In Innovator’s Prescription, Clayton Christensen demonstrates how products and services evolve in a way that makes technology available to people. Granting access to technology to people who previously did not have access to it constitutes a disruption to traditional providers of products and services. Ultimately, to continue to succeed in business and to play a role in the delivery of products and services, traditional firms must react to disruptions from innovation. If these fail to do so, their demise is predictable. To these traditional firms, Christensen prescribes an unexpected antidote against disruption. Also note that these principles apply to industries beyond healthcare.
Importance of Innovation
Disruptive innovation grants access to technology to people who previously didn’t have it. The main application in healthcare involves decentralizing specialized services. Clinical services that were once performed only by specialized physicians can subsequently also be performed by general physicians. Technology and standardization allow less educated or less specialized care providers to offer the same advanced services at a lower cost. Nurse practitioners delivering care previously relegated to physicians is another example of this advancement.
Furthermore, moving technology from large (do-it-all) hospitals to outpatient clinics or to community family doctor offices also represents making technology accessible to people who previously did not have it. Lower costs that translate to lower prices benefit patients. In addition, care gets closer to home and is more accessible. Contrast this with a long wait for an appointment with a specialist at the traditional large provider.
Difficulty of Innovation.
Decentralization obviously impacts the traditional specialists. These were accustomed to providing very high quality products and services but are now threatened by smaller providers who are more agile by virtue of new technology and standardization. The ensuing reaction by traditional specialists limits innovation. The traditional healthcare system protects itself from innovative newcomers by holding on to technology at the specialist level. This keeps specialists highly paid but also drives up costs. Consequently, Insurance payers who want to limit payouts plant themselves between patients and specialists and further limit access to the technology held by the specialists.
Examples of Innovation
In a system like Kaiser Permanente, where the provider and the insurer are one, technology has become more accessible. Nurse practitioners at Kaiser, for example, have more freedom to perform procedures and this is driving costs down. Core Rehabilitation and Spine Center, a start-up Physical Therapy clinic in Salt Lake City, is innovating in the same way. The appointments page of this start-up’s website states: “Not all PTs diagnose, but we do. Our effective treatments come from a precise diagnosis of any mechanical problem in musculoskeletal structures.” This constitutes a push by the new player to assume a higher responsibility in the care of patients.
Christensen describes the evolution of services as follows:
- “Intuition” where the brightest scientists discover and develop breakthrough methods.
- “Empirical” where patterns are studied and are applied to cases.
- “Patient Centered” where technology and care have reached the most accessible point.
At Core Rehabilitation and Spine Center, Root cause analysis, evidenced-based practice, and individualized care come together for the sake of improving outcomes. This is evidenced by the deep, yet accessible treatment knowledge that is shared with patients, even before they step into the clinic.
Christensen’s final note concerns what the traditional heavy weight must do to succeed in this threatening climate – Setup a separate business unit tasked with innovation and even tasked with surpassing its parent and ultimately killing it. Business managers who only protect their traditional business units are at risk of losing out to innovative competitors.