Innosight is collaborating with the Clayton Christensen Institute on a series of healthcare reports. We’re focusing on ways incumbents can leverage disruptive innovation and new consumer-focused business models to improve care while lowering costs.

How Disruptive Innovation Can Finally Revolutionize Healthcare

A Plan for Incumbents and Startups to Build a Future of Better Health and Lower Costs
By: Clayton Christensen, Andrew Waldeck and Rebecca Fogg
May 2017

The discussion around reforming healthcare tends to focus on progress the industry makes against prescribed numbers—lowering the rate of the uninsured, boosting productivity, and improving metrics around new payment models. While these high-level measurements are important for tracking performance, they distract from the understanding of the true causal mechanism of how industries become more affordable and accessible.

Download Part I of our healthcare report series  

Nearly a decade ago, The Innovator’s Prescription showed how disruption could transform healthcare. Yet unlike other industries, healthcare has been largely immune to the forces of disruptive innovation. Whereas new technologies, new competitors, and new business models have made products and services much more affordable and accessible in fields ranging from media, telecom, finance, and retail, the U.S. healthcare sector keeps getting costlier, and is now by far the world’s most expensive system per capita, about 2X higher than the U.K., Canada, and Australia, with chronic conditions such as diabetes and heart disease now accounting for more than 75% of total spending. At the same time, there has been a widening disparity in the quality of care Americans receive depending on their income and where they live.

Regulatory changes have aimed at shifting costs and risks around the system yet have largely missed the true nature of the problem—the fundamental disconnect between what patients need in order to maximize their health and what they actually get as consumers: more services and treatments that generate revenue. Due to this disconnect, even the shift from fee-for-service to value-based care, while helpful, has not yielded the expected benefit.

While it’s taken longer than expected, we can now point to promising solutions in the marketplace. In Part I, we set the context, focusing on why disruption has not taken hold in the delivery practices of hospitals and physicians groups. In Part II, we zero in on how disruptive solutions have begun to improve health while lowering costs for significant populations.

Health For Hire

Unleashing Patient Potential to Reduce Disease Costs
By: Clayton Christensen, Andrew Waldeck and Rebecca Fogg
October 2017

Spiraling healthcare costs have been of grave concern to prominent segments of industry, government, and the public for at least 50 years. And while the cross-sector battle rages on over the appropriate strategy for addressing them, there is one fact upon which clear-eyed industry analysts agree: There can be no solution to the healthcare crisis that does not address America’s unchecked epidemic of chronic disease, which afflicts more than half our citizens and consumes 86% of the exorbitant $3.2 trillion spent each year on care.

Download Part II of our healthcare report series  

But our traditional healthcare delivery system, designed to excel at episodic acute care, has not made a dent in the problem. To prevent and reduce the cost of managing chronic disease, the system must learn to facilitate change in individual behavior, which has the greatest impact on health of any contributing factor, including healthcare. The Theory of Jobs to Be Done is a powerful tool toward this end.

Jobs Theory explains that everything people consciously choose to do (including doing nothing), they do to make progress according to their own priorities, in a particular set of circumstances. We call this progress a “job,” and it motivates individuals to search for solutions. Based on this insight, the theory asserts that the way to unleash patients’ potential to better manage their health is not to try to get them to prioritize health goals over the jobs they’re already striving to do. Instead, it’s to understand those jobs, and help patients accomplish them in ways that enhance their health, rather than detract from it.

For instance, a person striving to feel less lonely might “hire” a cat, a walking group, more hours on Instagram, or smoke breaks with colleagues to do that job. Each of these solutions has health consequences, ranging from positive to negative. Jobs Theory provides a framework for creating solutions for patients’ jobs that also have positive health consequences.

WATCH INNOSIGHT’S ANDY WALDECK ON CHANGING THE BASIS OF COMPETITION IN HEALTHCARE

 

About the Authors

Clay Christensen - Thumbnail - 130x130

Clayton Christensen is the Kim B. Clark professor of Business Administration at the Harvard Business school and co-founder of Innosight.

 

 

Andy Waldeck - Thumbnail - 130x130

Andy Waldeck is a senior partner at the growth strategy consulting firm Innosight, where he leads the firm’s healthcare practice.

 

 

rebecca-fogg

Rebecca Fogg is the senior research fellow in healthcare at the Clayton Christensen Institute, a nonprofit, nonpartisan think tank dedicated to improving the world through disruptive innovation.

How We Partner With Healthcare Leaders

The rise of consumer-centric health. The shift to value-based delivery models. Solving the twin challenges of high costs and inconsistent quality. Embracing digital health technologies. These are some of the mega-trends driving the future of healthcare and life sciences. Innosight collaborates with leaders across the sector to bring bold visions of tomorrow to today’s businesses.

Learn more about how Innosight partners with leaders at healthcare organizations here.