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Harvard's Clay Christensen: Healthcare Debate Needs Sharper Focus

Clayton Christensen's views on innovation are oft-cited in discussing the ills and opportunities in many industries. His book The Innovator's Prescription: A Disruptive Solution for Health Care (co-authored with Dr. Jerome Grossman and Dr. Jason Hwang) presents a distinct view on how health care in the United States can be radically transformed. As battle lines on health-care reform harden in Congress, and as town hall meetings nationwide degenerate into melees, it seemed an opportune time to get the Harvard professor's views on the current state of the health-policy debate. (You can also check out our earlier discussion with Professor Christensen about his seminal health care book.)

Clayton ChristensenBNET: Some couch health-care reform as a debate between quality and excellence vs. accessibility and cost. Do you see that distinction, or do you frame the issue in another way?

Christensen: I think that's a false dichotomy. The cost in the system is really driven by "business model malpractice" -- using business models that weren't designed well to provide the care that needs to be given. The cost is in the overhead in hospitals and doctors' practices; it's not really driven by how much we compensate physicians. The quality of care is driven by the extent to which processes for delivering care are tightly coupled, so that details don't fall through the cracks. By tightly coupling care so that we diagnose diseases precisely, we will make sure we don't have patients go from here to there, from this doctor to that doctor, and this department to that department. Then, by having appropriate business models tightly focused on the individual diseases, we reduce overhead costs.

BNET: From what you've heard of recent proposals, do you see anything that will address this problem systemically, or is it a facility-by-facility issue?

Christensen: There isn't anything being discussed in Washington that begins to address this problem. Some of the leading providers such as Kaiser Permanente are very aggressively moving in this direction already. They started the move before they read our recent research on health care, but that work has given them a logic and an impetus for moving even faster. The Cleveland Clinic, the Mayo Clinic, and Kaiser Permanente have all taken major steps to set up focused-solution shops for major categories of disease.

BNET: Has any of the research you've done dealt with patient privacy issues and how improving the information flow throughout the system can provide better outcomes and smarter business models?

Christensen: We've thought a lot about this. it's such a deep issue that we only dealt with it a bit in The Innovator's Prescription. But subsequently, we've worked with a number of [physicians and other experts] to develop a better sense of what electronic medical records can do, what they need to do, and how they can be built in a way that respects people's confidentiality. Basically, there are jobs that have to be accomplished by patients or doctors that cause them to pull these types of records into their lives or practices. When we buy products or services, we are "hiring" them to get these jobs done for us. One of the key findings from our research on innovation is that understanding the customer has you focusing on the wrong unit of analysis. But if you develop products that enable people to get particular jobs done, it is much easier because that job is the causal mechanism for the purchase. If you develop a product or service for a job that a customer is not trying to accomplish currently, it rarely succeeds. But if you help them do something they are currently trying to do, we call this a killer app.

A current concept in Washington is that they will pay doctors $50,000 to implement electronic medical records in their offices. What's going to happen under that scenario is the electronic medical records will just sit in doctors' offices unused. The data will just be on disk drives instead of in filing cabinets. No one has yet developed applications that allow doctors to use these electronic records to get important jobs done in their practices. There are no applications where an electronic record is currently superior to a paper record from the perspective of the doctor, given the way their work is structured. It's not a technical obstacle or an economic obstacle, it's a marketing obstacle.

We'll continue our discussion with Professor Christensen next week and hear his views on Massachusetts' universal insurance coverage policy and if it can serve as a model for national plans. You can read that installment by clicking here.