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Can Free Market Ideology Ever Work for Sick Care?


Sick care policy proponents seem to be divided into two basic camps: “the invisible-handers,” who believe that medicine is a consumer product like any other, and “heavy handers,” who believe that sick care is a right and rules and regulations should serve to provide all citizens with affordable sick care.

Sick care policy proponents seem to be divided into two basic camps: “the invisible-handers,” who believe that medicine is a consumer product like any other and that rules and regulations should serve to provide patient consumers with information to make consumer purchases and remove the intermediaries and obstacles between the doctor and their patients; and the “heavy handers,” who believe that sick care is a right and rules and regulations should serve to provide all citizens with affordable (if not "free") sick care. Then, there are the “invisible-heavy handers” who think the US sick care system should be some hybrid of the two.

Some argue that the free market ideology can never work for sick care, except in isolated circumstances for specific all cash based services like cosmetic surgery or other elective uncovered benefits.

No one knows for sure what a truly free market in health care would look like. This article has examined many of the probable changes in health care that could occur in the absence of perverse government intervention.

In the meantime, innovation continues to change the sick care ecosystem. Some of it is formal, as in rules and regulations, and most of it is informal, stemming from economic, social, technological and demographic drivers. Since rules create ecosystems that enable business models to deploy successful and sustainable innovation, the two are intertwined.

"Disruptive sick care" will be in the eyes of the beholder. Here's mine:

1. Disruption is a process.

Technologies and innovations evolve. In the case of sick care, there are significant cultural and structural barriers to adoption and penetration, so, it sometimes take an inordinately long time for an idea, invention or discovery to get to a patient. While many have suggested ways to accelerate the process, nature will take its course, and it does not like to be rushed. Community-based innovation initiatives are multiplying exponentially and will fill the funnel with ideas. However, the trickle down to the bottom happens faster from pull, not push.

2. Disrupters often build business models that are very different from those of incumbents.

Business models describe how a firm creates, develops, and harvests user-defined value. Sick care is one of the most highly regulated industries, so there are many things that can affect whether a given business model will work, either because of or despite the rules. Putting old wine in a new bottle won't create services and products that are cheaper, better, easier to use and more convenient to access. The goal of true disruptive innovation is to make existing business models not just better, but obsolete. The present clumsy and expensive HIT infrastructure and business model threatens to bankrupt at-risk hospitals, like rural hospitals and small-medium sized independent practitioners. When will we see an HIT McIntosh that is a whole product solution?

3. Some disruptive innovations succeed; some don’t.

There are many reasons why the dog won't eat the food. Maybe it's due to the wrong product-market mix. Maybe the FDA got in the way. How about too many features and not enough benefits? Or, more simply in the case of digital health, the product simply does not do what you promise it will do. Call it disruption or call it a banana, there are no guarantees in life or business, particularly when you are tackling the sick care Goliath.

4. The mantra “Disrupt or be disrupted” can misguide us.

You really don't have to throw out the baby with the bath water. After all, staying alive for most means paying most of your attention to the now instead of the new, and most sick care organizations have trouble enough with those priorities. The fact is that most change and innovation initiatives will fail. Wandering into the land of the unknown takes know-how and courage, something that is usually not rewarded when it comes bonus time.

Given political realities, for the foreseeable future, the odds are that tinkering and incremental process improvement will "trump" radical transformation, physician entrepreneurs will try to play on a field where the sidelines and goal posts are moved every quarter and the heavy handers in the blue jerseys will be battling the invisible handers in the red jerseys for many seasons.

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice