By REBECCA FOGG
The Theory of Disruptive Innovation, defined by Harvard Business School (HBS) Professor Clayton Christensen in 1997, explains the process by which simple, convenient and affordable solutions become the norm in industries historically characterized by expensive and complicated ones. Examples of disruption include TurboTax tax preparation software, which disrupted accountants, and Netflix, which disrupted retail video stores and is now giving Hollywood film studios a serious run for their money.
According to Christensen, a critical condition of disruption (but not the only one) is an “enabling technology”—an invention or innovation that makes a product or service (or “solution”) more accessible to a wider population in terms of cost, and ease of acquisition and/or use. For instance, innovations making equipment for dialysis cheaper and simpler helped make it possible to administer the treatment in neighborhood clinics, rather than in centralized hospitals, thus disrupting hospital’s share of the dialysis business.
However in an interview in Working Knowledge, the online newsletter highlighting HBS research, marketing Professor Thales Teixeira asserts that it’s not innovative technology that disrupts a market. Rather, it’s companies recognizing and addressing emerging customer needs sooner than incumbents. “…In many industries, both the disrupter and the disrupted had similar technologies and similar amounts of technology,” he points out. “The common pattern was that the majority of customers in those markets had changing needs and wants, and their behavior was changing.”
Well that’s interesting. Does Teixeira’s view on the role of technology in disruption, at least as summarized in the interview, contradict Christensen’s groundbreaking work? Not at all. In fact, Teixeira effectively reinforces an oft-overlooked nuance of the latter: disruption is not just about the innovative solution, no matter how novel, dazzling or slick the technology it may employ. It’s about using the solution to do a job for consumers that makers of incumbent solutions are ignoring—usually in a cheaper, simpler and more accessible way; and maximizing likelihood of success by aligning the innovator’s whole business model toward that end.
As I’ve written before, therefore, the lesson Christensen’s Disruption Theory teaches is not how to design a solution differently, but how to compete differently. How can innovators apply this lesson to disrupt health care? They can develop solutions that address people’s urgent, unmet need for quality care that helps each of us live the longest, healthiest life possible. That’s care that is so simple, convenient and affordable that people can access it regularly over time, and consistently get the help they need to effectively maintain their health or manage conditions that arise.
When innovators design health solutions to that end, and deploy them within a business model and value network specifically constructed to facilitate their delivery, they’ll create the conditions for cracking costly, painful problems like chronic disease. That’s how Disruptive Innovation can transform health care delivery for the better.
Telemedicine: It’s not (just) about the technology
Looking at the range of ways in which telemedicine is being used today illustrates the point that, regardless of the technology it employs, a solution can only be disruptive when it successfully addresses an unmet need in the market.
Telemedicine technology enables virtual consultations between health care professionals and consumers, and is often deemed disruptive. But when used simply to enable physicians in traditional health care models to consult with more patients in a day than they could physically see at their offices, the technology merely improves the status quo. It won’t help to disrupt it.
By contrast, CVS’ new telemedicine services, launched in nine states last year to complement the company’s retail “Minute Clinic” offerings, might just. Minute Clinics offer a wide range of routine preventive and clinical services, like vaccines and disease screenings; treatment for minor illnesses and injuries; and monitoring of chronic conditions—just like a traditional, primary care physician’s practice. But Minute Clinics are more accessible than the latter on several counts. There are multiple locations within a geographic market, clinics are open seven days a week, services are provided on a walk-in basis, and out-of-pocket fees, where applicable, are relatively affordable.
CVS Minute Clinic Video Visits significantly augment those benefits, giving consumers 24/7 access to a provider at a cost of $59 per consultation. That’s a far cry from traditional primary care services, usually accessible only during “bankers’ hours,” and costing an average of $160 for an uninsured person, according to researchers at the Johns Hopkins Bloomberg School of Public Health.
Together, Minute Clinics and Minute Clinic Video Visits could be a package solution that, for many people, begins to address that unmet need for continuous, proactive care designed to maximize healthy years of life. If so, CVS could prove disruptive to traditional health care delivery models (which specialize in episodic acute care) by locking them out of a massive and potentially lucrative new market.
Even more intriguing, CVS might eventually be expected to tap newly merged Aetna’s provider networks and underwriting expertise to integrate the full continuum of health care services with Minute Clinic’s consumer-friendly offerings. If so, CVS could accelerate disruption by siphoning off the traditional health care delivery model’s current patients, too—not just those with unmet needs.
That’s a lot of “mights” and “coulds,” because Disruption Theory only tells us what’s possible, while the long-term innovation strategies of CVS and its competitors will determine how the drama actually unfolds. However there are two things we can be certain about. Given the rapid expansion of telemedicine, as well as the brisk pace of innovation in Artificial Intelligence, big data, the Internet of Things and other hot domains, technology will play (in fact, is already playing) a critical role in the transformation health care delivery. But as Christensen’s and Teixeira’s work reminds us, it’s solving consumers’ unmet needs that will ultimately disrupt the industry, not beating competitors in a technological arms race.
Rebecca Fogg is a senior research fellow at the Clayton Christensen Institute, where she studies business model innovation in health care delivery, including new approaches to population health management and person-centered care.
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Telemedicine is new era of healthcare industry. its will grow with time with new technologies
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Ok seriously, telemedicine has been around a long time. If it was going to be disruptive, it would have done so already. It is frequently a solution looking for a problem. It reinforces frequently unnecessary care or referal streams. It has a few highlights of improving access for our correctional system and for psychiatry. It has some potential, but not the type being sold by the companies selling the equipment.
The Information and Communication Technology (ICT) is becoming an essential tool in many industries. Telemedicine has the tremendous potential to offer access to quality care and provide basic medical treatment to the entire population.
Thanks to sharing information…
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Thank you for the interesting content about Healthcare IT.
A pervasive absence of social capital best describes the affairs of contemporary healthcare. How often are we confronted with a social dilemma that is resolved with only a glimmering of Trust, Cooperation and Reciprocity?
Not exactly on point, but since it mentions CVS Minute Clinic I cannot resist sharing this recent epistle from me to my Medicare Advantage provider.
~~~~~~~~~~~~~~~~~
This has been a long saga but I will be brief. I have dealt with enough call center helpers to know that once you have accessed my file about this issue all the previous notes will be at your fingertips. I didn’t write down everyone’s name but the name “*******” comes to mind. When you see that name you have the right file.
In October I went to a CVS Minute Clinic for an inflammation in my left eye, not knowing (until it was too late) that CVS and Cigna do not have a working relationship. The NP running the clinic also didn’t know because when I gave her my card she looked at it, collected a ten-dollar co-pay, checked my eye and gave me a prescription which cost about seven bucks. A few days later everything was fine and I was happy to know that a trivial problem had been taken care of for under twenty bucks.
I was surprised a few days later to get a bill from CVS for $119.00 because CVS does not “take” Cigna Health-Spring MA. I was amazed to learn when I called the customer service number that sure enough, that is the case. After a few conversations with different people at the call centers and my insurance representative I was told to “appeal” the matter, that perhaps in this case Cigna would reimburse my payment of that bill (which I did pay, incidentally — promptly — without complaining to CVS).
There followed what seems to have been an endless routine of trying to get my money back from Cigna. Yes, I know, they/you are under no obligation to do any such thing. This is more a matter of customer satisfaction than following the “letter of the law.” As a retired food service manager I picked up more checks than I like to remember for complimentary meals, sometimes to whole parties, just keep them happy, hoping to keep their business in the future. (Silly me. I thought the insurance people might have the same impulse but thus far, not so much.)
At one point I was encouraged because someone who seemed to know what had happened assured me they could send the money to my bank because they didn’t issue checks. So I furnished them the routing number for that purpose and waited in vain until I learned it wasn’t going to happen. (I sometimes worried that I had somehow got hooked by a phishing scam, but the phone call was initiated by me, not Cigna, the connections all seemed to be routine, and whoever I was talking with appeared to already know the backstory from looking at the file.)
Subsequent calls led to the need to submit an “appeal” more formally, so I waited until Cigna sent me the proper form by mail. I filled it out the best I could, mailed it, and waited some more.
Eventually when I followed up by phone (always the same drill — menu of option leading to yet another voice in a call center who is invariably polite and patient, but who only finds the file with a bit of detailed coaching.)
One thing led to another until I finally called CVS to persuade them to send a fax copy showing my paid bill to a fax number someone at Cigna furnished me. Apparently it never got seen or may still be in a stack somewhere, because I later got word that they needed to get “something in writing” from ME indicating that the bill had been paid.
Our fax machine was not operable so I went to Staples, made a copy of the email validation from CVS that I had paid the bill, and sent that to Cigna via fax, ATTN:******, claim #**********, ID#*************.
The Fax I sent it to was 888-***-****.
After another long wait I again followed up via the same (only) customer service number and had a long, detailed conversation with a very helpful woman. (I wrote down the name “Gladys” on December 21, a few days before Christmas, so that is likely her name.) She was very helpful and I told her I was done with the phone calls and if I heard nothing I was just giving up and forgetting my $119.00.
Hell, I just got another one of those fifty-bucks gift certificate rewards for an annual physical so what’s to complain about?
To my ongoing surprise I received yet another communication via mail called “Notice of Denial of Payment” citing my member number (*********), claim number ************* for “date of service” */**/2018 (which makes no sense to me) and Total Denied Charges: $10.00.
The reason was because it was “not authorized” and suggested I take the matter up with my doctor.
I have no idea where the ten dollar figure came from.
What I have just described is a classic administrative clusterfuck.
I’m tired of writing and will submit this letter as my last attempt to close this file.
You will be able to reach me at my email by which I am sending it.
We also have a landline which we rarely answer when we don’t recognize the caller ID, but there is a caller message feature which we use regularly, so if you call, please leave a message. If we need to return a call, it must not be the generic number. I’m not going thru that again for this matter. ***-***-****
If you need more information I will gladly provide it.
Despite everything else, I wish you a Happy New Year.
We can share the hope that the next one will not have as many problems as 2018.