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Disruptive innovation – A potential solution to transform American healthcare


Disruptive innovations are radical changes that often overturn the usual way of doing things to such an extent that they have a positive ripple effect throughout the industry.

heart stethoscope | © lenetsnikolai - stock.adobe.com

© lenetsnikolai - stock.adobe.com

Unfortunately, change comes very slowly to healthcare. Innovation is not readily accepted and often meets challenges and obstacles to introducing new technology and new medical treatment methods. The status quo and the "not invented here" attitude are the usual responses to innovation in healthcare. This article will discuss the concept of disruptive innovation and suggestions for introducing disruptive innovation in modern healthcare.

Nearly every physician and anyone involved in the healthcare profession agrees that the American healthcare system is ailing. It is expensive: $4T spent annually and 18% of GDP.1 We may have the most expensive healthcare system on the planet. Yet, we don't have the outstanding outcomes and longevity compared to other Western countries. Our patient satisfaction scores are decreasing, with patients having difficulty accessing care. Unfortunately, we have paid more attention and money to focus on the most complicated diseases while paying insufficient attention to the needs of the patients with more common ailments such as diabetes, cardiovascular disease, cancer, and neurodegenerative disorders.

Disruptive innovations (DI) are radical changes that often overturn the usual way of doing things to such an extent that they have a positive ripple effect throughout the industry.

A potential solution to the sickness of American healthcare is for all the players to embrace DI. This will make healthcare less expensive and more convenient, with better outcomes and improved patient satisfaction scores. Healthcare systems that embrace these DIs will be profitable, stemming the financial hemorrhaging that is exsanguinating the healthcare system, making the current system unsustainable.

U.S. healthcare could resolve the crisis by lowering the cost of care, providing higher quality care, and greater convenience than what is currently available.

How will DI solve the healthcare crisis?

DI will create a system that matches clinicians' skill levels to the level of medical difficulty. DI can manage simple problems, e.g., strep throat, flu, uncomplicated UTIs, and mild hypertension, and encourage clinicians like primary care doctors and allied health providers (AHP), such as nurse practitioners, physician assistants, and medical assistants, who can follow predictable algorithms for diagnosis and treatment.

Many infectious diseases, such as URIs, uncomplicated UTIs, and sexually transmitted diseases, also fall into this category. Another example is Type I diabetes, where symptoms of blurred vision, increased thirst, weight gain, and frequency of urination suggest to a healthcare provider the appropriate diagnosis. Standardized treatment protocols can be instituted once a diagnosis is confirmed with fasting glucose and hemoglobin A1C.

We have learned with evidence-based experience that easily recognized conditions can be reliably diagnosed and treated by less highly skilled professionals. However, various practitioners will argue against this approach in common conditions. DI will occur when creating processes that funnel complex problems to physicians with skills appropriate for these second-tier conditions.

Another example is the use of telemedicine. We have learned from the pandemic that many medical conditions can be safely and efficiently managed using a virtual visit with our patients. We have discovered and become comfortable with virtual visits that don't require the doctor to be in the same exam room with the patient or the doctor's need to touch the patient.

According to Dr. Clay Christensen, professor of business administration at the Harvard Business School, disorders that were previously managed in a problem-solving mode will be handled in a pattern recognition mode, and those that must be addressed through pattern recognition, the rule-based approach will be sent to the appropriate clinician with the skill level that is matched to the difficulty of the medical problem.2

Another example is precision medicine, which has become possible with human genome mapping. Just a few decades ago, leukemia was considered a single disease. The diagnosis and treatment were considered a complex problem. However, we discovered that no two patients responded identically to the same treatment. This required the problem-solving skills of a highly trained oncologist, with a greater understanding that leukemia is at least six different diseases. Each of these leukemias is characterized by a specific genetic pattern, and patients can be precisely diagnosed by matching their patterns to a template. Now, the treatment is customized for each patient, which results in better outcomes.

It is possible to expand nurse practitioners, physician assistants, and medical assistants' roles as primary care providers and give them the ability to accurately refer more complicated conditions to physicians with more sophisticated diagnostic skills.

Physicians should embrace this DI. Rather than reject nurse practitioners stepping on their turf, doctors should accept that NPs should use advances in diagnostic and therapeutic technologies to perform services previously done in hospitals and with the oversight of specialists. This results in escalating cost of care. Enlightened physicians accept this DI and do not fight or argue with primary care doctors and allied health professionals. Ultimately, this is how technological progress and patient needs will be met and will improve outcomes and lower the cost of care.

Some examples of managed care organizations offer primary care doctors a financial incentive not to refer patients to specialists. This concept may result in primary care doctors providing the care they need to be more competent to treat.3

Second, DI would invest more money in technologies that simplify complex problems and less in high-end, costly technologies. Most research and development go to complex solutions for complex issues that require the most skilled physicians to solve complex problems that could not be managed with the previous approach that didn't include primary care doctors and ALPs. Instead, money could be funneled to projects focused on technologies that simplify diagnosis and treatment for the more common, less complicated diseases. We should encourage significant healthcare companies, perhaps with tax incentives, to invest in DI that could generate substantial growth and profit with less investment.

Finally, it is necessary to overcome the inertia of cumbersome regulation. Instead of preserving the status quo, regulators should create pathways to enable DI to emerge. The U.S. automakers depended on import quotas to keep disruptive Toyota and Honda from competing in the U.S. markets. However, regulators are inclined to be even more protective of stodgy, antiquated professions and institutions in healthcare than they were of the U.S. automakers. The connections between healthcare institutions, insurance companies, and federal and state regulators are intense and focused on preserving the status quo. That's why ophthalmologists and their national organizations prevented optometrists from instilling eye drops until just a few years ago.4 (Freddo, T. F., Ho, D. Y., Steenbakkers, M., & Furtado, N. (2020). Validation of a more reliable method of eye drop self-administration. Optometry and Vision Science97(7), 496-502.) Or why NPs were forbidden from diagnosing and treating simple, non-complex illnesses in many states.

Another example is a new portable X-ray machine that could be used in the office setting rather than in the hospital or expensive imaging centers; this would reduce costs for patients and insurance companies. Regulators could support the new technology and address any concerns regarding risks. This would include a requirement that all images interpreted by non-radiologists be transmitted via electronic means to a second-opinion center. There, skilled radiologists could provide oversight and confirm or reject the initial diagnosis. This benefits the patient and primary care doctors, enhancing efficiency and ultimately reducing costs.

My take-home message is that by using DI to change the existing system, regulators need to accept changes in the job descriptions of the disruptors. There is a need to enable DI to emerge and not resist it so vehemently.

Bottom Line: DI will emerge when the stakeholders work together rather than regulate the existing system and stand in the way of disruption. The stakeholder needs to remove the barriers that have prevented disruptions from occurring. The current system cannot sustain itself. Essentially, there are three approaches to consider. 1) Control costs by consuming less healthcare. This is a healthcare rationing, and that will not work. 2) Impose reimbursement controls that force providers to become more efficient, and 3) Consider having the government subsidize the high cost of healthcare for segments of the population that don't have access or can't afford healthcare. Let's go forward with DI, which will create higher quality and more convenient care at a lower cost.


  1. Margaret Schulte, D. B. A. (2022). Healthcare delivery in the USA: An introduction. Productivity Press
  2. Christensen CM. The Innovator's Dilemma. Harvard Business School Press, 1997
  3. Shortell, S. M., Gillies, R. R., Anderson, D. A., Erickson, K. M., & Mitchell, J. B. (1996). Remaking health care in America. Hospitals & health networks70(6), 43-4
  4. Freddo, T. F., Ho, D. Y., Steenbakkers, M., & Furtado, N. (2020). Validation of a more reliable method of eye drop self-administration. Optometry and Vision Science97(7), 496-502

Dr. Neil Baum is a physician in New Orleans and the author of The Business of Building and Managing a Healthcare Practice, Springer 2023

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