THE AMERICAN FINANCIAL CRISIS by Clayton Christensen

"A good way to visualize how disruptive innovation has transformed an industry is if you think of the geography of an industry as a set of concentric circles . . .

How Can Disruptive Innovation Transform Healthcare?

The advent of sophisticated healthcare technology in the form of surgical suites and advanced imaging equipment and these high speed multichannel blood testing and analytical equipment has driven a centralization of the healthcare industry so we have to take the patients of the hospital, rather than bring the solution to the problem. Now, do you think hospitals will ever become cheap by competing against each other? No. They'll actually be come more expensive.

So what we need to do is drive the disruptive decentralization of the healthcare industry, and we do that by bringing technology to outpatient clinics, so you can begin doing there the simplest of the things that in the past required a hospital, and then keep driving that technology so that they can do more and more and more sophisticated things in that setting. And then we bring technology to doctors' offices, so that they can begin doing the simplest things that previously had to be referred to a more expensive outpatient clinic. And then drive that technology so that you can do in the doctor's office more and more of the things that required a higher cost clinic. And then use technology to drive care in the home.

And in a similar way, do you think that healthcare will become cost-effective if we just expect doctors to take pay cuts? That will never happen. But instead we need to bring technology to physicians assistants and nurse practitioners, so that they can begin doing the simplest of things that previously required a doctor, and then drive that technology so that they can do more and more and more of those things.

In other words, it's by enabling lower cost venues of care and lower cost caregivers to become more and more capable of doing more remarkable things. That's the mechanism by which healthcare becomes affordable, not by expecting the expensive ones to become cheap.”