How Hospitals Innovate Incorrectly, According to Clayton Christensen

Clayton Christensen, the acclaimed professor, thinker, and author behind The Innovator’s Dilemma, knows well why healthcare needs to shake things up.

He capped off the Mayo Clinic Center for Innovation’s Transform meeting by teaching healthcare leaders how to better embrace and drive disruptive innovation across the industry.

When Christensen served on the board of directors for Brigham and Women’s Hospital, he said he once asked how they could both raise quality and lower costs. “The best insight that we could get was that we needed to pray and ask God for a miracle,” he joked.

Since then, he said, a better answer has become clear: disruption. Sustaining innovation continually improves hospital technology but does not make it cheaper. Disruptive innovation is needed to spread further and further out of the hospital, he said.

Disruptive innovations often “kill” incumbent businesses—like many of the elite hospitals at Transform, Christensen said.

“Our panelists just bewailed how difficult it is to change the institutions,” he added. “Somehow, we haven’t yet taught them that the way you have to do this is to create the new institutions, not simply change the old.”

The general hospital may not be able to be made cheap, but new clinics can be made better, he said.

Throughout Transform, many speakers highlighted the glut of specialists and lack of primary care physicians across the country. This could be countered, Christensen said, by driving sophisticated medical capabilities from the hospital to the clinic, and then to the doctor’s office, and eventually into the hands of nurses and pharmacists.

Eventually, he said, the ideal is to make the technology available to patients and their families in their own homes.

He pointed to the coronary stent, which was first used in the early 1970s. Prior to that, cardiovascular interventions came primarily in the form of expensive and complicated open-heart surgeries in the hospital. Although the early coronary stents were “crummy,” Christensen said, they made cardiac interventions more affordable and accessible.

With new perspectives and trial-and-error, they improved significantly over time, he said.

Christensen said health systems also spend too much time on accruing and championing resources.

“Most healthcare business models out there don’t focus on processes at all. What they focus on is that they have resources, they have equipment, they have people, they have IT management systems,” he said.

The few health systems that provide high-quality care at relatively low cost do so thanks to well-studied and tested processes, he said.