Monday, August 12, 2013


Disruptive Innovation, Publishing, and Health Care

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 Review , “Disruptive Innovation in Health Care”, January 2008

Today as I was reading the drastically slimmed-down, thin Sunday  New York Times,  I was thinking how  far down fortunes of the  print media have sunk.   Within the last two weeks,  the Washington Post, the Boston Globe, and Newsweek were sold at bargain basement prices. 

Creative destruction of established authorative national opinion-making instititions is at work.  People who thought they ran the country, or at least set its political tone and  agendas, suddenly find they are not.  The elite are in retreat.   Consumers are on the rise.  People are turning en masse to products based on disruptive technologies that are cheaper, simpler, smaller, more convenient, and easier to  use.  When it comes to survival, elite instiutions are discovering that in the end it's money and profits and what people are willing to buy and to read that counts.

Because of failure to adjust to demands of the Internet age,  these publications have experienced circulation and  revenue declines. They can no longer support their  cost structures,  and their business deaths have beca\ome inevitable.   The main disruptive culprit is the Internet.    Traditional  publishing empires – whether in newspapers, magazines,  or books, - simply can no longer compete on price or convenience or ease of use.  There are simply too many alternative sources of information,

As Robert Samuelson notes in yesterday 's Washington Post,  “We are overwhelmed by technological change we cannot control.” Open access to the Internet seems uncontrollable.  Hackers are on the loose. Wikileaks is leaking.  Edeard Snowden and  Bredley Manning have released   “secret” U.S. documents for the world to see.  The Chinese are spying  on  our industrial and military affairs.  Online personal identities are up for grabs.  ATM machines are bugged to rob you of your bank account monies.   Nothing is sancroscant to identify thieves,  including your emails and your phone conversations.  People fear government is invading their personal turf.
How do you protect  your privacy in such an environment?   How do  you survive as a business ?  How do you  adjust to this brave new technological world.

How does the fate of the print media apply to health care?  
It comes down to scale and costs.    The Internet allows entrepreneurs to appeal  and to reach  large populations  in a flash at a fraction of costs of traditional businesses.   And it can do without erecting expensive physical  store fronts,  without physical contact with buyers,   with distribution centers or warehouses with vast inventories of goods and services.    Goods and services can be purchased and delivered  conveniently from any home computer  or smartphone or mobile device.

The question for remaining traditional print media and for health care becomes: How can you  you become or remain profitable in a digital age?  How do you reinvent your business to serve customers or patients over the Internet?   Some health systems,  like Geisinger, have responded with multiple service points over a large geographic region.    Others like Kaiser are using EHRs at the point of care to leverage the latest information.  Others are going big in telemedicine to reach customers in remote areas and charging for access to specialists.   Still others are forming coordinated teams dominated and led by primary care physicians, physician assistants, and nurse practitioners.  Some are going heavily into the social media – Twitter and Facebook – to reach wider audiences.    And many are decentralizing operation into more conveniently accessible  freestanding ERs, diagnostic, and surgical centers using the Internet as its marketing and communication connective tissue.   The Mayo Clinic is building information and specialist sharing partnerships with other health systems.

Digital survival and thrival is  about creating  a wider scale of services in organizations with lower cost structures and more convenient access with more patient engagement and participation.  It’s about hardware, software, and services in more convenient packages with more transparent costs.  It’s about re-adjusting to the digital age  before you lose your shirt and have to sell out at a rock bottom price to a larger organization.     

At the other end of the care spectrum,   it may be shedding relationships with  third parties to dramatically lower your cost structure.  It’s about picking the future – digital supported, mediated, and delviered  care- over the past ;  focusing on opportunities offered in the Internet era;    choosing new ways of doing things at lesser cost and  in more convenient settings; and aiming high for something that makes a difference to payers and patients.

Tweet:   Digital technologies have disruted the print world and may do so in health care until we provide better, cheaper, more convenient care.

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