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Monday, 30th March 2015

Disruptive Entrepreneurship is Transforming U.S. Health Care

Source: Brookings Institution

From the Introduction:

Health care accounts for more than a sixth of the U.S. economy; yet of all U.S. economic sectors, with the possible exception of education, it has been the most impervious to disruptive innovation, especially of the sort that improves productivity and value. Jonathan Bush’s witticism cuts close to the bone: “The industries we care about least innovate at the highest speeds, while those we hold dearest to our heart innovate hardly at all.” To be sure, the sector has shown impressive medical innovation, but its cost-no-object, value-no-concern approach to pharmaceuticals, procedures, and devices has been part of the sector’s debilitating cost-spiral problem, not part of the solution. Innovation to improve efficiency and deliver more bang for the buck has been scarce, and more often has been punished than rewarded when it did occur...

Economists and other experts debate why, in the past few years, health care inflation has abruptly and significantly moderated. The soft economy has no doubt been a factor. This paper, however, adds weight to a significant body of evidence suggesting that longer-lasting structural changes are also at work: in particular, changes in economic incentives, which put a premium on maximizing value and health rather than cost and treatment, have given rise to an entrepreneurial, value-maximizing ecosystem. Supporting this ecosystem are four developments: first, changes in public and private payment structures that reward value; second, rapid improvements in information technology and data availability; third, an influx of creative value-seeking entrepreneurship, often led by insurgents from outside the traditional health care sector; fourth, an investor infrastructure that is eager to bankroll value-seeking startups. In short, health care is beginning to taste the disruptive culture of Silicon Valley, retailing, and many other American sectors.

+ Direct link to document (PDF; 460 KB)



Having begun his career in academic libraries, Adrian Janes has subsequently worked extensively in public libraries, chiefly in enquiry work as an Information Services librarian. In this role he has had particular responsibility for information from both the UK Government and the European Union. He wrote a detailed report on sources for the latter which was published by FreePint in 2007, and has contributed articles to FreePint and ResourceShelf. He is involved in training in information literacy and the use of online reference resources.

A Contributing Editor to DocuTicker, he also write reviews for Pennyblackmusic.

More articles by Adrian Janes »

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