Disruptive Innovation vs Incremental Improvement

Blog post by Colin Hung

This week I am hosting both the #hcldr and #HITsm weekly tweetchats. A couple of years ago, #hcldr and #HITsm held joint chats on a specific topic – one that was applicable to both communities. I thought it would be fun to do it again.

Over the past few months I have had many conversations about disruptive innovation and incremental change in healthcare. It started with a #HIMSS17 discussion I had with John Lynn. We were in the exhibit hall and I had made the comment that many vendors were staking claim to the “disruptive innovation” yet all I saw were incremental improvements to existing healthcare technologies/processes. I complained to John that my search for true innovation at #HIMSS17 was likely to be unsuccessful. Instead of commiserating with me, John challenged me with his response:

Do we really need disruptive innovation in healthcare? Are incremental changes a bad thing? There are so many things in #HealthIT that can be improved, why shouldn’t we focus on that for while – fixing all the things that aren’t working so well for patients and providers.

That question stuck with me and over the past several months as I have traveled to various meetings and conferences I have found myself steering my conversations to this topic. Many of those I spoke to believe there are disruptive healthcare innovations happening all around us. They pointed to the following examples:

  • Artificial Intelligence (AI)
  • Machine Learning
  • 3D Imaging
  • Virtual Reality
  • Natural Language Processing (NLP) for EHRs
  • Retail Clinics
  • Price transparency
  • Value based care

Clayton Christensen, the Harvard professor who coined the term disruptive innovation back in the 90s, inadvertently gave marketers a label to use for any product or service that was different from an incumbent. Over the years, marketers and mainstream media co-opted the term drove it so deep into our collective psyches that every industry now hungers for disruptive innovation. Nothing less will satisfy.

Take for example, this recent NEJM Catalyst survey that asked participants where disruptive innovation in healthcare was needed most:

Although the results of this survey are truly interesting, I found myself staring at the title. I believe if you replace the words “disruptive innovation” with “improvement” the chart would be equally valid. In fact if you changed the title to “Health Care Sectors where status quo is intolerable” you would probably get the same results.

I wonder if we are becoming too obsessed trying to find the next disruptive innovation to solve our problems in healthcare rather than just focusing on rapid incremental improvements. I see nothing wrong with striving for incremental improvements. We are all operating in a healthcare environment where the need for change is high but where resources/funding are constrained. In this environment I believe that incremental improvements would have greater benefit vs waiting for moon-shot disruptive innovations to happen. The good news is that I think we are already doing this in healthcare, we’re just using the wrong label.

In my opinion, all of the items on my informal list above are impressive innovations, but none are truly disruptive. None of the above will suddenly open up the healthcare market or fundamentally change the way healthcare is delivered to patients. Don’t get me wrong, I am a big fan of #AI as well as NLP. I am excited about both technologies and how they are going to make healthcare better for everyone. However, I see them both as incremental improvements (okay maybe as big incremental improvements) rather than disrupting healthcare.

In an #hcldr post earlier this year, Joe Babaian pointed to a quote from Christensen. The quote comes from a 2015 HBR article where Christensen warns about overusing the disruptive label:

In our experience, too many people who speak of “disruption” have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use “disruptive innovation” to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.

If we get sloppy with our labels or fail to integrate insights from subsequent research and experience into the original theory, then managers may end up using the wrong tools for their context, reducing their chances of success. Over time, the theory’s usefulness will be undermined.

In the article Christensen goes on to challenge the common belief that Uber has disrupted the taxi industry. A key element of a disruptive innovation is that it causes non-consumers to suddenly become consumers. This is usually because the innovation significantly lowers cost, eliminates a barrier to consumption or creates entirely new markets. According to Christensen Uber is not disruptive because it did not create a new market for transportation services nor did it originate in a low-end market. It went after traditional taxi customers with a better offering. In other words, Uber is an incremental improvement.

Towards the end of the article Christensen answers the obvious question:

Readers may still be wondering, Why does it matter what words we use to describe Uber? The company has certainly thrown the taxi industry into disarray: Isn’t that “disruptive” enough? No. Applying the theory correctly is essential to realizing its benefits. For example, small competitors that nibble away at the periphery of your business very likely should be ignored—unless they are on a disruptive trajectory, in which case they are a potentially mortal threat. And both of these challenges are fundamentally different from efforts by competitors to woo your bread-and-butter customers.

It is through this lens that I see almost all recent healthcare innovations as incremental improvements rather than as truly disruptive. And is that really a bad thing? I don’t believe it is. In fact, I would love to see healthcare embrace incremental improvements (large and small) rather than chase after elusive disruptive change. Imagine the gains we would make if physicians had EHRs with better user-interfaces or could just speak to their EHR like we do with Alexa or Siri. Think of how many patients would benefit from price transparency and an easy way to understand/pay medical bills in installments. Who wouldn’t want their surgeon to virtually see the organ they were about to operate on? I for one, can’t wait for these types of incremental improvements.

So what is a potential disruptive innovation in healthcare? To me, the combination of the Tri-corder project, AI and personalized medicine could disrupt healthcare. Imagine one day being able to scan yourself with a device in your home (or maybe local pharmacy) and have it tell you what’s wrong and prescribe a treatment that is specific to your physiology that includes food/rest/exercise in addition to medication. In this utopia healthcare suddenly becomes available to whole hosts of people who are non-consumers today – namely those that cannot afford healthcare or are in places where healthcare professionals are not prevalent. We would no longer need to invest as much in healthcare facilities and block-buster drugs. That would truly disrupt healthcare in my opinion.

One thing that we cannot overlook, is that coming up with innovative technology is not sufficient. To be truly disruptive, a technology needs to be successfully implemented and adopted. The jet engine, for example, would not have been a successful disruptive innovation if: airplane manufacturers did not retool their facilities, airlines didn’t train maintenance staff and airports lengthen runways to allow jets to land. Creating the jet engine wasn’t enough – the whole industry had to be convinced to adopt it. Thankfully market forces and consumer demand helped to make it happen.

In early 2016, an expert healthcare panel convened by the European Commission for Health & Food Safety came up with findings and recommendations that are needed to successfully implement disruptive innovations into a healthcare system. Three statements stood out to me:

  1. Some of the most important barriers to keep in mind are: lack of engagement of patients/people; resistance of the health workforce and organisational/institutional structures; inadequate networks and processes; economic and legal factors; lack of political support, lack of coordinated actions across agents, and lack of knowledge and evaluations.
  2. It is important to involve all the relevant actors in the creation and diffusion of (disruptive) innovations, in order to diminish the impact of vested interests that represent a barrier.
  3. The implementation of a disruptive innovation requires the creation of new organisational models and management plans, the presence of favourable framework conditions, and the development of new models of commissioning and financing.

Christensen has repeatedly said that not all disruptive innovations are successful. Looking at the above statements, it’s not hard to see why. In healthcare if patients or physicians do not buy into a new technology or process, it will not be widely adopted. If incentives are not aligned either by government action or by consumer-driven market forces, then the innovation will not be sustained. Finally, if we continue to operate in protective silos (payers, employers, healthcare institution, clinicians, nurses, administrators) innovations will be seen only as threats and be resisted rather than welcomed.

There are so many ways current healthcare system that can be improved that I do not believe we need to be searching for the next disruptive innovation. Rapid incremental improvements will make the lives of clinicians and patients better. It’s worth our time and effort to focus more on this in the short term. Thankfully I believe this is the case – most of the technologies and efforts currently being put forth fall more into the category of incremental improvements rather than truly disruptive innovations.

In my book there’s nothing wrong with incremental improvements.

I take heart from what’s happened to the aviation industry. I would argue that the last disruptive innovation was the commercial jet engine which came into service in the 1950s. Ever since then we have seen nothing but a string of rapid incremental improvements. Bigger airplanes, pressurized cabins, leaps in fuel efficiency, airport redesigns and even on-board WiFi are all improvements over the past 60 years. Air travel has never been safer or more affordable than it is today. If you are a traveler would you have been happy with propeller aircraft for the past 60 years while waiting for self-driving cars or Hyperloop?

Join us on the next #hcldr chat, Tuesday April 18th at 8:30pm Eastern (GMT -5, for your local time click here) when we will be discussing disruptive innovation vs incremental improvements in healthcare:

  • T1 Disruptive Innovation or incremental improvements – which does healthcare need more of?
  • T2 Are disruptive innovation & incremental improvements mutually exclusive in healthcare? How might we have both?
  • T3 What aspect of healthcare do you believe is in most desperate need of innovation and improvement?
  • T4 What can healthcare leaders do to create an environment where innovation AND improvements are welcomed & encouraged?

Please also join me as I host the weekly #HITsm tweetchat on Friday April 21st at 12:00pm ET where we will continue the disruptive innovation and incremental improvement discussion.

References

“What is Disruptive Innovation”, Clayton Christensen et al, Harvard Business Review, December 2015, https://hbr.org/2015/12/what-is-disruptive-innovation, accessed 15 April 2017

“New Marketplace Survey: The Sources of Health Care Innovation”, Leemore Dafny & Namsita Mohta MD, NEJM Catalyst, 16 February 2017, http://catalyst.nejm.org/survey-sources-disruptive-innovation-in-healthcare/, accessed 15 April 2017

“Expert Panel on Effective Ways of Investing in Health – Disruptive Innovation”, European Commission DG Health & Food Safety, 29 February 2016, http://ec.europa.eu/health/expert_panel/sites/expertpanel/files/012_disruptive_innovation_en.pdf, accessed 15 April 2017

“Disruptive Innovation in Healthcare”, Joe Babaian, HCLDR, 10 January 2017, https://hcldr.wordpress.com/2017/01/10/disruptive-innovation-in-healthcare/, accessed 16 April 2017

“Searching for Disruptive Healthcare Innovation”, Colin Hung, Hospital EMR and EHR, 17 January 2017, http://www.hospitalemrandehr.com/2017/01/17/searching-for-disruptive-healthcare-innovation-in-2017/, accessed 15 April 2017

“Disruptive Innovation in Healthcare: What to Expect in 2016”, Megan Williams, Samsung.com, 5 April 2016, https://insights.samsung.com/2016/04/05/disruptive-innovation-in-healthcare-what-to-expect-in-2016/, accessed 15 April 2017

“6 Disruptive Trends in Technology for 2017”, Murray Newlands, Forbes, 31 August 2016, https://www.forbes.com/sites/mnewlands/2016/08/31/6-disruptive-trends-in-technology-for-2017/#10f0fea028ec, accessed 15 April 2017

“5 Most Disruptive Health IT Innovations”, Michelle McNickle, Healthcare IT News, 4 October 2011, http://www.healthcareitnews.com/news/5-most-disruptive-health-it-innovations, accessed 15 April 2017

“Primary Healthcare – It’s Time for Disruptive Innovation!”, David J Price, Longwoods, Obtober 2016, http://www.longwoods.com/content/24824, accessed 15 April 2017

“Disruptive Innovation in Healthcare: Examples From 3 Top Health Systems”, Sabrina Rodak, Becker’s Hospital Review, 11 January 2013, http://www.beckershospitalreview.com/strategic-planning/disruptive-innovation-in-healthcare-examples-from-3-top-health-systems.html, accessed 15 April 2017

“Revisiting how Christensen’s ‘disruption innovation’ in healthcare means decentralization”, Jonah Comstock, Mobi Health News, 26 March 2014, http://www.mobihealthnews.com/31470/revisiting-how-christensens-disruption-innovation-in-healthcare-means-decentralization, accessed 15 April 2017

“Why disruptive innovation is still healthcare’s silver bullet”, Michael Devonas, Christensen Institute, 20 November 2015, https://www.christenseninstitute.org/blog/why-healthcare-needs-disruption/, accessed 15 April 2017

“What is Disruptive Health Technology?”, Carnegie Mellon University, http://www.dhti.cmu.edu/dhti/definition.asp, accessed 15 April 2017

“Harnessing Disruptive Innovation in Health Care”, Paul E Plsek et al, AHRQ, 23 April 2014, https://innovations.ahrq.gov/perspectives/harnessing-disruptive-innovation-health-care, accessed 15 April 2017

“Disruptive Innovation: A Prescription For Better Health Care”, John Converse Townsend, Forbes, 23 April 2013, https://www.forbes.com/sites/ashoka/2013/04/23/disruptive-innovation-a-prescription-for-better-health-care/#4398ad3630ec, accessed 15 April 2017

“What disruptive innovation means”, AW, The Economist, 25 January 2015, http://www.economist.com/blogs/economist-explains/2015/01/economist-explains-15, accessed 15 April 2017

“There are Three Types of Innovation. Here’s How To Manage Them”, Jump Associates, Fast Co Design, 11 October 2011,  https://www.fastcodesign.com/1665186/there-are-three-types-of-innovation-heres-how-to-manage-them, accessed 16 April 2017

“Disruptive vs Incremental #Innovation: What the Experts Say”, Anthony J James, LinkedIn, 31 May 2016, https://www.linkedin.com/pulse/disruptive-vs-incremental-innovation-what-experts-say, accessed 16 April 2017

Image Credit

Light bulb – Jeff Kubina https://upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Light_Bulb.jpg/1024px-Light_Bulb.jpg

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