scotusYesterday, the U.S. Supreme Court handed down a 6-3 verdict in favor of the defendant in the much publicized case, King v. Burrill. The ruling upholds federal tax subsidies for eligible Americans living in states without their own health insurance exchanges. This means, at least for now, we’ve avoided a mad scramble for some 8 million Americans who would have lost their insurance had the verdict gone the other way. However, the debate will rage on, as the 2016 presidential election will likely bring the health care issues to the forefront of the campaign.

In our earlier post discussing the case, we focused on core health care issues that both sides of the aisle could agree on, and that ultimately make health care more affordable, accessible, and effective. These issues are becoming increasingly serious because most current efforts to improve health care continue to raise the total cost of care. For example, President Obama’s pledge (per his SOTU address in January) to advance the field of precision medicine will require significant investment and time before the fruit of cost savings is achieved. And while the ACA might guarantee health insurance, it does not guarantee that effective medical care will actually be accessible to those who are insured.

How can we help Americans navigate the treacherous landscape of health care complexity? What are some of the key enablers of potential transformations in health care? Are there solutions to these growing concerns?

Our answers to these questions are rooted in the theories of disruptive innovation. Because disruptive innovations are the only type of innovations that make a product or service more affordable and accessible, it is safe to say that disruption may hold the key to health care’s most difficult questions. To that end, we offer the following considerations:

Navigating the treacherous landscape of health care

Through the lens of disruptive innovation, effective navigation in health care focuses on the “jobs” for which Americans “hire” health care. In this context, a job is a patient’s circumstantial need requiring different solutions for the same need depending on time. This means health care products and services are evaluated and valued differently from patient to patient, depending on the circumstances in which they find themselves. For many chronic diseases, such as Alzheimer’s disease, consuming health care might be more important to family members and other caregivers who are in charge of patient’s day-to-day activities. Creating innovative approaches to address the needs of these chronic patients and their families (and approximately 45% of Americans suffer from some kind of chronic illness) will have significant impact not only on reducing the overall cost burden on our health care system, but also reducing the complexity of the health care landscape for all involved in care.

The most critical question in the wake of this verdict remains to be whether someone who should go see a physician can readily access the service. Our health care system is already optimized for those who must receive care, but there are more questions than answers on those who should receive care, especially those suffering from early stages of chronic diseases. By design, disruptive innovations target these “displaced” patients who need health care to fulfill very specific jobs regarding treatment and management of their illness.

Key enablers of potential transformations in health care

The recent successful initial public offering (IPO) of Fitbit, Inc. reminds us of the perceived importance of technology in transforming health care. Unfortunately, the power of novel technology can only be effectively harvested when the technology can create a new adoption paradigm. For example, the adoption of wearables will be nothing more than a fad if the resultant data cannot impact user behavior. While there is plenty of evidence that the health monitoring device market is exploding, it’s still too early to tell if the data is actually having a meaningful impact on users.

On the other hand, the benefits of new care models are already highly compelling. The value of retail clinics, for example, can be readily assessed as they improve patient access to simple medical care. Similarly, the value of telemedicine in select disciplines like radiology and psychiatry is also well established. Many revolutions in health care will come from disruptive business models rather than the emergence of a new technology. So while technology remains important in enabling these low cost, highly accessible solutions, meaningful health care transformations will not happen without disruptive business models that transform unorganized and intuitively administered care into precise, repeatable care processes.

To that end, we find technologies that can bring high quality care and diagnosis to a patient’s bedside to be potentially disruptive. The modalities, whether they be point-of-care diagnostics, telemedicine, retail clinics, or web-based services, matter less. What matters most are the aspects of the traditional care model that could be stripped away and brought to patients in simple, effective and low-cost fashion.

Our health care system is a complex labyrinth of treatments. Although many tools are helpful in managing the complexity, they are, in fact, insufficient in leading us out of the maze. To discover a pathway to simplicity (and affordability and accessibility) we need a detailed map that can tell us where we are and where we need to go. We must remember that the ACA, now given new breath by the Supreme Court, is a tool to manage life within the maze—not a map to escape the broken system altogether. What we need are useful maps. Disruptive business models that reflect our current circumstance and provide improvements with little switching cost are desperately needed. New tools and technologies will need to be introduced, of course. But let’s move beyond the debate of whether a tool is useful or not and focus on the business models that will get us out of this maddening maze.


  • Spencer Nam
    Spencer Nam