Matthew Holt

Disruption breaking out over at Scott Shreeve’s place

Clayton Christensen's publisher is pressing me to read The Innovators Prescription and then interview him. Sadly I haven’t had the time to pay the book the attention it deserves. Messrs Kuraitis & Kibbe already did a review on THCB and probably said what I’d say, which was that like several other Harvard Business School profs, they got the problem right but the solution wrong. I’m on record from a couple of years back saying that Christensen’s guns are aimed in the wrong direction.

But to be fair my criticisms are pre-publication. Scott Shreeve has a great interview with Christensen’s co-author Jason Hwang (the late Jerome Grossman is also a co-author). and in this interview several of the incentive issues which concern those of us who understand how innovation gets stopped in health care, are addressed. Well worth reading.

Scott is more of a fan of the possibility of supply-side innovation in the absence of demand than I am, so caveat emptor. I’ll try to read the darn book and get Christensen or Hwang on THCB shortly.

And of course Peter Orszag who seems to be becoming the de facto health care czar policy maker seems very interested in getting CMS to change the way it pays for care. Which might make these “innovations” actually financially viable for those undertaking them.

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2 replies »

  1. re: Dr. Kibbe’s note that Christensen/Hwang/Grossman ” don’t put enough attention on how_in_the_heck that can be changed when there is so much entrenched opposition.”; If I’m not mistaken it’s here that Matthew’s chief concern arises as well. C/H/G DO wax hopeful about the role of high deductible health plans in (basically) eroding the economic chokehold of entrenched health plans & health systems, even going so far as to point out with respect to charges of tepid hdhp adoption that it’s more useful to examine rates of change in % of market share than absolute market share in assessing uptake of the kind of innovation hdhps represent (see pp 250-51). It must be admitted though that these feel like the least-defensible, least ‘innovative’ sections of the book.
    In dismissing/neglecting the “importance” of financing innovation as a change driver, they seem more interested in following what people actually do than what they promise to believe in. That latter realm seems the home of financial ‘mechanisms’, particularly in the times we live in; so it may be that C/H/G are onto something?

  2. Matthew: Good framing of the issues, particularly the linkage between changing how Medicare and Medicaid pay providers and the opportunities for disruptive innovations in health care. I am a HUGE fan of Clay Christensen’s framework for understanding innovation, and use it every day. In the new book, The Innovator’s Prescription, the authors do make the point that innovative business models have been locked out by the fee-for-service reimbursement economy; my only criticism is that they don’t put enough attention on how_in_the_heck that can be changed when there is so much entrenched opposition. Every source of waste and duplication in the health care has its own constituency, and they support armies of lobbyists. Health care is not even close to a free market, which is where the theory and practice of DI has come from.
    So, perhaps Peter Orszag will be the key that unlocks the flood of innovation ready to hit health care. I certainly hope so. Kind regards, dCK

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