Economics, Health Care, Pethokoukis

How disruptive innovation can slowly fix US health care — if government lets it

Image Credit: Shutterstock

Image Credit: Shutterstock

I’m a big, big fan of the book The Innovator’s Prescription: A Disruptive Solution for Health Care by Clayton Christensen, Jerome Grossman, and Jason Hwang. As such, I am always on the lookout for manifestations of  “disruptive innovation” in the health care sector. Like what, exactly? Well, in a WSJ op-ed yesterday, Christensen focuses on two in particular:

– Going beyond current licensing, consider changing many anticompetitive regulations and licensure statutes that practitioners have used to protect their guilds. An example can be found in states like California that have revised statutes to enable highly trained nurses to substitute for anesthesiologists to administer anesthesia for some types of procedures.

– Make fuller use of technology to enable more scalable and customized ways to manage patient populations. These include home care with patient self-monitoring of blood pressure and other indexes, and far more widespread use of “telehealth,” where, for example, photos of a skin condition could be uploaded to a physician. Some leading U.S. hospitals have created such outreach tools that let them deliver care to Europe. Yet they can’t offer this same benefit in adjacent states because of U.S. regulation.

Shorter: We need to get more productivity out of human capital through deregulation and technology — especially with the ACA increasing demand for medical services. So two news items today on those fronts. First, a Kaiser Health News story on the use of self-service computer kiosks at Wal-Mart where people can check and track their eyesight, weight, and blood pressure while ads run on a video screen. Pretty basic stuff, but the company behind the kiosks has big plans, as do competitors:

But SoloHealth’s backers do have larger plans. The Duluth, Ga.-based company aims to expand its kiosk offerings to teach people how to quit smoking, test whether they are at risk for diabetes and even enroll them in health coverage. Self-serve computer stations are also eyed as a way to help consumers figure out whether they need medications for conditions such as high cholesterol, under a proposal now before the FDA to make some prescription medications over the counter … The proposal is still under review. Rival firms are marketing similar technologies. Dublin-Ohio based HealthSpot has enclosed cubicles that allow patients to pay $59 to $79 for a video “visit” with a doctor. NowClinic online, a subsidiary of UnitedHealth Group, provides 10-minute video chats with physicians for $45.

Second, another KHN piece explores letting nurses do more of what doctors do: Diagnosing and treating patients, as well as prescribing medications — all without a doctor’s involvement. Here is David Herbert of American Association of Nurse Practitioners:

Well, the problem is that there are certain states that require physicians’ supervision of nurse practitioners or there may well be some kind of restrictive collaborative agreement that is imposed upon the nurse practitioner. Often times, that makes it very difficult for nurse practitioners to practice. Sometimes there may be a physician who is unwilling to supervise. Other times you may have an issue where the physician chooses to not form a collaborative agreement with nurse practitioners. So, part of the issue is that we have anticompetitive regulations in place.

There are a number of things that we want to do at the federal level. We are hopeful that legislation is going to be reintroduced this Congress that will allow nurse practitioners in Medicare to admit patients for home health care. Right now, the admission can only be done by a physician. Given the fact that we’ve had research indicating that it would be cost effective, we can get people out of nursing homes and hospitals quicker. It really makes good public policy sense. Particularly, if you got a situation in a rural area where the nurse practitioner and the patient is waiting for the physician to sign the order to admit into home health.

Same thing is true on hospice. We’ve not been able to get legislation passed that allows nurse practitioners to admit to hospice. We’re not currently permitted by statute to form accountable care organizations on our own. That opens up a lot of possibilities for safe and effective, cost effective health care.

Both stories highlight areas where established players will do their best to prevent the entry of new competitors. Policymakers wishing to pursue pro-market approaches to health care reform, please pay attention.

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