Friday, November 07, 2008

Disrupting Healthcare

Interesting read from Forbes:
The general hospital is not viable, and most would collapse tomorrow in the absence of subsidies, restraints on competition and philanthropic life support. Trying to diagnose and treat any disorder that anyone might bring through their doors has forced them to separate their individual specialist physicians and their pieces of equipment (i.e., radiology and surgery suites). This is good for shuffling patients from one department to the next in a flexible way, but it means that hospitals lack the tight integration that allows them to address adequately the different needs of individual patients. This complexity drives up their overhead and has in many cases led to inconsistent quality and safety. This is why many patients now opt to get their knees, spines and cancer treated in specialty hospitals designed around a narrower set of procedures. Hospitals need to disrupt themselves, or be disrupted by others, to reduce cost and improve quality.
Interesting perspective that's worth the read.



Anonymous said...

Hey Wes,

Interesting post! It seems that clinical integration is becoming the new mantra which in some ways makes sense as a way to cut costs and to experiment with inovative methods of health care delivery that will trim costs. The problem with innovation in models of health care delivery is how do you get paid by insurance for offering alternative and inovative methods of care? You need to show the MCOs that what you are doing adds value, but they may not reimburse you for your great idea until you prove it to them. So how can you inovate if you can't financially support a trial of your new idea? The insurance companies are the ones that largely stand in the way of preventing health care inovation that would seemingly make health care more cost effective. And is that any wonder when goevermental agencies regulate insurance companies on the basis of how much of the premium they collect goes back to providing care? Which would you like as your profit; 20% of 100 million or 20% of 1 billion?

I find interesting though, that they tout full integration, but when it comes to more mundane priamry care health issues, they want patients to go to the Minute Clinic for their care. Why not suggest primary care offices be populated with these nurse practitioners and that that care be part of the bigger health care organization where resources will be more availible to that nurse practitioner in the form of higher level providers to access when they have something they can't handle? Instead they wish to send these patients to the Walgreens where they can pick up a six pack of beer and a pack of cigarettes at the same time. Maybe we primary care docs should just start setting up snack machines and get a liquor license under this wonderfully inovative clinic model.

DrWes said...


When it comes to innovation, it's all about the money, and as patients are burdened with an increasing portion of their health care costs, new innovations will serve to disrupt the insurers, too. Case in point: look at the radiology benefits managers hell-bent on denying expensive scans. There is an opportunity now to develop a low-cost alternative that undercuts the currently negotiated price offered by hospitals. Lower-resolution, cheaper scans might suffice in certain situations.

But although this might sound reasonable on first pass, there are also significant regulatory bodies (can you say the FDA??) that prohibit disruptive innovation. One cannot ignore the huge safety and quality bureaucracy that thwarts even the most well-meaning to innovate.

That being said, as price pressures continue in the health care arena, innovation will regain the upper hand as policy makers become desperate for low-cost alternatives to the status quo.