Thursday, April 1, 2010

Unexpected Disruptive Innovations That Lower Costs

Disruption enables less-skilled people to do more sophisticated things. Disruptive innovation enables a large population of less-skilled population to do things in a more convenient, lower-cost setting, which historically could only be done by specialists in a less convenient setting.

Clayton Christensen, Harvard Business School, Disruptive Innovation in Health Care, January, 2008

In this blog, I shall make this point – disruptive innovations often come in unexpected forms from unexpected sources outside of mainstream medicine and outside of government. Centralized planning with controlling management schemes has a place, but so do unpredicted innovations emanating from the bottom-up from independent thinkers and tinkerers.

These innovations may be social, preventive, or communicative. They usually originate locally rather nationally. And they often spring from non-physicians.

However one looks at health care, the present system, with or without Obamacare, has a cost curve that may bankrupt the nation (Michael Chernow, PhD et al, “The Specter of Financial Armageddon – Health Care and Federal Debt in the United States,” NEJM, April 1, 2010).

Recently passed health bill’s 10 year strategies to reduce costs may slow cost rises, but not in short-run (David Cutler, PhD. “Health Reform Passes the Cost Test,” Wall Street Journal, May 9, 2010),

These proposed strategies include.

Establish insurance exchanges – These will take time to set up in all the states, and many states resist their costs and question their constitutionality.

•Reduce excessive Medicare payments - This is administratively and politically difficult. Besides, senior citizens don’t like tampering with “My Medicare.”

Shift from a volume-based to a value-based system in Medicare - This may entail doing away with fee-for-service and bundling of hospital and doctor services – a tough sell to the provider community.

Tax-generous insurance plans - This may mean, among other things, allowing for tax-deductibility of self-employed individuals. It might break the reform pledge to save money.

Empower an independent Medicare advisory board - This may not be a good idea because unaccountable, unelected members might dominate the board.

• Address and reduce fraud and abuse within the Medicare program
– This has no record of past success.

• Enact malpractice reforms
- This is unlikely considering the Trial Lawyer lobby contributes heavily to the Democrat party. Token Medicare demonstration projects will not be sufficient to do the job.

Invest in information technology and comparative-effective research - HIT might work if properly tweaked, but comparative-effectiveness research is rationing by another name. Americans don’t like the “R’ word.

• Invest in prevention
– This sounds good. An ounce of prevention, after all, is worth a pound of cure. It might work if corporations, health plans, and government bite the bullet to pay for it, manage it, and measure it. Unfortunately, old behavioral and cultural habits die hard.

Enough on National Strategies to Lower Costs

Enough said on national efforts, now for a few examples of local and regional disruptive innovations.

Project Health - In 1996, Rebecca Onie, now a J.D, but then a Harvard student, founded Project Health with Barry Zuckerman, MD, a pediatrician at the Boston Medical Center. The idea was simple, as many disruptive innovations are – recruit enthusiastic college students to direct families of pediatric patients to community sources of health care services, employment, housing, food stamps, and transportation. In other words, create a domestic Peace Corps to help poor families and to plug the gap between poverty and poor health. Project Health sets up a Family Help Desk in pediatric health care settings, and student volunteers steer families to where they can get help. Idealistic students, many pre-med, flock to these positions, which take 20 hours or so a week of their time. Project Health has spread to other major cities – Chicago, Providence, Baltimore, New York City, and Washington, D.C – and it is will soon expand to two other cities. Project Health is a superb example of Social Disruptive Innovation.

• Shape Medical Systems, Inc
- Shape Medical System gained FDA approval in 2009. It allows physicians to quantify shortness of breath while tracking and measuring patient progress and response to therapy. Its measures patient function, correlates with other markers of heart failure, and predicts patient mortality and hospitalization risks. The test takes 15 minutes. Unlike the traditional heart stress test, it has no risk and conducted by a non-cardiologist because it involves exercising on a low-grade treadmill at a very low intensity of one mile per hour with the treadmill set at a 2% grade. It simultaneously measures respiratory and cardiac function. The device includes five components : a data analyzer, disposable patient interface or mask, a pulse oximeter, and a computer and a printer. The idea is three fold. One, use a no risk smaller device to supplement or replace cumbersome traditional high risk stress test equipment. Two, have less sophisticated persons working in various settings conduct the test. Three, accurately predict risks of patient mortality and hospitalization and response to therapy. This is an example of Preventive Disruptive Innovation.

Nuance Healthcare, Inc- This Massachusetts-based company has developed improved speech recognition software. It allows physicians to talk their progress notes, clinical findings, and clinical updates into an electronic health record without typing, clicking, or handwriting. Physicians speak their patients’ stories directly into an electronic health record. This electronic tweak makes existing EHRs more clinically useful and efficient. This is an example of a Communicative Disruptive .Innovation.


To sum up, to cut health costs and improve efficiencies, have college student volunteers help connect poor families with sick children to resources in their community, use low-risk physiological measurements to predict who will get a heart attack or be hospitalized, and let doctors speak to their computers.

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