Funding Disruptive Innovation

“Innovation” is a provocative word.

For some, it invokes an eye-roll of disdain: “why can’t we just get our work done?” They pexels-photo-1038914.jpegrhetorically ask.  Sometimes, the way we are doing things is just fine.  Why distract ourselves with new variants of people, processes, or products just for the sake of doing something new?

These folks have a point.  Sometimes we just need to do what needs doing.

And sometimes the way we’ve been doing it (or even what we’ve been doing) isn’t optimal.  “There must be a better way” says … someone.

That someone is the innovator.  The eye-rolls?  The innovator is used to eye-rolls.  And much worse.  Indeed, the innovator has been maligned, undermined, threatened, disciplined, and even fired for thinking about the better way.

There’s a good reason for this.  Most innovations fail.  When innovators dream of a better way, and therefore spend time thinking, working on projects that may or may not bear fruit, “wasting” valuable time and money so that they can .. what?  “Improve things!?”

Such is the healthy tension, especially in the industry known as “health care.”  Lives are at stake, so we must innovate with extraordinary care, lest we harm people.  There is good reason for this.

Or is there?

When I was in medical school, I was “spoken to” because I asked questions of a professor who was teaching us tradition that was (even at the time) not supported by science.  Thirty years later, what he was teaching us is now well-known to be inappropriate.  The path to better care (and more health) is asking whether there is a better way:  questioning the assumption that “we’ve got it right” and always challenging ourselves to look at things from another perspective.

As CEO of Alliance for Better Health, I serve with an amazing team of people who are helping our community change.  We are a New York DSRIP Performing Provider System.  New York’s DSRIP program is an experiment.  The hypothesis is that we can reduce unnecessary spending on acute care if we focus instead on the health of our population.  Healthy people don’t need to go to the hospital.  I would argue that this needn’t be just a hypothesis, as the data is clear:  we can.  The harder question is whether we will.  I’m reminded (again) of the old joke that my dad (the psychiatrist) used to tell:  “how many psychiatrists does it take to change a light-bulb?  Only one, but it needs to want to change.

The gap between what we humans can do (what we are capable of) and what we do (what we choose to do) is wide.  We can exercise more, but we do not.  We can stop eating trans-fats or foods with nitrosamines (both of which are well established to enhance the likelihood of disease) but we do not. People addicted to chemicals (nicotine, opioids, alcohol) can stop, but they do not always do so.  Why don’t humans do what is objectively better for us?  We seem to have a reason to preserve the status quo.  Why?  Why do we reflexively resist the people (or ideas) that ask if there’s a better way?

“People change in many different ways and for a multitude of reasons.  The psychology of change is a broad and fascinating subject in its own right.  In one sense, in fact, psychology is the science of change.”    – William Miller & Stephen Rollnick in Motivational Interviewing Preparing People to Change Addictive Behavior. 

So if innovation is about change, we need to understand the barriers to change.  Only when change is embraced will the benefits of innovation be perceived to outweigh the risks.  Now let’s get back to DSRIP and innovation.

Last week, we announced our second innovation award program.  Last year, we awarded over $5.5 million to members of our community.

The purpose of the program this year is to nurture a culture of innovation in our region, with an emphasis on disruptive innovation.

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Why are we focused on disruptive innovations?  Take a look at the classic graphic that Clayton Christensen often uses to explain the theory.  Sustaining innovations improve existing products and processes, and improve the performance of existing markets.  Disruptive innovations create new markets.  They meet the needs of those who are not well served by the existing infrastructure, often because providing services to these folks is perceived by incumbents as low-margin and therefore not profitable.

Before you continue, please read this.  It’s important, and, yes, if you are applying for one of our innovation awards, there will be a test (your application) at the end of this.  As Christensen and team express, Disruptive Innovation is often invoked, but not always understood:

In our experience, too many people who speak of “disruption” have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use “disruptive innovation” to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.

The difference between sustaining innovation and disruptive innovation may seem arbitrary for us and our innovation award program, but I would argue that it is not. The funding for this program is a small portion of the > $30 million that we are distributing the the community to help care delivery organizations migrate away from fee-for-service business models.  Most of this money is supporting improvements to current processes, workflow, and technology.  These are therefore, by definition, sustaining innovations.

The $4 million is therefore set aside to explicitly support activities at the low end of the health / health care market.  For example, social determinants of health are often addressed by community-based organizations.  Literacy, health literacy, housing, transportation, violence prevention and behavioral health are all matters that have enormous impact on the health of a community and the primary care and acute care services that are used.  But these issues are low-margin (or have no near-term revenue model at all) and are therefore ignored for the most part by care delivery organizations (the incumbents).

Our goal is therefore to to provoke investment of time, strategic thinking, human resource allocation, and (most important) interest in meeting the needs of this “low end of the market.”  This is disruptive innovation.

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