From the book Innovators’ Prescription: A Disruptive Solution for Health Care by Clayton Christensen, Jerome H. Grossman M.D., Jason Hwang M.D.

The problems facing the health-care industry actually aren’t unique. The products and services offered in nearly every industry, at their outset, are so complicated and expensive that only people with a lot of money can afford them, and only people with a lot of expertise can provide or use them. Only the wealthy had access to telephones, photography, air travel, and automobiles in the first decades of those industries. Only the rich could own diversified portfolios of stocks and bonds, and paid handsome fees to professionals who had the expertise to buy and sell those securities. Quality higher education was limited to the wealthy who could pay for it and the elite professors who could provide it. And more recently, mainframe computers were so expensive and complicated that only the largest corporations and universities could own them, and only highly trained experts could operate them. (We will come back to this last example, below.)

It’s the same with health care. Today, it’s very expensive to receive care from highly trained professionals. Without the largesse of well-heeled employers and governments that are willing to pay for much of it, most health care would be inaccessible to most of us.

At some point, however, these industries were transformed, making their products and services so much more affordable and accessible that a much larger population of people could purchase them, and people with less training could competently provide them and use them. We have termed this agent of transformation disruptive innovation. It consists of three elements

  • Technological enabler1. . Typically, sophisticated technology whose purpose is to simplify, it routinizes the solution to problems that previously required unstructured processes of intuitive experimentation to resolve.
  • Business model innovation.2. Can profitably deliver these simplified solutions to customers in ways that make them affordable and conveniently accessible.
  • Value network.3. A commercial infrastructure whose constituent companies have consistently disruptive, mutually reinforcing economic models.11

 

In the middle of these three enablers are a host of regulatory reforms and new industry standards that facilitate or lubricate interactions among the participants in the new disruptive industry.

To illustrate how these enablers of disruptive innovation can combine to transform a high-cost, expertise-intensive product into one that is much more affordable and simple, let’s briefly review how it transformed digital computing.Innovators prescription, 0071592091, 978-0071592086, Clayton M. Christensen, Jerome H. Grossman M.D., Jason Hwang M.D.