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Innovation in Health Care Is Not Like Other Business

Posted Sep 07 2008 8:10pm
In my last post, I told about the Value Code, a book that was published at the worst possible time for its ideas to gain any traction. The majority of the companies the book highlights no longer exist, have been taken over or abandoned the activity for which they were being mentioned.

So much for new ideas.

But on closer reading, the point must be accepted; that value is created as much by the arrangement of resources as anything else. The road to success is a via well though-out plan for execution in the context of a good understanding of the strategic landscape followed by a whole lot of luck…

The trouble with many people’s notions of how to bring business innovation to health care is that they are saddled with assumptions that apply to other aspects of the business world, but do not necessarily apply to health care.

For example, competition in health care frequently leads to increased consumption. Price transparency has the potential to paradoxically lead to rising prices, rather than price competition. (“Have we got a sale on brain surgery this week!”) The fact that a third party pays for the services completely distorts consumer behavior. And yet, health care is an under-estimated contributor to overall economic output.

Before trying to introduce innovation in health care, one must first acknowledge the structural reasons that argue against changing anything. Why adopt EMR? It doesn’t add value to the health of the patient in front of you. Frankly, it only adds work with the hope that someday in the future the collective information derived from such systems may improve something or other.

The real innovations in health care are related to the development of new technologies. Tagamet was a pill that nearly cleared surgical waiting lists (anyone remember how many vagotomies and pyloroplasties filled OR lists in the early 80’s?) Then laparoscopic surgery nearly destroyed the financial viability of half the hospitals in this country by reducing length of stay for surgery that would previously need four or five days in-house. Radiography got killed by CT which is displaced by MRI which will succumb to something else. Chemo has come so far that cancer survival rates have been upticking for the past three or four years. Certainly I have missed an awful lot of revolutionary medical innovations of the past two or three decades, but these are some which come to mind.

EMR will never be on this list.

Shared decision-making is not here.

Evidence-based medicine is of tremendous value but is certainly not a revolution.

Group medical visits for chronic disease will not bring down the walls, nor will disease management, case coordination, Health 2.0, concierge medicine, new insurance paradigms or new models for primary care training.

These items, which have engrossed my attention and dominated my interest for most of my career are not revolutionary technologies that will disrupt everything we now know about health care.

A bitter pill, perhaps, but innovations still make their way into health care delivery… the question is how?
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