“Golly, Curmudge, I can hardly wait until we get to the end of Christensen’s The Innovator’s Prescription. It’s like a novel; I’m eager to learn what health care will be like in the future.”
“It’s not a sure thing, Jaded Julie. The future will depend on which of the following two philosophies of health care will be dominant. (1) Improving the value of health care can’t happen unless those who receive health services know what they cost and bear at least a share of the cost burden. (2) Some people believe with near-religious fervor that employers or the government are morally obligated to cover health-care costs. In that scenario, reimbursements are administered prices; they are insulated from market forces and the efficiencies that would result from disruptive innovation.”
“Whether it’s through taxation or cash on the barrelhead, health care has to be paid for. It sounds as if Christensen’s ideas will function better under Scenario 1. How will that work?”
“As mentioned last week, the integrated fixed-fee providers will charge patients an annual fee (capitation). Employers who directly manage their employees’ health care use a combination of high-deductible insurance (to protect against catastrophic illness) and health savings accounts (HSAs). The employer puts before-tax money in the employee’s HSA; the employee can also add (before tax) to the account. The employee pays for health care out of the HSA up to where the high-deductible insurance kicks in. Upon retirement, the employee can keep any funds left in the HSA.”
“Hey, this sounds like my 401(k). I can see where it is to the employee’s advantage to frugally manage his health-care costs and to everyone’s advantage for him to stay healthy. But what about the ‘uninsured poor?’ “
“They could use HSAs too; but instead of employers (which they may not have), governments could match by formula the HSA contributions made by the low-income citizens. Governments would also need to subsidize their high-deductible insurance.”
“Curmudge, under any system—including the present one—someone is doing well financially. It’s human nature for them to want to protect their rice bowl. What kinds of resistance is disruptive innovation likely to encounter, and how might it be overcome or circumvented?”
“Virtually every innovation we have discussed in the past few weeks will be opposed by some group or organization that wants to protect the status quo. Their most common vehicles are regulations covering certification and licensure that control who gets paid. Usually the regulations were established to protect the public; but when they become outdated due to technology, they will end up protecting the economic interests of the providers. This means that head-on attempts to bring about change in the health care system are likely to fail.”
“So are we stuck in our present system? Was everything in Christensen’s book just an intellectual exercise?”
“The feasibility of the improvements has been demonstrated by the examples in the book. Organizations like the integrated fixed-fee providers and the employers who directly manage their employees’ health care are not directly bucking the present system. They are going around it by setting up systems of their own. Their success will bring about success elsewhere as others adopt their innovations. Changes that seem impossible at present will become feasible.”
“In his book Christensen suggests that regulations will ultimately change in reaction to the innovators’ successes. ‘The focus of regulations such as licensure and certification needs to keep pace with technological change.’ ‘As care moves through empirical medicine toward precision medicine, the focus should shift to accrediting processes, and ultimately to guaranteeing outcomes.’ “
“Julie, in countries like Great Britain where the government ‘owns’ the health care system, there is no place outside the system where innovators can bring about changes. Their needed modifications will require a head-on approach, which will be extremely difficult.”
“Okay, Curmudge, is there a simple solution to all of this?”
“As I said once before, for every complex problem there is a solution that is quick, simple, and wrong. In the U.S., that sort of ‘solution’ would be to handcuff our health care system in a way that makes disruptive innovation impossible.”
Affinity’s Kaizen Curmudgeon
Monday, June 13, 2011
Friday, June 3, 2011
The Crystal Ball 7
“As promised, Jaded Julie, today we are going to share the highlights of Clayton Christensen’s observations regarding chronic diseases. The spectrum of chronic diseases is extremely wide, ranging from myopia (nearsightedness), which I have had since age 13, to Alzheimer’s, which one of my friends will likely die from before this blog is posted.”
“I understand that Christensen divides chronic diseases into two major categories: (1) Intuitive chronic diseases. Their lack of clarity in diagnosis and treatment necessitates the type of medicine practiced in a multidisciplinary solution shop. (2) Rules-based chronic diseases. A single practitioner can diagnose and prescribe evidence-based or rules-based therapy.”
“Let’s look at the first category, Julie. Dyspnea (difficulty breathing) is a symptom common to several pulmonary diseases that could involve interdependent molecular pathways, genetic differences, and environmental factors. A definitive diagnosis might require extensive tests interpreted by a team of experts who can knit together their extensive experience. Their judgment would guide the decision between rigorous but unpleasant therapy and palliative care. For pulmonary medicine, highly regarded solution shops include Mayo and National Jewish Medical Center.”
“Let’s be a bit more up-beat, Curmudge, and talk about the second category, the rules-based chronic diseases. With these diseases, diagnoses and treatments are usually straightforward, but a common problem is getting the patient to comply with the prescribed therapy. For some, the effects of noncompliance are evident and unpleasant. Celiac disease is an example; if the patient doesn’t avoid eating foods containing gluten, he/she most often will have gastrointestinal problems. At the other extreme is obesity, where the results of noncompliance are more subtle and usually delayed.”
“There is also a reimbursement issue for the provider. He/she will be reimbursed for diagnosing and prescribing but not for calling the patient to remind her to take her medicine, watch what she eats, and come in for her periodic check-up. More generally, there is no procedure code for keeping the patient well. According to Christensen, ‘the fault is the misapplication to chronic diseases of a business model that was developed for the practice of acute medicine long ago.’”
“It seems to me that Christensen has laid the groundwork for eventually solving some of the problems that are plaguing health care. In short, how are we (not you Curmudge; this may take longer than your expected lifetime) going to pull this off?”
“Christensen has described the so-called ‘integrated fixed-fee provider.’ ‘They don’t need to orchestrate a disruptive value network; they can create it.’ Obviously, this must be a very large organization like Permanente in California and Intermountain Healthcare in Utah. Most of the essential elements of health care that we have discussed—the disruptors and the disruptees—are under the corporate umbrella. Care is provided in the most cost effective venue. The annual fee paid by each patient provides an incentive for the organization to maintain their wellness—not to just treat their illnesses.”
“Don’t forget, Curmudge, Christensen’s criteria of an ideal entity for managing a health care system: (1) have a long-term perspective, (2) make money by keeping us well, not beginning when we become sick, (3) care about us personally, (4) be geographically nearby and convenient, and (5) be able to make needed changes decisively. Hey, that sounds like something an employer could do.”
“And some do, Julie. Christensen’s example is Quad/Graphics.”
“Of course. They’re next to highway 41 just south of Fond du Lac.”
“They operate four medical centers—free to employees and their families—offering family practice, internal medicine, pediatrics, OB/GYN, minor surgery, lab work, rehabilitation , and physical exams. Quad is self-insured and contracts with local hospitals and specialists for advanced care. Their emphasis is on wellness, and they have programs to combat chronic illnesses. Their physicians and nurse practitioners are salaried employees.”
“I read about another company in Wisconsin, Serigraph, that ‘took the problem of employee health insurance costs into its own hands.’ Their CEO even wrote a book about it, The Company That Solved Health Care (1). For your continued study, Curmudge, there’s a pretty good review of the book in Amazon. The important teaching is that these companies have found ways to make the ‘employers as integrators’ concept work.”
“A more general conclusion is Christensen’s five- to ten-year forecast regarding integrated fixed-fee (IFF) providers. ‘Where they use disruptive business models to provide better care at lower cost, they will prosper; and overall health-care costs will drop without a compromise in quality or convenience. This is because quality comes from correct integration, and lower costs come from low overheads that are enabled by focus.’ ”
“I think his examples are easier to understand than his summary. By the way, is there more to this story?”
“Actually, Julie, there is. And we should be able to wrap it up next time.”
Affinity’s Kaizen Curmudgeon
(1) Torinus, John. The Company That Solved Health Care.
“I understand that Christensen divides chronic diseases into two major categories: (1) Intuitive chronic diseases. Their lack of clarity in diagnosis and treatment necessitates the type of medicine practiced in a multidisciplinary solution shop. (2) Rules-based chronic diseases. A single practitioner can diagnose and prescribe evidence-based or rules-based therapy.”
“Let’s look at the first category, Julie. Dyspnea (difficulty breathing) is a symptom common to several pulmonary diseases that could involve interdependent molecular pathways, genetic differences, and environmental factors. A definitive diagnosis might require extensive tests interpreted by a team of experts who can knit together their extensive experience. Their judgment would guide the decision between rigorous but unpleasant therapy and palliative care. For pulmonary medicine, highly regarded solution shops include Mayo and National Jewish Medical Center.”
“Let’s be a bit more up-beat, Curmudge, and talk about the second category, the rules-based chronic diseases. With these diseases, diagnoses and treatments are usually straightforward, but a common problem is getting the patient to comply with the prescribed therapy. For some, the effects of noncompliance are evident and unpleasant. Celiac disease is an example; if the patient doesn’t avoid eating foods containing gluten, he/she most often will have gastrointestinal problems. At the other extreme is obesity, where the results of noncompliance are more subtle and usually delayed.”
“There is also a reimbursement issue for the provider. He/she will be reimbursed for diagnosing and prescribing but not for calling the patient to remind her to take her medicine, watch what she eats, and come in for her periodic check-up. More generally, there is no procedure code for keeping the patient well. According to Christensen, ‘the fault is the misapplication to chronic diseases of a business model that was developed for the practice of acute medicine long ago.’”
“It seems to me that Christensen has laid the groundwork for eventually solving some of the problems that are plaguing health care. In short, how are we (not you Curmudge; this may take longer than your expected lifetime) going to pull this off?”
“Christensen has described the so-called ‘integrated fixed-fee provider.’ ‘They don’t need to orchestrate a disruptive value network; they can create it.’ Obviously, this must be a very large organization like Permanente in California and Intermountain Healthcare in Utah. Most of the essential elements of health care that we have discussed—the disruptors and the disruptees—are under the corporate umbrella. Care is provided in the most cost effective venue. The annual fee paid by each patient provides an incentive for the organization to maintain their wellness—not to just treat their illnesses.”
“Don’t forget, Curmudge, Christensen’s criteria of an ideal entity for managing a health care system: (1) have a long-term perspective, (2) make money by keeping us well, not beginning when we become sick, (3) care about us personally, (4) be geographically nearby and convenient, and (5) be able to make needed changes decisively. Hey, that sounds like something an employer could do.”
“And some do, Julie. Christensen’s example is Quad/Graphics.”
“Of course. They’re next to highway 41 just south of Fond du Lac.”
“They operate four medical centers—free to employees and their families—offering family practice, internal medicine, pediatrics, OB/GYN, minor surgery, lab work, rehabilitation , and physical exams. Quad is self-insured and contracts with local hospitals and specialists for advanced care. Their emphasis is on wellness, and they have programs to combat chronic illnesses. Their physicians and nurse practitioners are salaried employees.”
“I read about another company in Wisconsin, Serigraph, that ‘took the problem of employee health insurance costs into its own hands.’ Their CEO even wrote a book about it, The Company That Solved Health Care (1). For your continued study, Curmudge, there’s a pretty good review of the book in Amazon. The important teaching is that these companies have found ways to make the ‘employers as integrators’ concept work.”
“A more general conclusion is Christensen’s five- to ten-year forecast regarding integrated fixed-fee (IFF) providers. ‘Where they use disruptive business models to provide better care at lower cost, they will prosper; and overall health-care costs will drop without a compromise in quality or convenience. This is because quality comes from correct integration, and lower costs come from low overheads that are enabled by focus.’ ”
“I think his examples are easier to understand than his summary. By the way, is there more to this story?”
“Actually, Julie, there is. And we should be able to wrap it up next time.”
Affinity’s Kaizen Curmudgeon
(1) Torinus, John. The Company That Solved Health Care.
Tuesday, May 31, 2011
The Crystal Ball 6
“You know, Curmudge, if a reader surfed onto this posting without having read those that preceded it, he/she would think, ‘who are those two presumptuous people who write as if they know so much?’ Of course, those who have read our postings all along realize that we are just messengers trying to convey the teachings in Clayton Christensen’s book, The Innovator’s Prescription.”
"Don’t worry, Jaded Julie. Anyone acquainted with us knows that we more closely resemble copy-cats than visionaries. So let’s pick up the story where we left off. Christensen proposed that in the future precise diagnoses and predictably effective therapies will move providers upward on the scale of medical practice. Nurse practitioners will disrupt primary care physicians; primary care physicians will disrupt specialists, etc. Next, Christensen considers how changes of this sort will impact hospitals and other health care institutions.”
“Even in my lifetime, Curmudge, there will remain some afflictions that can’t be diagnosed and treated by precision medicine. Patients with these problems will go to hospitals that specialize in intuitive medicine, which Christensen (inelegantly) calls ‘solution shops.’ The Mayo Clinic is a modern-day solution shop where a team of world-class specialists—paid a salary—will diagnose your illness and then use state-of-the-art therapies to test their hypothesized diagnosis and hopefully effect a cure.”
“Actually, a large part of most of today’s general hospitals is, effectively, a solution shop. Their diagnostic efforts require large laboratories, an array of advanced imaging instruments, and specialists of (almost) every description. Christensen calls the other part of a general hospital’s business their ‘value-adding process (VAP) activities.’ Here they fix problems after definitive diagnoses have been made. Things like hip and knee replacements, CABG and angioplasty heart repairs, and hernia and cataract surgery.”
“I’ve read about dedicated VAP facilities, Curmudge. Everything is standardized and focused on doing a limited number of procedures very efficiently and for a flat fee. Shouldice in Canada does only hernia repair, and there are others that patients travel to in Asia (‘medical tourism’). In Pennsylvania, Geisinger charges insurers a flat rate for heart bypass surgeries and effectively provides a 90-day warranty.”
“Christensen sees general hospitals as attempting to implement two different business models under one roof, i.e., acting as a solution shop as well as a VAP facility. He suggests that the high overhead of the low-volume solution shop part of the hospital is subsidized by the hospital’s high-volume routine surgeries. Typically, a solution shop bills on a fee-for-service basis, while a dedicated VAP facility can charge a flat rate because their outcomes can be forecast.”
“So put it all together, Curmudge, and tell me how disruptive innovation can at some point in the future impact today’s general hospital.”
“A dedicated VAP facility using standardized procedures is likely to be more efficient and effective and less costly than a general hospital. ‘Toyota taught the world that if we do a task differently every time, it’s very hard to improve the result.’ “
“That sounds like an endorsement for standard work in health care.”
“In the future, a general hospital’s solution shop business is apt to get pinched from both sides. Recall, Julie, our discussion of the enhanced diagnostic power that technology and telemedicine will bring to the primary care physician’s office. That will disrupt the solution shop side of the hospital for the more straightforward diagnoses. Finally, the tough diagnoses that remain will be best tackled by a focused solution shop like the Mayo Clinic or the Texas Heart Institute. For his own diagnosis Dr. Grossman, Christensen’s coauthor, went to National Jewish Medical Center in Denver. The cost of traveling to such a place will be trivial compared to ‘thousands of dollars spent on the wrong prescription drugs and devices that were the result of inaccurate, incomplete diagnoses by a stream of individually operating specialists.’ “
“Let’s move on to the next subject. What did Christensen say about chronic diseases? And who will be able to pull off these disruptive changes in health care?”
“That will be next time, Julie. Don’t go away.”
Affinity’s Kaizen Curmudgeon
"Don’t worry, Jaded Julie. Anyone acquainted with us knows that we more closely resemble copy-cats than visionaries. So let’s pick up the story where we left off. Christensen proposed that in the future precise diagnoses and predictably effective therapies will move providers upward on the scale of medical practice. Nurse practitioners will disrupt primary care physicians; primary care physicians will disrupt specialists, etc. Next, Christensen considers how changes of this sort will impact hospitals and other health care institutions.”
“Even in my lifetime, Curmudge, there will remain some afflictions that can’t be diagnosed and treated by precision medicine. Patients with these problems will go to hospitals that specialize in intuitive medicine, which Christensen (inelegantly) calls ‘solution shops.’ The Mayo Clinic is a modern-day solution shop where a team of world-class specialists—paid a salary—will diagnose your illness and then use state-of-the-art therapies to test their hypothesized diagnosis and hopefully effect a cure.”
“Actually, a large part of most of today’s general hospitals is, effectively, a solution shop. Their diagnostic efforts require large laboratories, an array of advanced imaging instruments, and specialists of (almost) every description. Christensen calls the other part of a general hospital’s business their ‘value-adding process (VAP) activities.’ Here they fix problems after definitive diagnoses have been made. Things like hip and knee replacements, CABG and angioplasty heart repairs, and hernia and cataract surgery.”
“I’ve read about dedicated VAP facilities, Curmudge. Everything is standardized and focused on doing a limited number of procedures very efficiently and for a flat fee. Shouldice in Canada does only hernia repair, and there are others that patients travel to in Asia (‘medical tourism’). In Pennsylvania, Geisinger charges insurers a flat rate for heart bypass surgeries and effectively provides a 90-day warranty.”
“Christensen sees general hospitals as attempting to implement two different business models under one roof, i.e., acting as a solution shop as well as a VAP facility. He suggests that the high overhead of the low-volume solution shop part of the hospital is subsidized by the hospital’s high-volume routine surgeries. Typically, a solution shop bills on a fee-for-service basis, while a dedicated VAP facility can charge a flat rate because their outcomes can be forecast.”
“So put it all together, Curmudge, and tell me how disruptive innovation can at some point in the future impact today’s general hospital.”
“A dedicated VAP facility using standardized procedures is likely to be more efficient and effective and less costly than a general hospital. ‘Toyota taught the world that if we do a task differently every time, it’s very hard to improve the result.’ “
“That sounds like an endorsement for standard work in health care.”
“In the future, a general hospital’s solution shop business is apt to get pinched from both sides. Recall, Julie, our discussion of the enhanced diagnostic power that technology and telemedicine will bring to the primary care physician’s office. That will disrupt the solution shop side of the hospital for the more straightforward diagnoses. Finally, the tough diagnoses that remain will be best tackled by a focused solution shop like the Mayo Clinic or the Texas Heart Institute. For his own diagnosis Dr. Grossman, Christensen’s coauthor, went to National Jewish Medical Center in Denver. The cost of traveling to such a place will be trivial compared to ‘thousands of dollars spent on the wrong prescription drugs and devices that were the result of inaccurate, incomplete diagnoses by a stream of individually operating specialists.’ “
“Let’s move on to the next subject. What did Christensen say about chronic diseases? And who will be able to pull off these disruptive changes in health care?”
“That will be next time, Julie. Don’t go away.”
Affinity’s Kaizen Curmudgeon
Friday, May 20, 2011
Happy Fourth Birthday
“Curmudge, did you forget that May 23 will be the fourth birthday of the Kaizen Curmudgeon blog? Here, blow out the candles that I put on this cupcake.”
“Pooof…”
“Hey, you missed one.”
“At my age, three out of four isn’t bad. So by way of celebration, let’s reflect a bit on what we have done and what we are doing. Four years ago you, Jaded Julie, were just a straight man for Curmudgeon.”
“Straight person, Old Guy. A little political correctness, please.”
“Now you are a valued colleague with a growing vocabulary and a tolerance for an occasional profundity in a foreign tongue. You even read the same books that I do, and you waken me when I fall asleep in mid-sentence.”
“I must admit that we occasionally stray from our original subject, Lean in health care. At least we adhere to our plan of sharing the essential lessons of books and papers that our readers are unlikely to have time to read.”
“And sometimes we discuss things we have experienced that just cry out to be shared.”
“You are of course referring to universal concerns like the end-of-life issues in our postings on Way to go! and The Old Men’s Table. It would be unfair to our readers to depict life as always a rose garden. They need to understand that we at Affinity are thinking about serious things.”
“Speaking of serious things, Julie, do you realize that our birthday has popped up right in the middle of our series on the future of health care, which we have termed The Crystal Ball? Let’s cut out of this birthday frivolity and get back to work on health care’s future.”
“I’m right with you, Curmudge.”
Affinity’s Kaizen Curmudgeon
“Pooof…”
“Hey, you missed one.”
“At my age, three out of four isn’t bad. So by way of celebration, let’s reflect a bit on what we have done and what we are doing. Four years ago you, Jaded Julie, were just a straight man for Curmudgeon.”
“Straight person, Old Guy. A little political correctness, please.”
“Now you are a valued colleague with a growing vocabulary and a tolerance for an occasional profundity in a foreign tongue. You even read the same books that I do, and you waken me when I fall asleep in mid-sentence.”
“I must admit that we occasionally stray from our original subject, Lean in health care. At least we adhere to our plan of sharing the essential lessons of books and papers that our readers are unlikely to have time to read.”
“And sometimes we discuss things we have experienced that just cry out to be shared.”
“You are of course referring to universal concerns like the end-of-life issues in our postings on Way to go! and The Old Men’s Table. It would be unfair to our readers to depict life as always a rose garden. They need to understand that we at Affinity are thinking about serious things.”
“Speaking of serious things, Julie, do you realize that our birthday has popped up right in the middle of our series on the future of health care, which we have termed The Crystal Ball? Let’s cut out of this birthday frivolity and get back to work on health care’s future.”
“I’m right with you, Curmudge.”
Affinity’s Kaizen Curmudgeon
Thursday, May 19, 2011
The Crystal Ball 5
“In our last discussion, Curmudge, we talked about Clayton Christensen’s book, The Innovator’s Prescription, and we introduced his concept called disruptive innovation. I see the book as a 441-page Lean exercise. He defines a problem and then develops countermeasures.”
“Good observation, Jaded Julie. The problem is that ‘the growth in health care spending in the United States regularly outpaces the growth of the overall economy.’ The insights of Christensen and his coauthors provide the basis for some mighty convincing countermeasures. Christensen even provides biblical justification for his efforts, ‘Where there is no vision, the people perish.’ (Proverbs 29:18)”
“Wow! This sounds ominous, and we’ve only written two paragraphs. Speaking of writing, we must remind our readers that what appear to be our statements and conclusions are actually the paraphrased or quoted words of Christensen and coauthors.”
“Here’s the thrust of Christensen’s thinking. While much of today’s political dialogue is focused on how to pay for increasingly expensive health care in the future, this book is aimed at reducing costs and improving health care’s future quality and accessibility.”
“As we explained last time, the first step in disruptive innovation is the development of sophisticated technology that simplifies. Shall we start with that?”
“We shall, and let’s consider how technology impacts diagnosis, the first step in one’s visit to the doctor. The human body’s vocabulary is pretty limited in telling us what’s wrong with it. Because there are many more diseases than there are symptoms, many symptoms have to be shared. If a man went to the doctor complaining of a headache, the symptom could indicate a problem ranging from a brain tumor to having too much to drink the night before. Many years ago the diagnosis would have totally depended on the doctor’s experience, intuition, and acquaintance with the patient. This is called intuitive medicine, which leads to trial-and-error therapies with the hope of mitigating the symptoms. Now, modern imaging techniques would take a lot of guesswork out of the diagnosis. As Christensen states, ‘the technological enabler for disruption in health care is the ability to diagnose precisely, which then opens the door for a predictably effective therapy.’ “
“Curmudge, we’ve certainly progressed in the diagnosis of infectious diseases. Identification of the microorganism in a throat culture will allow selection of an antibiotic to wipe out a strep throat pretty predictably.”
“That’s called precision medicine, Jaded Julie. It is ‘the provision of care for diseases that can be precisely diagnosed, whose causes are understood, and which consequently can be treated with rules-based therapies that are predictably effective.’ ”
“It would be really great if we could use this precision medicine for everything. Not only would the patient be cured, but it would cost less than trying this and that therapy with the hope that the symptoms would subside. I presume, Curmudge, that more definitive diagnoses will be matched by development of more directed therapies.”
“That’s the other half of the story, Julie. Recall our stating that the body can’t express enough gross symptoms to tell us what’s wrong? If fact, the body is quite articulate in terms of genetic expression. Although we wish there were more, there are a few specific molecular tests that can identify certain cancers quite specifically. These tests can be teamed with pharmacogenomics, a new branch of pharmacology that aims to develop rational means to optimize drug therapy, with respect to the patient’s genotype, to ensure maximum efficacy with minimal adverse effects. Of course, we’re looking a bit into the future for this kind of personalized therapy."
“Yes, but we already have a name for it. It’s called ‘Personalized Care.’ So how will these changes affect the practice of medicine?”
“We’ve seen examples of how many diagnoses will become more specific and less intuitive and therapies will be more precise and less trial-and-error. Retail clinics staffed by nurse practitioners already diagnose and treat lists of illnesses and conditions, and the lists will undoubtedly expand. Their diagnoses are straightforward, and their therapies are evidence based. One might expect that they will disrupt the primary care physicians, but because of the clinics’ speed, convenience, and affordability, Christensen feels that they compete predominantly against nonconsumption. For a variety of reasons, their patients would skip their vaccinations and tolerate their illnesses until they went away or became serious.”
“Our earlier postings on Information at Your Fingertips and Amazing Devices foretell big changes in the primary care physician’s office. Christensen suggests three innovations that will move primary care docs into the realm of specialists: (1) analytical and imaging capabilities at the point of care, (2) online decision tools, expert system software, and algorithms that guide diagnosis, and (3) telemedicine (remote consultation with an expert).”
“And what about the specialists?”
"They are likely to disrupt one another. Cardiologists doing angioplasty have been disrupting cardiac surgeons for years. Interventional radiologists are disrupting surgeons by their instruments’ enhanced ability to visualize the area requiring surgery.”
“Golly, Curmudge, with a surgical robot even I could perform surgery. So how might these big changes impact the hospitals?”
“Hang in there, Julie. We’ll talk about hospitals next time.”
Affinity’s Kaizen Curmudgeon.
“Good observation, Jaded Julie. The problem is that ‘the growth in health care spending in the United States regularly outpaces the growth of the overall economy.’ The insights of Christensen and his coauthors provide the basis for some mighty convincing countermeasures. Christensen even provides biblical justification for his efforts, ‘Where there is no vision, the people perish.’ (Proverbs 29:18)”
“Wow! This sounds ominous, and we’ve only written two paragraphs. Speaking of writing, we must remind our readers that what appear to be our statements and conclusions are actually the paraphrased or quoted words of Christensen and coauthors.”
“Here’s the thrust of Christensen’s thinking. While much of today’s political dialogue is focused on how to pay for increasingly expensive health care in the future, this book is aimed at reducing costs and improving health care’s future quality and accessibility.”
“As we explained last time, the first step in disruptive innovation is the development of sophisticated technology that simplifies. Shall we start with that?”
“We shall, and let’s consider how technology impacts diagnosis, the first step in one’s visit to the doctor. The human body’s vocabulary is pretty limited in telling us what’s wrong with it. Because there are many more diseases than there are symptoms, many symptoms have to be shared. If a man went to the doctor complaining of a headache, the symptom could indicate a problem ranging from a brain tumor to having too much to drink the night before. Many years ago the diagnosis would have totally depended on the doctor’s experience, intuition, and acquaintance with the patient. This is called intuitive medicine, which leads to trial-and-error therapies with the hope of mitigating the symptoms. Now, modern imaging techniques would take a lot of guesswork out of the diagnosis. As Christensen states, ‘the technological enabler for disruption in health care is the ability to diagnose precisely, which then opens the door for a predictably effective therapy.’ “
“Curmudge, we’ve certainly progressed in the diagnosis of infectious diseases. Identification of the microorganism in a throat culture will allow selection of an antibiotic to wipe out a strep throat pretty predictably.”
“That’s called precision medicine, Jaded Julie. It is ‘the provision of care for diseases that can be precisely diagnosed, whose causes are understood, and which consequently can be treated with rules-based therapies that are predictably effective.’ ”
“It would be really great if we could use this precision medicine for everything. Not only would the patient be cured, but it would cost less than trying this and that therapy with the hope that the symptoms would subside. I presume, Curmudge, that more definitive diagnoses will be matched by development of more directed therapies.”
“That’s the other half of the story, Julie. Recall our stating that the body can’t express enough gross symptoms to tell us what’s wrong? If fact, the body is quite articulate in terms of genetic expression. Although we wish there were more, there are a few specific molecular tests that can identify certain cancers quite specifically. These tests can be teamed with pharmacogenomics, a new branch of pharmacology that aims to develop rational means to optimize drug therapy, with respect to the patient’s genotype, to ensure maximum efficacy with minimal adverse effects. Of course, we’re looking a bit into the future for this kind of personalized therapy."
“Yes, but we already have a name for it. It’s called ‘Personalized Care.’ So how will these changes affect the practice of medicine?”
“We’ve seen examples of how many diagnoses will become more specific and less intuitive and therapies will be more precise and less trial-and-error. Retail clinics staffed by nurse practitioners already diagnose and treat lists of illnesses and conditions, and the lists will undoubtedly expand. Their diagnoses are straightforward, and their therapies are evidence based. One might expect that they will disrupt the primary care physicians, but because of the clinics’ speed, convenience, and affordability, Christensen feels that they compete predominantly against nonconsumption. For a variety of reasons, their patients would skip their vaccinations and tolerate their illnesses until they went away or became serious.”
“Our earlier postings on Information at Your Fingertips and Amazing Devices foretell big changes in the primary care physician’s office. Christensen suggests three innovations that will move primary care docs into the realm of specialists: (1) analytical and imaging capabilities at the point of care, (2) online decision tools, expert system software, and algorithms that guide diagnosis, and (3) telemedicine (remote consultation with an expert).”
“And what about the specialists?”
"They are likely to disrupt one another. Cardiologists doing angioplasty have been disrupting cardiac surgeons for years. Interventional radiologists are disrupting surgeons by their instruments’ enhanced ability to visualize the area requiring surgery.”
“Golly, Curmudge, with a surgical robot even I could perform surgery. So how might these big changes impact the hospitals?”
“Hang in there, Julie. We’ll talk about hospitals next time.”
Affinity’s Kaizen Curmudgeon.
Thursday, May 12, 2011
The Crystal Ball 4
“Curmudge, I understand that you actually bought a book. Typically, you just read the reviews in Amazon and wing it from there. What inspired your investment in the real thing?”
“Well, Jaded Julie, we’re going to push our crystal ball into the somewhat-distant future, right? For that we’ll need some high-powered insight, and that doesn’t come free. So I dug down into my dresser, blew the lint off a credit card, and purchased The Innovator’s Prescription by Clayton Christensen and two MDs, Jerome Grossman and Jason Hwang.”
“We mustn’t forget that material in Kaizen Curmudgeon can’t be controversial. So how can we present Christensen’s forecasts without generating controversy?”
“For the most part, Christensen writes about several years into the future and supports his position with data from the fairly distant past. People tend to get riled up over the present, the immediate future, and the recent past. That, as well as Christensen’s compelling arguments, should keep the discourse civil. Additionally, we are going to simply convey parts of Christensen’s message and do it diplomatically and selectively.”
“The focus of Christensen’s earlier writings—and they were not about health care—was disruptive innovation. What is that, anyway? It sounds both disturbing and encouraging at the same time.”
“In Christensen’s words (signified by single quotation marks), ‘the disruptive innovation theory explains the process by which complicated, expensive products and services are transformed into simple, affordable ones.’ “
“Curmudge, even a mind as swift as mine would appreciate an example.”
“It’s coming at you, Julie. Back in the 1960’s (ah, it seems like yesterday) only a few talented engineers could build IBM’s room-sized, mainframe computers. They were sold directly by IBM to institutions for hundreds of thousands of dollars. Then along came a technological disruptor, the microprocessor, that simplified computer design and assembly and enabled personal computers to be assembled from parts in Michael Dell’s dorm room. Soon virtually everyone, like me who had never thought about computers, could afford a computer and had one on his desk.”
“But this transformation involved more than just the advent of the microprocessor, didn’t it?”
“Right. IBM set up a new business model to make money with low margins, low overhead, and high unit volumes. In addition, components became commodities, marketing was done by independent vendors, and software was developed for unsophisticated users. Lots of organizations could participate in and profit from this so-called economically coherent value network.”
“I think I have the basics, Curmudge. For successful disruptive innovation, the requirements are ‘(1) sophisticated technology that simplifies, (2) low-cost, innovative business models, and (3) an economically coherent value network.’“
“You got all of that from what I just said? You must have been reading the book. Come back next time and we’ll begin to explore how Christensen translates these concepts into health care.”
Affinity’s Kaizen Curmudgeon
“Well, Jaded Julie, we’re going to push our crystal ball into the somewhat-distant future, right? For that we’ll need some high-powered insight, and that doesn’t come free. So I dug down into my dresser, blew the lint off a credit card, and purchased The Innovator’s Prescription by Clayton Christensen and two MDs, Jerome Grossman and Jason Hwang.”
“We mustn’t forget that material in Kaizen Curmudgeon can’t be controversial. So how can we present Christensen’s forecasts without generating controversy?”
“For the most part, Christensen writes about several years into the future and supports his position with data from the fairly distant past. People tend to get riled up over the present, the immediate future, and the recent past. That, as well as Christensen’s compelling arguments, should keep the discourse civil. Additionally, we are going to simply convey parts of Christensen’s message and do it diplomatically and selectively.”
“The focus of Christensen’s earlier writings—and they were not about health care—was disruptive innovation. What is that, anyway? It sounds both disturbing and encouraging at the same time.”
“In Christensen’s words (signified by single quotation marks), ‘the disruptive innovation theory explains the process by which complicated, expensive products and services are transformed into simple, affordable ones.’ “
“Curmudge, even a mind as swift as mine would appreciate an example.”
“It’s coming at you, Julie. Back in the 1960’s (ah, it seems like yesterday) only a few talented engineers could build IBM’s room-sized, mainframe computers. They were sold directly by IBM to institutions for hundreds of thousands of dollars. Then along came a technological disruptor, the microprocessor, that simplified computer design and assembly and enabled personal computers to be assembled from parts in Michael Dell’s dorm room. Soon virtually everyone, like me who had never thought about computers, could afford a computer and had one on his desk.”
“But this transformation involved more than just the advent of the microprocessor, didn’t it?”
“Right. IBM set up a new business model to make money with low margins, low overhead, and high unit volumes. In addition, components became commodities, marketing was done by independent vendors, and software was developed for unsophisticated users. Lots of organizations could participate in and profit from this so-called economically coherent value network.”
“I think I have the basics, Curmudge. For successful disruptive innovation, the requirements are ‘(1) sophisticated technology that simplifies, (2) low-cost, innovative business models, and (3) an economically coherent value network.’“
“You got all of that from what I just said? You must have been reading the book. Come back next time and we’ll begin to explore how Christensen translates these concepts into health care.”
Affinity’s Kaizen Curmudgeon
Thursday, May 5, 2011
The Crystal Ball 3
“Do I detect, Curmudge, that we are slowly tuning our crystal ball to look further into the future?”
“What do you expect, Jaded Julie? Everything I do is done slowly. I even sleep slowly. One of my friends once said, ‘Sleep is just practice for being dead.’ I practice slowly so I don’t get too good at it.”
“I understand that today we discuss the last of the health care ‘knowledge purveyors’ on our list, Sg2. This is another organization supported by membership dues and fees for services they provide. Fortunately, Affinity is a member.”
“On the Kaizen Curmudgeon scale of consultancies, Sg2 is neither a supermarket nor a ‘mom-and-pop store.’ Their team includes MDs, PhDs, RNs and health care leaders with extensive strategic, operational, clinical, academic, technological and financial experience. According to their home page, they ‘help build a foundation for improving care delivery and overall organizational performance.’ Their logo includes ‘health care intelligence.’ That certainly suggests a forward-looking focus.”
“Sg2 offerings include meetings, courses, and web seminars. Their EDGE intelligence system provides in-depth reports, growth guides, and technology guides on a wide range of medicine-related topics.”
“Jaded Julie, if your aim is to be in health care administration, these statements by the CEO of Sg2 ought to catch your attention: ‘This is 2001 in the airline industry. Make no mistake, the Southwest Airlines equivalents in health care are going to wreak havoc on the mainline health care providers.’ ‘Growth is not going to come from performing more procedures and getting more referrals, it is going to come from providing a fundamentally better product at a lower price point.’ “
“The CEO of Sg2 is obviously a bit of a salesman, but Curmudge, what he said is enough to waken you from your afternoon nap.”
“You be sure to be awake next time, Julie, and we’ll try to conjure up some countermeasures for the day of reckoning.”
Affinity’s Kaizen Curmudgeon
Note: An observation on the practice of emergency medicine in a primitive location may be accessed via this link.
“What do you expect, Jaded Julie? Everything I do is done slowly. I even sleep slowly. One of my friends once said, ‘Sleep is just practice for being dead.’ I practice slowly so I don’t get too good at it.”
“I understand that today we discuss the last of the health care ‘knowledge purveyors’ on our list, Sg2. This is another organization supported by membership dues and fees for services they provide. Fortunately, Affinity is a member.”
“On the Kaizen Curmudgeon scale of consultancies, Sg2 is neither a supermarket nor a ‘mom-and-pop store.’ Their team includes MDs, PhDs, RNs and health care leaders with extensive strategic, operational, clinical, academic, technological and financial experience. According to their home page, they ‘help build a foundation for improving care delivery and overall organizational performance.’ Their logo includes ‘health care intelligence.’ That certainly suggests a forward-looking focus.”
“Sg2 offerings include meetings, courses, and web seminars. Their EDGE intelligence system provides in-depth reports, growth guides, and technology guides on a wide range of medicine-related topics.”
“Jaded Julie, if your aim is to be in health care administration, these statements by the CEO of Sg2 ought to catch your attention: ‘This is 2001 in the airline industry. Make no mistake, the Southwest Airlines equivalents in health care are going to wreak havoc on the mainline health care providers.’ ‘Growth is not going to come from performing more procedures and getting more referrals, it is going to come from providing a fundamentally better product at a lower price point.’ “
“The CEO of Sg2 is obviously a bit of a salesman, but Curmudge, what he said is enough to waken you from your afternoon nap.”
“You be sure to be awake next time, Julie, and we’ll try to conjure up some countermeasures for the day of reckoning.”
Affinity’s Kaizen Curmudgeon
Note: An observation on the practice of emergency medicine in a primitive location may be accessed via this link.
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