Business disruption, Christensen’s classic observation of disruptive technologies leveraged by market entrants attacking mainstream industry incumbents, has generally failed in health care. There are several reasons why innovative businesses harnessing modern technologies have found health care a difficult nut to crack. The most likely reason is that the misaligned incentives caused by third-party reimbursement discourage consumers from choosing new, lower-cost alternatives.
However, there are additional explanations. Sometimes the arcane, fragmented nature of health care proves to be a poor fit for technologies successfully implemented in other businesses. In other cases—think electronic health records—a lack of common data standards allows proprietary data formats to cause customer lock-in.
But, what is the impact of health care regulation? Beyond the traditional trope that regulation stifles innovation, how does health care regulation impact disruption? Recent developments in the markets for hearing aids suggest some answers and even a possible regulatory approach to the broader and burgeoning category of mobile health apps and wearables.…
Read the full post at the Health Affairs Blog!