Neel Mehta
Harvard Business School Professor Clayton Christensen’s model of “Disruptive Innovation” is a paradigm that puts the chaotic competition associated with game-changing
advancements in technology into perspective. And, according to Professor Christensen, the biggest opportunities are in healthcare. Because healthcare is something everyone consumes, he says, we are desperate to make it affordable and accessible. “Demand is robust. [It’s] a great opportunity for disruption.”
Healthcare demands an agile, low-cost business model that fully integrates IT to compete across the vertical healthcare spectrum, from entry-level markets with low profit margins upwards. It doesn’t matter if you’re a billion-dollar integrator or a newcomer trying to land your first contract: the disruptive model will rewrite the rules of healthcare.
The technological breakthroughs have already been made. The opportunity lies in process automation. A company with a low-cost business model that increases the capabilities of low-cost care providers will prosper while a company trying to bring down overhead costs at Mass General will flounder.
“Affordable care does not come by expecting the high-end expensive institutions and caregivers to become cheap, but by bringing technology to lower-cost providers and venues of care so that they can become more capable.” Says Christensen.
For an example of a disruptive healthcare model, think angioplasty. Angioplasty used to be a cheap but dangerous (half of patients died within a year of surgery) alternative to coronary bypass. However, as technology evolved, costs remained low while safety improved. Cardiac surgeons were reluctant to give up the robust profit margins of open-heart surgery, so they passed the stent procedures on to cardiologists, who were glad to have the extra business. End result: cardiologists get more business, heart surgeons keep performing surgery, and consumer costs drop.
Bottom line: be angioplasty. Be reliable, cheap, and “idiot simple” to dominate the healthcare marketplace. For more penetrating and insightful commentary from Professor Christensen, click here to view his lecture on the disruptive model.
