MedCity Influencers, Hospitals

If incumbents can’t transform healthcare, disruption will.

A MedCity Influencer responds to a post that calls into question the value of the theory of Disruptive Innovation, as conceived by Harvard academic and management expert Clayton Christensen.

Editor’s Note: This MedCity Influencer post from Rebecca Fogg, a senior research fellow at the Christensen Institute, is a direct response to a post penned by another MedCity Influencer — Jack Stockert, managing director, Health2047 — where he debates the value  of Disruptive Innovation in Healthcare, a theory created by Harvard academic Clayton Christensen. Usually, MedCity Influencers are not allowed to refer to their own employers within their posts to safeguard against self-promotion. We have made an exception in this post to allow for greater dialogue on a topic of interest: the transformation of our healthcare system. 

Last year I wrote a blog citing four signs that disruption is accelerating in healthcare delivery. I find this very encouraging, because Disruptive Innovation has a crucial role to play in America’s urgent quest to make high-quality healthcare affordable and accessible for everyone.

But not everyone sees the positive potential in disruption. Last week, Jack Stockert’s response to my blog conveyed disdain for the phenomenon, based on the fact that “disruption’s synonyms include breakdown, collapse, disarrangement, disturbance, havoc, upset,… Is this what we actually want or need?”

It is true that disruption, like any transformation, inevitably forces some organizations and individuals down a path they would rather not tread–one which, unfortunately, may well involve upset or collapse. But Stockert’s narrow perspective on disruption’s impact indicates a misunderstanding of the phenomenon as Clayton Christensen first described it in The Innovator’s Dilemma.

At its core, disruption is a business strategy through which innovators offer simple, convenient and affordable solutions addressing market needs that incumbents are ignoring. When the strategy is successful, disruptors lure customers away from incumbents, and/or lock them out of growth opportunities. When it’s really successful, it can transform entire industries by setting off a chain-reaction of competitive response whereby other players replicate the disruptive strategy, until it defines performance standards and cost structures for the whole industry.

So to answer Stockert’s question, is this actually what we really want or need in healthcare? Most definitely. Because disruption is one of the most powerful mechanisms we know for overcoming what Stockert aptly describes as many powerful incumbents’ “ruthless resistance to any alteration of the status quo.”

Disruptive Innovation fueled Netflix’ victory over Blockbuster Video, which boasted 9,000 stores and $6 billion in revenues at the peak of its success. It helped drive global shipments of smartphones, which make common computing functions simple, accessible and affordable, from 122 million in 2007 to 1.6 billion in 2018; whereas global PC shipments have declined from approximately 270 million to 260 million in the same period, according to Gartner research. And it’s not just a tech phenomenon — it has bested incumbents and triggered sweeping transformation in industries ranging from steel manufacturing and book retailing to accounting and higher education.

At the Christensen Institute our ongoing research into such cases is the basis for our belief that disruption has a critical role to play in healthcare transformation. Successful disruptions addressing America’s need for high-value care will either motivate stubborn incumbents to work harder at figuring out how to address the need themselves, or relieve them of their influence in favor of those competitors who will.

In a nod to Stockert, America will be best served if all the expertise, compassion and drive locked up in our current healthcare system today can be leveraged in the better system we envision for tomorrow. That’s why we at the Institute don’t just research and write about disruption for the benefit of market entrants aiming to tackle America’s systemic care quality, cost and access problem. We do so with the hope of enabling incumbents who want to be part of the solution, too–by helping them spot emerging Disruptions, understand how the disruptions are likely to affect the status quo, and determine how incumbents might align with the phenomenon in a financially sustainable way.

As for Darwin, whom Stockert cites as inspiration for an evolutionary rather than disruptive approach to healthcare transformation, it’s possible he might not have drawn such a sharp distinction between the two. In his Pulitzer Prize-winning book The Beak of the Finch, describing a landmark evolution study by Princeton evolutionary biologists, Jonathan Weiner writes that Darwin “…concluded that small invasions can have far-reaching consequences. The invader itself evolves rapidly as it adapts to its new home; meanwhile everything already living there either adapts to the invader or becomes extinct. The result is an expanding pulse of evolution and extinction, a general acceleration of the pace of change.”

I believe disruption is going to have a dramatic and positive influence in healthcare. In that case, faced with a choice between adapting to the disruptors and ‘extinction,’ resistant incumbents may want to rethink their historic stance.

Photo: undefined undefined, Getty Images

Rebecca Fogg is a senior research fellow at the Clayton Christensen Institute, where she studies business model innovation in healthcare delivery, including new approaches to population health management and person-centered care.

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