Clayton M. Christensen used the phrase “disruptive technologies” in a series of writings beginning in 1995[1] to describe business models that are enabled by technologies to create disruptive impact, sometimes eliminating the industry that was “disrupted.” In fact, Christensen later used the term “disruptive innovation” because much of the disruption in modern business used existing technologies combined in new or different ways to create the disruption.

There are plenty of examples of new technology disrupting and destroying older businesses. The telegraph outran the Pony Express; transcontinental air travel steamed the luxury steamship industry AND the passenger train industry (at least in the U.S.); computers double-punched typewriters; compact disc (CD) technology outspun eight tracks and cassettes in consumer music; cellphones rung the compact camera industry’s bell; and email has all but eliminated the use of postal mail for routine business and social correspondence, while significantly lessening the use of telex[2] and faxing.  There are hundreds of other technological advances that have transformed or eliminated other businesses and technologies that we probably don’t even appreciate in our present-ism. Just think of our newer household appliances, which created the free time that American families used to help create entire industries in travel, hospitality, and the like. But, as an historian, I challenge you to look up fuller’s earth, an earthy substance that naphtha replaced in rapid-cycle commercial dry cleaning.[3] Accenture cites a statistic that 52 percent of the Fortune 500 companies that existed in 2000 have disappeared due to bankruptcy, merger, acquisition, or some other cause.[4]

However, the continual use of the term “disruption” in connection with modern technology, especially when applied to health care and related industries, has diluted the term into everyday jargon; so much so that the word “is often used out of context and lost its power.”[5]  I couldn’t agree more. Let’s look at some claims of “disruption” in health care making the rounds in the media.

Forbes contributor Reenita Das wrote about the “Top 8 Predictions that Will Disrupt Healthcare in 2020.”[6] Looking beyond the clickbait of the title to investigate what is billed as disruptive, you can see the article really just addresses trends. For example, there is a claim that 40 percent (less than half) of U.S. commercial payers and health systems combined will attempt to use social determinants of health in making some business decisions. In fact, most health systems already use “demographics (age, gender, race), environment, and socioeconomic factors” cited in the article to make decisions about which physicians to employ, where to deploy them, whether to expand collaborations or acquisitions, and the like. To avoid costly antitrust litigation, hospital systems may consider “poaching” specialist physicians or subspecialists to feed their existing hospital footprint versus acquiring a competing hospital. In the words of the former CFO of one of my clients, “If I have the doctors, I don’t need the hospital they used to send their patients to.” The expansion of cancer programs, gastroenterology endoscopy suites, and assisted living centers with Alzheimer’s or “memory care units” all point to health care businesses using available data on population aging and disease prevalence to build or expand key service areas. However, a less-than-majority adoption of these types of data in even some decisions cannot fairly be categorized as “disruptive.” Evolutionary, perhaps – but not revolutionary to the point of changing the fundamental nature of how health care is delivered.

Second, a recent article from ReferralMD[7] touts “9 Recent Medical Innovations Disrupting Healthcare.” The familiar technology buzz ideas surface here also: wearables that increase “wellness,” adoption of electronic health records, a supposed leap forward in telehealth, and blockchain. However, LASIK (a technology that has been around for decades and still is not reimbursed by hardly any insurance plans) also makes an appearance as “disruptive.”

• First, wearables in healthcare that only help well people monitor how well they are aren’t useful or disruptive; they feed the inherent narcissism of American consumers by allowing them to create data they can post to social media to “compete” with their similarly well friends or to create “likes” about sticking to fitness resolutions, etc. Wearables that help sick people get better are too expensive, and even their creators agree – they cannot succeed in a “direct to consumer” model with these devices.[8]
• Second, adoption of EHRs can help insurers and employers pay for less duplicative healthcare, and they can help people with complex diseases coordinate care among providers. However, the only thing EHRs consistently disrupt is the workflow of the providers using them.[9] Some authors believe that they are designed primarily to harvest clinical data for the financial betterment of the EHR companies themselves.[10] I have a client that was offered a “free” EHR system for its medical specialty – a system that was a catastrophic failure by all measures – and then was offered an ownership stake in that same system IN EXCHANGE FOR A 16-YEAR AGREEMENT FOR THE VENDOR TO HARVEST CLINICAL DATA.
• Third, telehealth has been around since the 1990s in the form of remote reading of diagnostic images. It’s grown to the use of “hub and spoke” systems for stroke care and similar clinical assistance between providers. This article, however, stands for the proposition that physicians will be able to “monitor and diagnose patients miles away – conversing with them about symptoms, and even being able to see medical concerns to make an informed decision on medication or operations without even being in the room or state for that matter.” In my estimation, this type of “direct to consumer” approach to telehealth will only be effective if a new patient can use his or her iThing to get a prescription for medications without having to physically see a physician. Otherwise, nurse call lines and other existing technology bridges between patients and physicians will continue to be prevalent.[11]

In a monumental longitudinal study by Henry Ford Health System, the use of telehealth clearly saved clinicians and patients time driving; it also saved physicians from wasting time doing non-revenue generating tasks. Additionally, it increased the remote monitoring of home-care patients (versus in-home monitoring by a trained person) by about 20 percent year-on-year. However, the number of revenue-generating patient visits from all types of telehealth encounters was not statistically significant and may have actually decreased.[12]

• Finally, the reference to a 1990s technology – LASIK – is interesting and seems to be more wishful thinking than outright disruption. Clearly (to me at least), the healthcare insurance industry is happy to pay for a large percentage of the cost of a new pair of glasses every year as a part of an insured’s benefit package (estimated at $200); however, it has no interest in curing the condition (at a cost of around $2,500 per eye).[13] The reason, of course, is that each insurer prices its plans as if there will be 100% turnover in its entire portfolio each year; therefore, it has no interest in paying for a lifetime program if it can pay instead for a Band-Aid. The real mystery is why self-insured employers don’t cover LASIK more often, as employee tenure data released by the Bureau of Labor Statistics in September 2018 shows that professional occupations in the private sector have a five-year median tenure, with over 23 percent of all workers being in the same job at least 10 years.[14] In many cases, using its own employee demographics to project lifetime costs might make an investment in LASIK worthwhile for the employer; however, these employers are probably within the 60 percent excluded from the adoption predictions of Ms. Das with which we began our discussion.

As you can see, the “hype curve” for healthcare “disruption” remains very steep. Improvements in the reliability and availability of healthcare technology have assisted health care providers greatly. The availability of government funding for more uses of technology has helped providers more quickly adopt this technology than we all thought possible. 

In many cases, it’s true that providers are using technology to connect with patients in new and better ways. However, real people seeing real providers for real diseases that require real hands-on treatments by other real people in real physical surroundings built for that purpose are still the norm, all of our eagerness to declare the old-world order of healthcare dead notwithstanding.

Now, get your flu shot and disrupt that disease process before it disrupts your winter.

Barry S. Herrin, JD, FAHIMA, FACHE, is the founder of Herrin Health Law, P.C., in Atlanta, Ga. Herrin offers more than 30 years of experience practicing law in the areas of healthcare and hospital law and policy, privacy law and health information management, among other healthcare-specific practice areas. He is a Fellow of the American College of Healthcare Executives and a Fellow of the American Health Information Management Association. He also holds a Certificate in Cyber Security from the Georgia Institute of Technology. Reach him at 404-459-2526 or barry.herrin@herrinhealthlaw.com. 

[1] Bower, J. L.; Christensen, C.M. (1995, January/February). Disruptive Technologies: Catching the Wave. Harvard Business Review.

[2] Direct customer-to-customer telegraphy, removing the need for a courier to bring the message (like you see in old movies).

[3] No, I’m not going to give you the easy way out. Do your own investigating.

[4] https://www.accenture.com/us-en/insight-healthcare-bigbang-disruption

[5] Forrest, C. (2014, May 1). Startup Jargon: 10 Terms To Stop Using. Retrieved from https://www.techrepublic.com/article/startup-jargon-10-terms-to-stop-using/

[6] Das, R. (2019, Dec. 4). Top 8 Predictions That Will Disrupt Healthcare in 2020. Retrieved from  https://www.forbes.com/sites/reenitadas/2019/12/04/top-8-predictions-that-will-disrupt-healthcare-in-2020/#2e4758da7f1e

[7] ReferralMD (2018, September). 9 Recent Medical Innovations Disrupting Healthcare. Retrieved from https://getreferralmd.com/2018/09/9-recent-medical-innovations-disrupting-healthcare/

[8] Herrin, B. (2018, December). What Amazon’s Health Care Model Won’t Look Like? Amazon. Retrieved from https://staging2.herrinhealthlaw.com/what-amazons-health-care-model-wont-look-like/

[9] Makoul, G.; Curry, R. H.; Tang, P.C. (2001, November/December). The Use of Electronic Medical Records: Communication Patterns in Outpatient Encounters. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC130071/ “Although there was no statistically significant difference between the EMR and control physicians in terms of mean time across all visits, a difference did emerge for initial visits: Initial visits with EMR physicians took an average of 37.5 percent longer than those with control physicians.”

[10] Green, H. (2018, July 17). Electronic Medical Records EMR’s Need a Window Sticker. Retrieved fromhttps://www.linkedin.com/pulse/electronic-medical-records-emrs-need-automobile-act-sheet-green-md/

[11]  Herrin, B. (2018, December). What Amazon’s Health Care Model Won’t Look Like? Amazon. Retrieved from https://staging2.herrinhealthlaw.com/what-amazons-health-care-model-wont-look-like/

[12] American Bar Association. 20th Annual Conference on Emerging Issues in Healthcare Law. (2019, March 13 to 16). Telemedicine’s Evolution: Hot Topics and Privacy Considerations. The study shows an unequivocal decrease in personnel costs associated with tasks that can be performed remotely.

[13] Segre, L. Duff, B. (updated 2019, October). How Much Does Lasik Cost? Retrieved from https://www.allaboutvision.com/visionsurgery/cost.htm

[14] U.S. Bureau of Labor Statistics. (2018, Sept. 20). Employee Tenure Summary. Retrieved from https://www.bls.gov/news.release/tenure.nr0.htm

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• Futurist who thinks she can make a world-changing impact on a disease by offering a highly tailored app to folks with that disease and/or physicians treating that disease.
• Venture capitalist who’d like to create some type of direct-to-consumer health care model that saves money to the supply chain.
• Physician who wants to do something with his phone to get around the hassle of hospital EMR implementation, or something else.

This has been going on a long time.

What has not been going on is anything close to what we’ve experienced in retail and consumer-facing sales on the Internet and through mobile devices. Scan a barcode and get 10% off grocery specials if you have your Amazon Prime membership and the code on your phone. Pay for Starbucks with an app. Take a picture of a label in Nordstrom, and the app will tell you if it’s available in different sizes in the store, a store near you, or to order and have it shipped to your door. None of these things let you order health care in a size and quantity that fits you when you want or need it, with direct delivery to you in two days free.

I read an advertisement for an event about what changes in the music industry can teach us about health care consumerism and new health care delivery models.

Takeaways just from reading the title:

• You can’t pirate health care and stream it live.
• You can’t download your favorite vaccine, and (other than the constant flogging of homeopathic nostrums and nutriceuticals) you can’t do health care yourself by watching a You Tube video.
• And, you can’t ask Alexa to diagnose you.[1]

So I really don’t know what spending a day in that room will do other than reinforce my skepticism that is manifest in this writing.

That analysis is probably a bit unfair. But I hope it shows that there’s a huge difference between telemedicine or a virtual health visit by some great phone-based application and a true direct-to-consumer health care model like Amazon for purchasing EVERYTHING. Keep in mind telemedicine actually is getting some attention and favorable reimbursement changes from state and federal governments. Also note that we’re not addressing the crazy quilt of provider licensing, which varies by state, and whether you can get a prescription for medications without an in-person visit and exam — that’s a blog all by itself. There still has to be a connection with a licensed caregiver and a record of care that meets whatever medical necessity test a third-party payor requires for the provider to get paid.

I say third-party payor in this context because nobody is going to pay for care or support they have been getting for free for years.[2] In February 2016, Chris Hogg of Propeller Health[3] and Rick Altinger of Glooko[4] were interviewed on this problem. According to Altinger, “I really don’t encourage, here in the U.S., anyone to try to build a big business direct to consumer in the chronic disease management arena,” he said. “The road is paved with dead digital health companies trying to get people to pay for things they’re used to other people paying for,” said Hogg.

Even in the chronic health management segment of the health care industry, the smart app or app/device pairing developers focus on what non-patients pay for the care of patients. These developers also try to find ways to bend the cost curve to those non-patients (who, by the way, are being asked to pay for these innovations) by helping people get less in-person care. So, it’s really not a direct-to-consumer model at all: it’s a business-to-business-to-consumer model where the intermediate business has the financial risk of the consumer’s spending. Definitely not Amazon’s retail model.

This dilemma is pointed out most clearly in the talk about population health management and how shared savings can be divided between payors and providers when improving health care outcomes. A glance at the data collected on Medicare Shared Savings Program accountable care organizations (ACOs)[5] shows that care is actually more expensive for Medicare patients for the first two years following the creation of the ACO, with real savings occurring only in year four. Virtually all of the entire program’s savings are due to this fourth year of operation by ACOs who choose to stay in the program at least this length of time. This would also explain why self-insured employer groups have been slow to get on the ACO or shared-savings bandwagon, as the traditional ACO solution doesn’t actually save the payor any money in the short term.

So, what does this have to do with Amazon? Well, from the media accounts,[6] it appears that Amazon and its partners are just doing what other big employer groups are capable of doing: planning to put their employees into a health plan that leverages the size and spending power of the employers to lower costs and therefore save money. That plan could be a health maintenance organization (HMO) that employs or owns providers, thereby capping costs and requiring employees to use controlled clinics or resources for primary health care or acute hospitalization episodes. Such a provider could use Amazon’s cloud technology in partnership with a major electronic medical record (EMR) vendor to create an interoperable record that could be shared between providers and patients, perhaps utilizing some of the tools we’ve already talked about “at no cost to the patient” to lower acute episodes and further drive down costs.

The legal framework within which Amazon and its partners will innovate is basically unchanged from 15 years ago[7]. Only now, there is more focus on the problem and potential solutions due to the steadily rising cost of care and the intrusion of phone-based technology into every aspect of our daily lives. App developers and venture capitalists think there’s got to be a way to harness these addictive phone impulses with purchases in an industry that commands 18% of the gross domestic product and 40% of every federally appropriated dollar. However, if the best you can do is an Apple Watch that can act as an early warning for heart events[8] or a scale that Bluetooths to your phone so you don’t have to actually look down to see how much you weigh, you’re not there yet.

Propeller and Glooko are on the right track, as are apps that basically condense full-blown computer-based health platforms to an app-enabled screenfront.[9] But real health care is still going to be delivered by real professionals looking at real history and physical data and having real encounters with real patients even if they do it from across the country or across the globe. And, it’s going to be paid for by employers or governments or insurers or patients, just as it is today.

My prediction? Follow-up care and care management are ripe for this kind of innovation, especially in chronic disease management, as is primary care for minor events between providers and patients with already-established relationships. But don’t expect your phone to schedule an appointment with a doctor who’s going to phone in that next dose of OxyContin or to replace a diagnostic colonoscopy any time soon. Any app developer that promises that kind of response will be getting a call from a state medical board or the Food and Drug Administration before you can finish reading the app’s terms of service. Oh, yeah, like ANYone reads those things.

Barry S. Herrin, JD, FAHIMA, FACHE, is the founder of Herrin Health Law, P.C., in Atlanta, Ga. Herrin offers more than 30 years of experience practicing law in the areas of healthcare and hospital law and policy, privacy law and health information management, among other healthcare-specific practice areas. He is a Fellow of the American College of Healthcare Executives and a Fellow of the American Health Information Management Association. He also holds a Certificate in Cyber Security from the Georgia Institute of Technology. Reach him at 404-459-2526 or barry.herrin@herrinhealthlaw.com.

Comment and Citations

[1] Or Google, for that matter. Taking a picture of that suspicious spot on your butt and asking Google if it’s cancer is not real. It’s not even real if you send it to your dermatologist golfing buddy, as he’s only going to tell you to make an appointment so he — not your phone — can cut it off and take a biopsy.

[2] vator.tv/news/2016-02-29-why-direct-to-consumer-models-are-hard-in-healthcare

[3] Propeller is a health management tool for people using inhalers and is regulated as a Class 1 medical device. The Propeller website does not discuss the price of the device if it is not included with the inhaler, instead suggesting that the cost may be covered through a sponsor. support.propellerhealth.com/hc/en-us/articles/115002051666-How-do-I-get-Propeller

[4] Glooko is an application-device pair that syncs with a patient’s blood glucose meter, insulin pump, and other devices and captures data regarding the patient’s diabetes management. Unlike Propeller, it is not marketed to transmit data to providers; rather, it helps payors lower diabetes-related costs and, therefore, attempts to have the employer plan or insurer pay for its deployment.

[5] avalere.com/expertise/providers/insights/medicare-accountable-care-organizations-generate-savings-as-experience-grow

[6] www.cnbc.com/2018/03/27/amazons-moves-into-health-what-we-know.html

[7] None of this is new. In 2004, I co-authored a paper that discussed improvements in patient care quality as a way to enhance provider reimbursement and lower costs, all in the self-insured space and with year one results. AHLA Health Lawyers News, February 2004, “Pay for Performance: The Case for Quality as an Integrating and Incentivizing Factor.”

[8] www.popsci.com/apple-watch-medical-device

[9] ehrintelligence.com/news/why-are-mobile-apps-lacking-for-hospitals-inpatient-care

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