The author of the Circle Prize for Inspiring Innovation-winning book, The Innovator’s Prescription, talks to HSJ about disrupting healthcare.
He has written one of the most highly regarded business books of his generation, been consulted by US presidential candidates and counts New York mayor Michael Bloomberg among his many high flying fans. He is 6 foot, eight inches tall, a leading member of the US Mormon Church and appeared on the cover of totemic US business magazine Forbes this March.
He is a diabetic who has recently survived, in quick succession, a major heart attack, advanced stage cancer and a stroke. Suffice to say that Clayton M Christensen is not your normal HSJ interviewee.
In the mid-nineties the Harvard Professor developed the concept of “disruptive innovation”. This is described on his website as “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”
This concept was developed and illustrated in 1997’s ‘The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail’. It went on to become a best seller. Earlier this year, the Economist named it as one of the six best business books ever written.
Over the last 14 years Professor Christensen and colleagues have explored how the concept applied to a wide range of industries and sectors. In 2009 he worked with two US doctors, Jason Hwang and the late Jerome Grossman, to produce ‘The Innovator’s Prescription - A Disruptive Solution for Health Care’. This book was the unanimous choice of HSJ’s judges to receive the Circle Prize for Inspiring Innovation.
In September HSJ spoke to Professor Christensen and Dr Hwang over a temperamental transatlantic phone line and begun by asking them how familiar they were with the government’s NHS reforms.
Professor Christensen says his knowledge comes from UK healthcare “leaders” who attend programmes run by the Harvard Macy Institute. He teaches on the programme, as does Future Forum chair Steve Field. Dr Hwang also claims a similar, “superficial familiarity” with NHS reform.
In the Innovator’s Prescription the authors appear to suggest that countries “without a substantial private [healthcare] sector” face an uphill battle driving innovation. However, the Professor has significantly modified his views since then.
A comparison of the publically-funded Canadian system with US healthcare has led him to the belief that “it doesn’t matter who writes the cheques”, both public and private systems have an equally hard time introducing innovation. The biggest problem is that both systems are organised in “silos” in which each “entity” has its own budget and “trade-offs” between them to improve the effectiveness of the system are often very complicated.
In contrast he believes the NHS has the potential “to make decisions that are more systemic in nature, which is something that I really strongly believe that America has to emulate.”
Dr Hwang jumps in with an example: “In the National Institute for Health and Clinical Excellence you have a single entity acting on behalf of the entire system to make the appropriate trade offs on behalf of British citizens.”
However, the authors’ view of how US healthcare providers are encouraged to act by the “silo” approach, does seem to have some echoes with the UK hospital sector.
“The Boston Children’s Hospital is one of the best in America”, explains Professor Christensen. “After a long period of study they adopted a new protocol for dealing with children who come with asthma to their emergency room and as a result they reduced the overnight stays by 80 per cent with much better outcomes. On the next agenda of the hospital’s senior management meeting, item number one was how do we fill those [now empty] beds?.”
Much better, says the Professor, is the approach adopted by “systemic organisations” like Pennsylvania’s Geisinger Health System that “profit” by keeping people out of secondary care. They are, adds Dr Hwang “amongst the highest performing and yet most cost efficient models in the US.”
Professor Christensen says hospitals should not be seen as profit generators, but as cost centres working “underneath” a larger organisation that has a responsibility for the health of a population.
He says it is necessary to create “a financial structure” that integrates “all elements of care” and gets “people out of hospitals into outpatient clinics, out of outpatient clinics into doctors’ offices and then out of doctors’ offices into their homes. That [facilitates the] shift of care to providers who are most apt for the job.”
This interest in “integrated healthcare” has led the authors to further explore its potential. Dr Hwang says their research has shown “the more tightly integrated services were, the more likely they were to hold the belief that hospital beds are really a cost to be avoided and to emphasise wellness and prevention.”
This need to think beyond treating the ill is key, he adds.
“Health Partners, who are a very high performing system [in Minnesota], have demonstrated they can provide the preventative care people are supposed to get and yet they haven’t been able to make much of a dent in rates of obesity or smoking. As a healthcare system the focus is still on healthcare delivery and it cannot impact on things like building cycle paths, making sure there are parks in the area, ensuring that there aren’t a significant number of fast food restaurants. Those things require an integrated effort”.
However, Professor Christen believes there is a pressing need to “define integration correctly”, as at present it can mean “communism at one end and chaos and competition on the other.”
His view is that it would be “crazy” for it to manifest as a “top driven plan that makes all the decisions for everybody below”. Instead it should be achieved at “a regional level” by “teaching everybody who is responsible for this [the delivery of integrated care] the principles by which they have to play the game.”
Once again, Professor Christensen comments: “I think you’re in a much better position than America is to do what needs to be done.”
And where should the world turn to see the best examples of integrated care. “For me”, he says, “Finland has many of the characteristics of integration right.”
So are the current NHS reforms which focus on developing a new breed of commissioners, thereby preserving the purchaser/provider split, missing a trick?
“There is something about [the creation of clinical commissioning groups] that doesn’t feel right to me”, says Professor Christensen. You should not separate the requirement to decide where the money is being spent from the people who provide the care” as this will, among others things, incentivise the wrong behaviour from providers and deprive commissioners of valuable information.
“So you’re saying health care doesn’t work as well if there is a conventional purchaser provider split?”, asks HSJ in clarification. “Yes that’s correct”, the author’s respond in unison.
Professor Christensen also warns against the overuse of financial incentives or “paying you to want what I want” as this is often counter-productive.
“What motivates people to do things independently in a sustained way, whether there are good times or bad times, is the opportunity to be recognised, to learn and to impact upon other peoples’ lives. It’s not just in healthcare but in industry after industry what motivates people is the opportunity to make a difference and grow in their responsibility to contribute to the goodness and wellness of others.”
But despite these views it is unlikely that Professor Christensen and Dr Hwang will be adopted as the new poster boys by those battling against the NHS reforms.
On competition, Dr Hwang says: “given the [inevitable] variability within the system, you still want to use some sort of market competition to ensure people are getting the best care possible.”
The authors are also very nervous about patients not paying directly for their own healthcare. Professor Christen says that if a government or an employer funds healthcare it makes a “huge difference” in the responsibility people take for managing their own health, as well as distancing them from the information they need to do it. Dr Hwang says simply that single payer systems are “the best way to disenfranchise patients from their healthcare decision making.”
He adds the most effective way to protect patients from conflicts of interest like the ones some fear might arise from giving GPs responsibility for commissioning is to “openly hand over more responsibility to the patients.”
He continues: “ownership of your health data enhances patients’ capability and responsibility for managing decisions”, concluding “the right [internet] portal and the right information tools” would be the most effective way to “displace” the effect of any conflicts of interest.
Turning specifically to the authors cause celbre, Dr Hwang says the NHS’s £20bn efficiency challenge is “a perfect opportunity to disrupt thinking” in how best to organise and deliver healthcare.
He says the temptation will be to focus on “wringing out as much inefficiency as possible” from the existing system
“The problem with that”, he adds “is that the [existing] system is high cost and it doesn’t matter how efficient you get, you will find that the amount of overheads and the amount of expertise involved in the services that you are attempting to provide are always going to be expensive.
“I know that there is a dependency [in the NHS] on a strong and broadly acceptable primary care network with everyone having access to a GP. However, there is a need to continually develop new professionals who are capable of taking on some of those skills that are today only reserved for the high cost, highly trained experts. Having that continuous development of skill transfer is necessary to ensure that costs remain sustainable for everybody.
“Rather than trying to wring out savings”, he continues, “or trying to cut the spending and thereby drive providers out of the system, a disruptive rationale would encourage you to think about what new services could be developed that are more convenient and acceptable and yet lower cost at the same time as being of the same or better quality. That is where you get savings and quality improvements and convenience all at the same time.”
Professor Christensen picks up the thread: “The trade-offs that higher quality means higher cost and lower cost means lower quality are embedded in the existing model. So if you assume that the model of delivery is fixed then you are going to be in the middle of all these arguments [over cost vs quality]. You have to break the trade off so you can have higher quality and lower cost and better accessibility. It’s proven that that is possible, but it only comes from the business model of innovation and that ought to be the pure focus of your attempts.”
He concludes by reflecting on the rows sweeping both the US and the UK on the relative performance of various health systems and approaches.
“It’s an idiot simple realisation which occurred to me several years ago. Data is only available about the past and so if you can’t move into the future unless you have data then you actually can’t innovate because you can’t get the data until you take action and so on. The whole paradigm that innovation has to be predicated upon data that tells us the right thing to do is just a non starter and is circular in its logic.
“Even when you have data it has no meaning unless you have a theory that gives meaning to the data. If someone does a study that concludes that Finland’s system performs betters than the system in the Netherlands, then someone who is not served by that conclusion will undertake another study which shows just the opposite.
“We need to make decisions based upon sound theory and sound principles. That is the only way you can move into the future with confidence that what you are doing is going to have the effect you want.”