says Clay B. Marsh, MD, chief innovation officer at The Ohio State University Wexner Medical Center and executive director of its Center for Personalized Health Care. Today, there are financial incentives to make the shift but those who wait, he says, will find themselves spending more of their own money caring for patients. “Many organizations are looking at disruptive solutions to keep populations healthier because it is in their best interest to do so.”

Changing the landscape

Marsh’s organization is working to make it easier for people to live a healthier lifestyle. “Our goal is to change the environment so it makes sense to live in a better way through better food choices, more exercise options and more. We cannot make that happen but we can facilitate that by helping people navigate good decision making.”

Marsh’s center is interested in creating a sustainable and scalable set of solutions to get people to live healthier lives. “We are very interested in being part of that early wave of groups trying to create that series of solutions.”

Healthcare can learn from successful businesses such as Apple and Amazon, Marsh says. Apple’s Newton tablet PC failed in the 1990s because there was no internet or iTunes store, but the iPad has been successful because the company created an ecosystem to support the hardware. iPhones and iPads are really just conduits to get into the Apple world, he says.

And, Amazon has put everything a person could want or need under one roof. “Having that one place to go to navigate is a really exciting vision. Shopping and ecommerce have become much more distributed because of the internet. Now, what is really needed is some ability to navigate all the choices.” Marsh envisions a solution where Consumer Reports meets Amazon.

  • Focus on the need, not your solution: Do not focus solely on the new technology but rather the root of the problem the technology is solving, says Jill Seidman, director at Healthbox. If an entrepreneur becomes too attached to her solution, she may miss the bigger picture and opportunity. 
  • Get in the trenches: Entrepreneurs cannot grow a healthcare company behind the computer. They must categorize, understand and work with all of the different stakeholders that influence, touch and purchase their product to grow a sustainable business, Seidman says. “In healthcare, the people who support, use, purchase and benefit from a specific technology may all be different people with different desires, and entrepreneurs must navigate these differences to build a successful company.”
  • Utilize your mentors effectively: A diverse group of mentors is critical for healthcare entrepreneurs as each mentor should supply a different perspective. Mentors have different backgrounds and areas of expertise and cannot be expected to be experts in every area of your business, she says.  

The healthcare industry is complicated and risk-averse, with challenges that cannot be solved simply, says Jill Seidman, director at Healthbox, a company geared to helping its client stimulate early-stage innovation. “We are constantly stressing three points to our portfolio companies, regardless of stage.” (See box above.)

Forward thinking

“If I was the CEO of a large healthcare system, I would have my disruption team considering how to use the disruptive forces that are out there,” says Finkenscher. “That’s how you stay ahead of the curve.”

Innovation requires the ability to fail which has not been part of the healthcare culture. “People are afraid to innovate. The caution of many leaders in healthcare is incredible.”

A successful disrupter in the healthcare industry is someone who can figure out how to: 1) build a company within a conservative healthcare system while 2) pushing the boundaries of that system to think about something differently, says Finkenscher. But, if you’re “too far ahead of the industry, the entrepreneur will struggle to find adopters and gain the necessary market traction; not be innovative enough and industry is going to purchase a similar product from an established company.”

Ongoing evolution

Disruptive companies really embrace change and innovation, he says. The qualities of a successful disruptor are not necessarily going to change in coming years, Seidman says, but they will be amplified as the market grows more competitive and crowded with new and exciting solutions. “Healthcare reform has created so many new opportunities for healthcare entrepreneurs as the system is looking for ways to care for a large new population of insured patients and improve care coordination to meet the demands of the new innovative payment models. However, this means that established healthcare organizations have a new set of challenges that they have to address faster and more accurately than ever before. If disruptors are too far beyond current concerns, they will not find customers to adopt their technologies.”

There are always going to be evolutions in healthcare, says Marsh. Hospital consolidation and the purchasing of practices means there will be very few practitioners who aren’t connected. Meanwhile, people are becoming more comfortable with using technology to monitor their diet, exercise and sleep, for example. And, advances in biology will “push medicine from one size fits all to an ability to understand people at a more precise level. Medicine is evolving rapidly even as it is challenged financially and from a regulatory standpoint. We’re at such an exciting time in medicine where we can really start to help people in a meaningful, personalized way. Our goal is to get out ahead and predict what might happen to you and try to intervene to avoid cancer, heart disease and other serious diseases.” 

Beth Walsh,

Editor

Editor Beth earned a bachelor’s degree in journalism and master’s in health communication. She has worked in hospital, academic and publishing settings over the past 20 years. Beth joined TriMed in 2005, as editor of CMIO and Clinical Innovation + Technology. When not covering all things related to health IT, she spends time with her husband and three children.

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