HL20: Clayton Christensen—The Innovator's Frustration

Edward Prewitt, for HealthLeaders Media , December 13, 2011

"Over time, we'll need fewer and fewer hospitals. Boards of those institutions need to just remember that the scope of what they need to do is to be responsible for the health of people, not the preservation of the institutions," Christensen says. "The hospital structure was put together at a time when doctors were cheap and travel was expensive. So you had a hospital in every community, and a hospital needed to offer everything, because of the constraint of travel and the abundance of doctors. But now those have flipped: doctors are very expensive, and travel is cheap. And yet we are continuing to behave as if we're bound by the same tradeoffs that existed a generation ago."

During the writing of The Innovator's Prescription, Christensen got an up-close-and-personal view into the healthcare system when he suffered a severe heart attack, followed soon after by a diagnosis of follicular lymphoma and an ischemic stroke, with a detached retina for good measure. These experiences "have intensified my desire to help the healthcare system reform itself," he says.

Christensen began writing about the details of healthcare reform and speaking at events where healthcare leaders gather. He espouses integrated systems of healthcare where the provider and insurer are the same entity, so that efforts to cut costs or improve performance work in tandem. Christensen points to a few integrated health systems as models for the rest: Geisinger Health System in Danville, PA, Intermountain Healthcare in Salt Lake City, and Kaiser Permanente in Oakland, CA.

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1 comments on "HL20: Clayton Christensen—The Innovator's Frustration"

John J Flavin (12/14/2011 at 8:36 PM)
Mr. Christensen is correct in his posit that the HC institutions and HC system have resisted change. The fundamental driver(s) of this resistance is either a deep rooted belief that HC providers were not to operate from a profit & loss model (e.g. manufacturing company with products) due to the human aspect of their client base or to maintain an intellectual/academic distance separating them from lowly profit and loss considerations. However, the consequences of a failure to intimately understand the sources of profit and cost within a healthcare provider institution nor system has resulted in the runaway costs which the entire industry and nation now try to contain. The lack of financial discipline and competitive forces found in the free market have enabled costs to rise sky high. Analytics are now providing insights to financial leadership within some institutions which serve to substantiate gut feelings or in a worse case illuminate financial realities to the surprise of doctors and administrators. When the "real financial picture" comes to light, the integration of centers of excellence (and the shuttering of those which cannot operate profitably) driven by the correct focus of providing the best care for a given condition will become the needed if not natural order of healthcare provision.




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