Along with my clinical practice, I spend a lot of time reviewing companies developing innovative solutions. With the transition to value-based care, American medicine sorely needs new tools. Innovators and investors are constantly looking for the next new thing, the “Uber of medicine.”  However, after almost a decade, I’ve lost faith there’s an app for that in healthcare, at least one that will go viral. 

So, what is it about healthcare that creates such barriers to innovation? The short answer is that the business models, requiring both a sense of humanity and profit, are unique. For example, in no other industry is consumers’ ability to pay so disconnected from their opportunity to consume. When you’re sick and show up at an emergency room, the hospital has to take care of you. Moreover, few other industries produce “negative goods,” things the consumer generally needs but doesn’t want. The very act of going to the doctor or taking a pill is in some sense an admission of imperfection, of our own mortality; having to pay for it only throws salt into the wound.  

Viral adoption requires a tipping point, a process where people are so enamored with the product that they can’t wait to tell their friends. I’ve yet to see this product in healthcare. More often, there is some level of resentment for goods and services (pills, surgery, rehab, etc.) that solve a imageshealthcare problem.

That’s not to say there is not a path (and profit) for healthcare innovation. The current transition from fee-for-service to value-based care presents one of the greatest opportunities of the last few decades. However, effective change should focus on the impact on people and process first, and only then consider the bright and shiny enabling technology. More often than not, I’ve seen the converse—adequate consideration of the problem but an incomplete analysis of how the innovation will impact the people and process, ultimately leading to limited adoption. Further, hospitals and payers, often the ultimate customers for new innovation, have become less focused on features and incremental improvements, and have turned their attention to outcomes-based opportunities.

For me, a business plan calling for rapid adoption of a new healthcare product or service goes into my circular file. Medical innovation requires patience. Although there are tipping points in medicine, talk of viral adoption should be reserved for viruses, not transformation. The good news, however, is that once accepted, the innovation can expect a relatively long run. The same barriers to entry become a wall for competition.