The Innovators Interview: Conversations with Jason Hwang

20 Feb The Innovators Interview: Conversations with Jason Hwang

Interview (ĭn‘tər-vyū) n.

1. A conversation, such as one conducted by a reporter, in which facts or statements are elicited from another.
2. An account or a reproduction of such a conversation.

I have long been a fan of Clay Christensen and his concepts of Disruptive Innovation (DI). I devoured the book and the subsequent follow on books. It resonated with me because of what we were doing at Medsphere so closely aligned with what the principles and concepts in the book. As I have now transitioned more into the personal health space, and begun dabbling in health policy and systematic reform by default, I have come to further appreciate how the notions of DI can and should be applied to health care. I believe by so doing we can harvest the DI fruits of increased access, lowered costs, and improved quality of products/services.

J: I attendd the University of Michigan Medical School and did my internal medicine residency at UC Irvine Medical Center. I tehn spent a year as Chief Resident at UC Irvine and another year working at Kaiser Permanente. While I enjoyed the work and my colleagues, I was left with a sense that I wasn’t doing enough or contributing at the right level to solving some of the issues I was facing in everyday practice. I determined to go to business school and was accepted at Harvard. In addition to working closely with very impressive colleagues, I was privileged to take a course from Clay Christensen. It turned out that he had been toying with the idea of writing a health related book for a long time, and I answered the blast email sent to find students interested in collaborating on the project. Over the next two years, I immersed myself in the research, writing, and revision of the book. During this experience, and with all the interaction we had with health care leaders throughout the world, we quickly realized that our work would not end with the publication. In fact, we feel that the conversation has only begun.

We determined to house our ongoing health care efforts within a think tank structure called Innosight Institute, which also covers other social / public sector issues that can be served by applying DI concepts. I never could have predicted this path that I am now on but am enjoying it thoroughly.

J: We are currently supported by grants from sponsors who are interested in expanding our DI work. This grant model has been more readily adopted by the folks working on the education side of Innosight Institute, but we are hopeful that our health care counterparts will catch on now that the book is out.

J: I never could have imagined how much work was involved in writing a book like this. The book actually took much longer than expected because we sought so much feedback from an incredibly wide variety of health care leaders. It was a difficult task to assimilate all the feedback, both pro and con, given the wide variety of perspectives, constraints, and challenges faced by various reviewers. However, this was also one of the most rewarding aspects of writing the book, as it really helped to reshape our thinking and constantly challenged us to refine our DI model. We really wanted to get it right.

Of interest, a few people have been overly focused on the title of this book. We obviously chose the title because we felt it had some shelf appeal and also to stay congruent with the Clay’s past books. We did not intend for the concept of prescription to mean prescriptive, or to assume that an understanding of DI unlocks all the answers. We do, however, feel very strongly that understanding the DI framework can be a useful predictor of what will work, particularly when based on our approach of looking at other industries who are “ahead” of health care in terms of some of the challenges they had to overcome as they sought to increase access, lower costs, and improve the quality of their products and services. The DI framework provides an excellent reference to understand those experiences while enabling us to predict with ever increasing accuracy the impact of potential reform proposals within health care.

J: Well, that’s an interesting way to phrase the question, because often I feel like a missionary sharing a message that doesn’t always resonate with people. Over the next 6-12 months we are really focused on getting the notion of DI’s potential contribution to the health care reform conversation squarely out into the public. We want the lay press, the health care press, and most importantly the thought leaders who will be influencing public policy and health care financing to consider how an understanding of the DI framework can contribute to predicting which solutions may provide the most viable options to impact these very complex challenges that face the health care industry.

We did receive feedback that our book did not provide enough detailed solutions. However, the purpose of the book was to help set a framework, develop a common language for discussion, and understand the catalysts or enablers that would allow policy makers to truly enact health care reform. Our focus has always been to understand the root cause of the problem, to understand what jobs need to be done, and how we move from modeling to implementation to scaling the innovation. We believe that spreading the DI framework can facilitate this, after which much smarter people can come up with much better solutions than we could ever have derived for the book.

S: So let’s dive in, what are some of the root causes that you establish in the book?

• Movement toward Precision Medicine
  • The introduction of new technology into health care has paradoxically introduced ever increasing costs. Most other industries have figured out how to achieve greater value in return for increased spending..
  • As more and more diseases become better understood, the person who can deliver care can change. Work can begin to shift from specialists to generalists to non-physicians and computer-aided algorithms, to self-diagnosis and -management. This movement toward precision medicine gradually obviates the need for specialization and centralization, also allowing for new venues of care with corresponding improvement in results.

• • Getting The Incentives Aligned is a critical success factor as individuals and organizations always return to their root incentives when care delivery challenges arise. When incentives are not aligned, we observe behaviors that only exacerbate friction and animosity when trying to deliver on the promise of disruptive innovation. We see most promise in incentive alignment through two types of organizations:

• • • Fixed Fee Integrated Provider this is well-documented from the Kaiser, Intermountain, and Geisingers of the world. One topic I am starting to research is how an independent hospital or insurer could turn into a successful, integrated health system.
    • Corporate Orchestrators are based on the observation that throughout business history, a company will choose to integrate into a critical activity out of necessity, even when it’s some part of its “core competence.” With health care, we have seen some forward-looking employers taking on an increasing role to ensure the health of their employees in order to reduce costs, stay competitive, and ultimately enhance the delivery of their core products/services.

J: I think the best examples, and ones that we highlight frequently, are the Cleveland Clinic and the Mayo Clinic. Essentially the leaders of these organizations have understood the Wickham Skinner’s notion of a “Factory within a Factory.” They allow these focused units, centers of excellence, to develop focused business models that leverage technology and intersecting areas of expertise in novel ways to deliver best outcomes. While they may be co-located within the larger organization, these business units have the necessary autonomy to operate apart from the mothership. These are great examples of organizations disrupting themselves.

J: Thanks for asking this, as I do want to clarify our perspective. In our evaluation of the medical home, we believe there is clearly a job-to-be-done that most patients require – “help me coordinate my care” – which is important in an increasingly fragmented health care system. But my criticism is mainly targeted at the assumption that this care coordination must be headed up by a physician. For some situations, this job could be fulfilled by a non-physician or even a software program. In other cases, the amount of information required to manage and coordinate care well goes far beyond the realm of a primary care provider. So while we see cases where a primary care coordinator is appropriate, we also see situations where this is overwhelming and counterproductive. The bottom line is that the medical home is simply a label for a “job” that we’ve identified for most patients. Those organizations who are able to deliver a solution that can address this job in a disruptive manner are best suited for long-term success.

J: Elliot Fisher, MD and the Dartmouth group have advanced this notion of a Care Accountability Organization or as you refer to it at Crossover Health – “Personal Health Advisory Services”. Essentially, these ideas represent what we are talking about in an independent, non-conflicted third party that has the scale, scope, perspective, and aligned incentives to deliver on the “help me coordinate my care” job. This job will become increasingly important as the DI theory indicates that health care will actually become even more fragmented over time.

As I mentioned earlier, most patients will need help to navigate the waters. But this guide could be a doctor, it could be a nurse, it could be a phone based consultation service, or it could be an online physician interaction. For those individuals who are already a part of an integrated fixed-fee organization, it will likely be the health care system itself that provides this service (Kaiser, Intermountain, Geisinger, etc), as they benefit from keeping their patients well. If you are not a part of such a system, coordination of care could come from an independent third party who helps make all the necessary care connections.

J: Concierge medicine has both good and bad attributes that make it interesting, but by itself it does not necessarily qualify as a DI. Concierge practices have not fundamentally changed the business model (remains conflated), and the desire to command premium pricing for higher levels of service is the very definition of a sustaining play. There’s nothing wrong with creating a successful sustaining model, but we have to realize that it does little to advance our mission to create a health care system that is affordable and accessible to everyone.

S:  How to do you view self proclaimed innovation competitions, like the upcoming Health X-Prize, as contributing to the accelerating potential disruptions?

J: Well I am a huge fan of the X-Prize and the multiplier effect possible through competition. It creates some interesting incentives, some public interest in rooting for the teams, and unusual non-monetary motivations for participants. It will be something that we will keep our eye on as this type of funding mechanism breaks free of some of the constraints of the typical sponsored investment in the constant search for innovative ideas.

S: Jason, I really appreciate your time and wish we could dive deeper. I will look forward to additional conversations with you and other leaders regarding how DI can and should impact our health care system.

I could have talked with Jason for hours regarding some of these ideas, and also all the interesting individuals he talked with and continues to talk with as part of his ongoing conversations with industry thought leaders. Keep an eye out for him in a city near you.