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Decentralizing Healthcare

Just this past month, Clayton Christensen, famous author on The Innovators Dilemma, spoke at a one day event hosted by Mckesson. During the program, he spoke broadly about his theory of"disruption" highlighting both sustaining innovations and disruptive innovations, and at this point his focus turned to healthcare.

Disruptive innovation, he argues, happens when new technologies are able to reach new consumers. It is this influx of new consumers that is disruptive to the market, particularly in pricing (driving it down). Since healthcare already permeates all consumers, how will this market see disruption in the coming years? Decentralization.

The current model of healthcare innovation exists largely within the system. By taking current technologies and creating better hospital based outcomes and treatments, the companies of today are providing sustaining innovations. In the end though, it will be the players in the ecosystem that take technologies, that may even be inferior to today's technologies, and move them out from center, into our clinics, stores, and homes. Christensen calls this "commoditizing experience".

Today, we as physicians are traine to practice "evidence-based medicine" coupled with "precision/personalized medicine". What these two terms mean is that the days of trial and error type of medicine are quickly fading in to personalized algorithmic care based on validated experience. This standardized experience can them be commoditized and refined with decentralization.

Christensen also argues that much of the hospital's costs (he quotes 80-90%, I think ti might be slightly smaller) are devoted to overhead. Due to the complexity of care provided at a large hospital, its depth does not match its breadth, providing a "one size fits none" phenomenon. It is in this respect that decentralization can start to not only begin to solve cost issues within the healthcare ecosystem but also begin to tackle outcomes and value. Home and wearable sensors, "intelligent" and sophisticated population management, telemedicine, and many many more innovations are all next generation technologies that will begin this trend towards decentralization, and I hope to highlight many of those companies and people here.

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