The Innovator's Prescription: A Disruptive Solution for Health Care

by Clayton M. Christensen, Jerome H. Grossman M.D., Jason Hwang M.D.

A groundbreaking prescription for health care reform--from a legendary leader in innovation . . . Our health care system is in critical condition. Each year, fewer Americans can afford it, fewer businesses can provide it, and fewer government programs can promise it for future generations. We need a cure, and we need it now. Harvard Business School’s Clayton M. Christensen―whose bestselling The Innovator’s Dilemma revolutionized the business world―presents The Innovator’s Prescription , a comprehensive analysis of the strategies that will improve health care and make it affordable. Christensen applies the principles of disruptive innovation to the broken health care system with two pioneers in the field―Dr. Jerome Grossman and Dr. Jason Hwang. Together, they examine a range of symptoms and offer proven solutions. YOU’LL DISCOVER HOW

Genres: Health Care, Business, Nonfiction, Health, Medicine, Leadership, Medical

496 pages, Hardcover

First published October 10, 2008

About the author

Clayton Magleby Christensen was an American academic and business consultant who developed the theory of "disruptive innovation", which has been called the most influential business idea of the early 21st century. Christensen introduced "disruption" in his 1997 book The Innovator's Dilemma, and it led The Economist to term him "the most influential management thinker of his time." He served as the Kim B. Clark Professor of Business Administration at the Harvard Business School (HBS), and was also a leader and writer in the Church of Jesus Christ of Latter-day Saints (LDS Church). He was one of the founders of the Jobs to Be Done development methodology.
Christensen was also a co-founder of Rose Park Advisors, a venture capital firm, and Innosight, a management consulting and investment firm specializing in innovation.

Reviews

[Shavior · Rating 5 out of 5]

Perhaps it’s because I do strategy for a living, or perhaps it’s because I am a complete novice on healthcare, but I enjoyed Innovator’s Prescription better than any nonfiction book I’ve read in a very long time. Christensen and his colleagues do a superb job telling a complex story about a complex industry in a crisp and compelling way. Whether or not you agree with their predictions – and some of them you have no choice but to agree with, because less than a decade after publication, they’re happening – you can’t finish this book without a better understanding of the fundamental forces that make healthcare work (or fail). It is an impressive mix of general context, case studies and an overarching zeal for change. A must read if you care about the subject.

[Annie · Rating 5 out of 5]

This book is very well-researched and clearly written. It was a breath of fresh air in a health care debate that often talks in abstractions and provides little solutions, or ones that re-establish the same problems and call them by a different name. I agree fully with a lot of what Christensen says about allowing disruptive technologies into the health care space, and how they can help our system. He makes solid points about the 3 different business models in health care that are currently being forced to co-exist within one broken system. However, I do not agree with his assertions that employers (and essentially Big Business) should take over the job of creating integrated fixed fee systems (though I do agree that these seem to be the best course). He even goes as far as to say that one they establish these systems, the businesses should start running their own medical schools. I agree that our hospital systems and medical school are painfully antiquated and struggling, but the answer is not to cut them completely out of the equation if we care at all about preserving the public service mission of medicine. I also thought that the author ignored the big question that came up for me, which was physician job satisfaction. He talks about models of care that sound, frankly, incredibly tedious and unimaginative to practice in, which was surprisingly unaddressed considering he is an MD.

As a family physician-in-training, this book provided me with an outline of how to break apart the primary care system into profitable chunks that are easier for patients to access and more manageable for physicians. It also gave me the motivation to try to follow some of these recommendations before our healthcare system is taken over completely by corporate America.

[Alec Myres · Rating 5 out of 5]

I found this book to be the single most enlightening piece on healthcare (economics/business/reform/strategy/etc.) I have come across. I highly recommend it, and I am quite surprised at how clear the many proposed ideas are and how I have heard little or nothing about most of them in the ongoing national debate on healthcare. Coherent business models have brought better and more affordable products and solutions to our lives in countless other fields, and Christensen deftly explains why healthcare should be no different.

[Scott Wozniak · Rating 5 out of 5]

This is a great book on the challenges and some potential solutions with the healthcare system in America. If you're a leader in healthcare I recommend this highly. But this is also one of the best books on business, systems, and competition I've ever read.

Warning: It's pretty technical, so if you don't know much about healthcare or aren't up for dense paragraphs, packed with both details and big ideas, then you won't enjoy this. This is not a fable or journalistic tour of an industry, full of heartwarming stories but lacking in punch. This is a master strategy document.

[Allara · Rating 5 out of 5]

I'm amazed that a book on healthcare first published in 2008 still seems so relevant in 2023, but maybe I shouldn't be so surprised given the pace of change in the industry. The business and strategy perspective that Christensen and his coauthors bring to healthcare makes a lot of sense, and gave me the language to describe what I've seen happening in the field. This should be required reading for anyone in the business or practice of healthcare.

[Tum Kanapon · Rating 5 out of 5]

Disruption is not different in any industry.

Clayton apply disruptive theory in healthcare sector.

3 major force, that we need to consider
1.technology
2.business model
3.value network

I would recommend Entrepreneur in health sector, Goverment people or politicians to read this book. So we can create health care not sick care for people.

[Allison Foster · Rating 1 out of 5]

i just vehemently disagreed with the basic premise of this book — that healthcare will work if we run it more like Toyota or HP or a consulting firm

[Marks54 · Rating 4 out of 5]

I will give this four stars ... but I am probably a bit high with that and Goodreads does not encourage or permit fractional ratings. The book is topical and sharply written, but it is also a bit odd, in that it is both too long, with lots of repetition, rehash, and digression, while at the same time being too short, in that many of the key caveats and limitations to what is presented are not spelled out.

You hear Christensen’s name bandied out a lot, to the point where you would expect there to be a trademark associated with using the phrase “disruptive innovation”. What does that mean? If you get to that question, you have reached a critical question to ask about this iteration of Christensen’s disruption sage in general and this version of it in particular.

The general idea is fairly straightforward and even a bit alluring. Innovation comes to established industries in at least two ways: sustaining innovation and disruptive innovation. Sustaining innovation is what happens to reinforce and improve the existing ways of doing business iu the industry — better machines and techniques that help us do what we have already been doing but better than before. Disruptive innovation provides a qualitatively different way of getting key tasks and jobs done that have the promise of lower costs and high quality. When these show up initially, they are embodied in simple applications but are likely inferior to the dominant approaches in an industry. As a result, firms in an industry fail to adopt and advocates of the disruption go elsewhere and gain valuable experience in the innovation. The rejected disruption comes back at higher volume and quality and then dominates the industry, but the purveyors of established practices out in the cold when they prove unable to adapt. Disruption leads to progress and the key is for industry incumbents to embrace disruption, even at the cost of potentially cannibalizing one’s current business. This was sort of the argument that Christensen used for disk drives and backhoes in his first book on this - the Innovator’s Dilemma. And the rest, so they say, is history!

So, how does this play out for health care? Are hospital and physician services akin to the work of personal computers or digging machines? Hmmm... Yes, sort of, but the argument morphs a bit when the move to health care is made, I think.

The idea for health care is that of a complex business with at least three different types of business models. The first in Intuitive Medicine, which is characterized by the expert work of highly trained physicians and their staff in diagnosing serious medical problems in patients and then crafting, through trial and error, the best responses for the patient. This is expert intensive, uncertain in outcomes, time consuming, and very expensive via fee for service billing. The second type of business embedded in health care is Empirical Medicine in which, once a diagnosis has been standardized regarding a health ailment, value can be added through a fairly standardized set of processes that are generally successful in addressing a patient’s problem. Newborn deliveries, cardiac catheterization processes, and hip replacement would be examples of such processes. They still require expert can but have sufficient volumes that they can be managed and have their outcomes assessed. The third type of medicine is embodied in expert networks that enable patients to managing continuing chronic conditions through combinations of medication, behavioral treatments, and periodic consultations with physicians, nurse practitioners, or other health professional.

The point of this book is to argue that the way to improve health care and health care patient outcomes is through innovations that move as much of the health care business as possible and necessary away from fee for service intuitive care in “solution shop” hospitals - unless of course you really need that - and into well understood value added processes and extended networks.

The book is long and detailed. Christensen and his co-authors explain the arguments in some depth and frequently repeat them - in case you are unable to look back in the book or did not get it the first time around. There are lots of examples and numerous imposing charts and graphs. The tone of the book is very upbeat and encouraging — the future is here, we should all get ready!

What is not to like? Well, Christensen tells a mean story, but most of the points in the book could easily have been made without reference to Christensen’s theory, such as it may be. I do not really need him to tell me that a lot has changed in the practice of health care over the past twenty five years. I already knew that the industry had changed a lot, had been shaken up, — oh yes had been disruptied. If a reader is not familiar with the industry, then the book is informative and potentially even helpful.

But what about the theory? To start with, it changes with each iteration. There are different nuances to different types of innovation, disruptive or otherwise. If it is a theory rather than a story, it would have helped for there to be predictions and there are not that many of those that I could find. More to the point, Christensen himself has written more recently about how his expectations for disruptions in health care have not come about as he expected. Progress towards the innovations he has focused on has been slower than first expected. We still have to go to hospitals. Mass consumer clinics through your local drug store chain or Wal-Mart have not developed as planned, although there has been some progress. Very few works like this are completely off base, and Christensen has a lot to say that is worth considering.

What troubles me more is what is not emphasized. There are lots of problems in health care that do not boil down to a need for disruptive innovation. For example, in many areas there is rampant over-pricing, in which providers make use of their local market power and the unequal distributions to charges high multiples for products and services. That is not innovation as much as it is the workings of capitalism in some very imperfect market situations. Some recent books by Marty Makary bring this out in considerable detail. More generally, it seems clear that many decision makers in health care do not wish to innovate but rather like their market positions.

Overall, if you give Christensen the full benefit of the doubt here, his approach is more of a bottom up approach in which local actors and innovator/entrepreneurs can by their choice change the health care business. At the same time, however, he often notes how unless the overall context of the health care system is changed, it will not be possible for innovators to really change that much. So where will the impetus for system change come from? I do not believe it will bubble up from below but it is not clear who in government, business, or the medical establishment will lead the charge for change. The book focuses on large employers as a potential source of change but even in the book, the long term potential for this is limited.

So ... it sounds like a good idea and the story rings true in some circumstances, but it “you cannot get there from here” then what conclusions are we to draw about the argument? It is a good story that sells a lot of books and executive education classes at the Harvard Business School, but what does it really mean for practice? If the overall solution is not feasible, that is not a good recommendation.

Stylistically, this book reads like a collection of chapters and presentations that have been knitted together into a book. That is the only way I can make sense out of the extensive repetition of arguments that occurs throughout the book. It makes a long book even longer. Some of the digressions are also not helpful. The argument is frequently made that health care is analogous to some other industry. I do not find such analogical reasoning helpful. Perhaps there are some overall similarities, but industries as discussed in this book are extraordinarily complex in their details and none of the surface comparisons in the book was particularly informative or helpful.

[Harry Harman]

In 1970 the cost of health care in the United States accounted for approximately 7 percent of gross domestic product. In 2007 it accounted for 16 percent of America's GDP.

The growth in health-care spending in the United States regularly outpaces the growth of the overall economy. Over the last 35 years, while the nation's spending on all goods and services has risen at an average annual rate of 7.2 percent, the amount spent on health care has grown at a rate of 9.8 percent.

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 x5 de could operate them. It's the same with health care.

Our bodies have a limited vocabulary to draw upon when they need to express that something is wrong. The vocabulary is comprised of physical symptoms, and there aren't nearly enough symptoms to go around for all of the diseases that exist—so diseases essentially have to share symptoms. When a disease is only diagnosed by physical symptoms, therefore, a rulesbased therapy for that diagnosis is typically impossible

The technological enablers of disruption in health care are those that provide the ability to precisely diagnose by the cause of a patient's condition, rather than by physical symptom. These technologies include molecular diagnostics, diagnostic imaging technology, and ubiquitous telecommunication.

cost is spent in overhead activities, rather than in direct patient care.

VAP businesses typically charge their customers for the output of their processes, whereas solution shops must bill for the cost of their inputs.

"hot swapping,"

Most doctors' offices are set up as independent businesses. Each can improve its piece of the system, but that's all. When there are interdependencies among the elements of the disruptive value network—meaning that one cannot occur unless others do —the speed of disruption is significantly accelerated if an integrated entity wraps its arms around all the elements in order to orchestrate the changes.

As an illustration, when color television was invented, nobody would buy color TVs because no network was broadcasting in color. And networks would not broadcast in color because nobody owned color televisions. It took David Sarnoff—whose company, RCA, acquired NBC—to implement color television in that chicken-and-egg situation. Similarly, health-care systems will need to integrate so they can wrap their arms around all the pieces of the system that must be interdependently reconfigured.

most importantly, do not operate on a fee-for-service basis. Rather, they charge their members a fixed annual fee to provide all the care they will need. These organizations—of which there are a few, such as Kaiser Permanente —are structured to profit from members' wellness, rather than their sickness. Their structure gives them the incentive to create and direct patients to lower-cost business models.

Where providers do not create an integrated fixed-fee system to oversee this systemic overhaul, we can expect more and more major employers to integrate backward and begin providing the primary level of health care for their employees.

Because people will predictably do more of what is profitable and less of what isn't, the system of reimbursement in the United States constitutes one of the most powerful and pervasive schemes of macro- and microlevel regulation that humanity has ever devised.

Health insurance emerged in the 1920s—alongside fire, life, disability, and auto insurance—as a self-purchased product to protect against the unlikely possibility of a disastrously expensive health problem. After legislation in 1943 made health benefits a tax-free form of compensation, employers increasingly used health insurance as a tool for attracting and retaining the best possible employees. health coverage is a key weapon required to win the war for talent.

the transition from medical records based on pen and paper to ones that are portable, easily accessible, and interoperable will not just substantially reduce the costly paperwork that burdens today's caregivers.

Web sites like dLife.com and Crohns.org enable patients to teach each other how to live with their diseases. Professional networks enable physicians to share insights from patient case studies with each other, without enduring the cumbersome rules and delays entailed in conventional academic publishing.

No medical school that we know of has yet established a course in which students can learn how to design self-improving processes that prevent mistakes from occurring.

we have a chronic shortage of nurses in the United States too—which again is filled primarily by immigrant nurses trained in places like the Philippines.

Encourage competition that will reduce prices.

In fields in which breakthroughs are needed, research at the intersection of scientific disciplines, and not just research that deepens knowledge within disciplines

guarantee best-in-market prices from their suppliers through a system of price ceilings and rebates.

Almost every industry began with services and products that were so complicated and expensive to provide and consume that only people with a lot of skill and a lot of money could participate.

Most disruptions have three enablers: a simplifying technology, a business model innovation, and a disruptive value network.

[Tim · Rating 4 out of 5]

Interesting and thought-provoking book. The authors provide a lot of great insights about the world of healthcare from the point of view of disruptive innovation. I don't share their optimism that high-deductible health plans will solve many of our problems (due to the fact that the people spending most of America's health care dollars will always exceed their deductible and thus face a zero price) but I do think their focus on integrated providers like Kaiser is appropriate. I was also quite delighted to find an implicit endorsement of the mandate found in the Massachusetts health reform and the PPACA.

[Shezaad · Rating 4 out of 5]

Thoroughly enjoyed reading this book, and it has aged well since its publication in 2009 (writing this review 10 years later, in 2019). Some of the terminology should be updated (and they should address ACOs).

A few notes:

1. "Jobs to be done" framework here works really well in the context of healthcare. Why does the patient hire a doctor? What are they trying to accomplish?
2. Hospitals haven't aged well - they were originally set up for acute care. People were dying because of diseases that did not have a cure or a way to manage (whooping cough, for example). However, advances in technology has reduced mortality rates, and as a result, patients seek chronic care. Hospitals aren't set up to provide that care in a sustainable way, and bill patients in an acute-care setting. They make money when people are sick; not for sustaining health.
3. A lot of the problems with hospitals today come from a mismatch between business model and reimbursement. He claims there are two types of hospitals: Value added hospitals and solution shops. From a jobs to be done perspective: value added hospitals apply when the patient knows what's wrong with them and needs a solution (knee and hip replacements, for example). Solution shops are hired when the patient doesn't know what's wrong with them. Diagnostic centers are the best analogy. The norm is that these two types of hospitals co-exist, and the staffing and org structure and reimbursement practices are typically structured around solution shops. There are isolated departments of doctors by specialty who bill in a fee-for-service way and there's little coordination between them and others. It's really tough to operate efficiently and cohesively with two separate operating principles.
4. This leads into better reimbursement practices. Value based care is best for value added hospitals, where coordination between teams is essential.
5. Chronic care accounts for 75% of costs right now - that's where we should be focused in bending the cost curve.

Christenson et. al. present a good conceptual framework for aligning patient needs with actual services being offered. The healthcare system is starting to move in this direction - especially post ACA and ACO rollout - but there's clearly a ton of work that needs to be done.

[Stan · Rating 3 out of 5]

It took a bit for me to really get into this book--not sure why. But eventually, it started really clicking for me.

The best thing for me was that I learned so much about our health care system--the good and the bad. Where it's broken, and how we've actually made amazing progress, and actually reduced costs in many areas. Also fascinated to hear someone else say what I've long thought, that we already have universal health care coverage in this country, though few recognize it, it's not called that, and it was not deliberately designed as such. And they authors are unequivocally against a single-payer system, stating that it will kill innovation, and citing case studies from other countries.

In each chapter, the authors cover a different aspect of the US healthcare system, indicating how it works today (2006), how it's broken, and then offer recommendations as to how it can be fixed. And there is plenty to fix, including pharmaceuticals, med school, insurance, Medicare/Medicaid, and hospital systems. They had plenty of great recommendations in these area. If you are a big player in the industry, or a big employer, this book has plenty of actionable ideas to consider.

However, I did not come away encouraged by this book. The authors rely almost solely on disruptive innovations in the industry for reducing healthcare costs. And some of that is slowly occurring. But there are some serious roadblocks, like public policy and heavily entrenched incumbents. The authors identify and address these, but don't offer much for how to overcome these. Basically, they recommend that policy makers speed up their acceptance of disruptive innovators. There is also some mention of the need for a benevolent dictator to make these changes.

I think there is merit for a book focusing solely on the policy and regulatory changes that need to be made to enable disruptive innovators.

I was also disappointed that there was not a single paragraph discussing tort reform. I believe our legal system has played a significant role in driving up our health care costs, but it wasn't even mentioned in the book.

Finally, this book was written in 2006, prior to ACA. I've looked to see if there is any update somewhere but did not find it. My healthcare/insurance costs have more than doubled since 2006. I think an updated edition of this book would be very useful.

[Kristen · Rating 4 out of 5]

An interesting study of one model of how the US might change its healthcare system. I learned some things about our healthcare system (although I had most of the basics from reading An American Sickness) and I learned a lot about their theory of disruptive innovation, a business/economics concept I hadn’t read about before. The authors did a good job of explaining that theory (which is Christiansen’s own) in detail while carefully interweaving it with both healthcare and non-healthcare examples, so as to explain the theory well without departing too far from the topic of the book.

There were some obvious predictions that have already proven false 10 years after publication, and of course it was written before the ACA, which undoubtedly changed the course somewhat (considering they specifically urged not going in the direction of government-provided healthcare). I thought the authors’ expectation that it will be almost impossible to make real change by government intervention in a democracy seemed sadly accurate. I was convinced by many of their suggestions for how healthcare providers should really best control their costs, and how the continuum will naturally move toward individuals with chronic conditions helping themselves through networks. The concept that we need systems that profit from our wellness instead of sickness is not new and is certainly true. Unfortunately their entire premise was constructed on the assumption that every part of the system will change the way they think it should in concert, without which it wouldn’t work. That was unrealistic. Their idea that large employers will start providing medical care for employees because it’s more cost effective is fundamental to their ideas, and it was also unrealistic. Large companies will simply all stop providing decent healthcare at all, and most employees won’t have any alternative but to accept that. I think they also ignored the fact that such a large part of the population isn’t covered by employers at all—not just poor people (whom them address rather briefly) but also people who work independently, or for small businesses that don’t offer healthcare, of which there are still many.

In sum, this was an informative read and an interesting theoretical exercise, with some ideas that I’ll keep in mind as we watch the market evolve.

[Andrew Beckett · Rating 4 out of 5]

An excellent perspective on the state of America's healthcare system, with some great ideas on where to go from here. This book opened my eyes to some of the possible solutions to reducing overall healthcare costs and improving effectiveness of treatment.

Though it took me a while (perhaps the whole book, really) to start thinking in the business lingo that Christensen writes in, I found it to be worthwhile to learn to think through.

Overall I would highly recommend this book to anybody involved in medicine and healthcare, or hoping to pursue a career in related fields. I would be interested to read a follow-up book incorporating current policy and national statistics.

[Kendrick Johnson · Rating 5 out of 5]

This book describes the future of our healthcare system in the most evidence-based and insightful way possible. Everyone working in healthcare needs to read it.

Christensen and his coauthors have studied our very complex healthcare system and then shown how it is following and will follow the same track as other technology-driven industries from a decentralized low tech industry to a centralized high tech industry and now moving back again to decentralization as the technology empowers people at all levels to do the work that only the doctors could do before.

[Richard · Rating 5 out of 5]

Probably Professor Christensen’s most sweeping and densest works, which is fitting for a system as complex is our healthcare infrastructure. Not being in the weeds on the subject, I can’t speak to how well the book’s prescriptions actually work. I do believe Christensen reframed the forces at play in a clear, useful manner. I read it about a decade after it was published, and much of the vision in the book hasn’t come to pass in the timeframe it’s authors hoped for...it would be fascinating to understand why.

[Victoria Poon · Rating 5 out of 5]

Much food for thought

This was an excellent new perspective on the healthcare system. The authors have clearly dissected out the the current models under which we are functioning and well supported their arguments for disruption and change. A must read for anyone interested in healthcare policy or just better understanding the system

[Peter Joosten · Rating 4 out of 5]

Great read. Christensen and others make it clear it is not only technology enablers to make healthcare affordable and of a better quality. You also need other business models and value networks, combined with changes in pharmaceutical companies, medical education and regulation. Must read for healthcare innovators.

[Boaz Maor · Rating 4 out of 5]

A most interesting and educational analysis of the healthcare system, using the same methodology of The Innovator’s Dilemma. The book is very thorough and deep combining skillfully strategy and tactics into a coherent an well structured analysis of this particular industry that is so ripe for innovation.

[Gabrielle · Rating 3 out of 5]

Better than I expected.

Imagine if health services were all about how to best support people?

Also imagine if an equitable health system / equitable health outcomes was non-negotiable.

This book only really covers the former. Sadly.

[Greg McGee · Rating 5 out of 5]

Good complement to Jonathan Bush's book, "Where does it hurt?"
Recap of the Innovator's Dilemma: https://bothsidesofthetable.com/under...

[Taylor Spencer · Rating 4 out of 5]

Almost 5 star worthy if it wasn't for its drier subject matter. For what it was - a book on healthcare policy - its was pretty well done! A surprisingly interesting read.

[Chikai Huang · Rating 4 out of 5]

A great book for understanding the systemic issues in the healthcare industry

[Jorge Castro · Rating 5 out of 5]

One of the best books I've ever read! It has a very a pragmatic and visionary approach. A must if you are in Healthcare IT.

[Hoang · Rating 2 out of 5]

Consistency bias, motivated reasoning. I had to stop midway through.

[Pa Ju · Rating 5 out of 5]

If you could only read one book on healthcare, it's this one.

[Thomas St Thomas · Rating 4 out of 5]

Really great look at healthcare in the US but as our payment model changes, it needs an update.

[Amaan Pirani · Rating 4 out of 5]

I learned a lot about healthcare from this book; that said, a bit reductionist in his arguments against single payer systems

[Bernard Michel · Rating 4 out of 5]

I love Clayton Christensen's books. This one was really interesting since he went into depth on the possible ways to disrupt the healthcare system with innovation.

[Sharath Reddy · Rating 5 out of 5]

Great overview of healthcare system
Conveys the framework of how to think conceptually about the system and issues