So, you’re looking to change the US healthcare system? Most technology solutions will have to work within the confines of the healthcare system, but if you want to truly change the healthcare system, then you need to reimagine how the current status quo operates. This post is a bit of a break from my focus on lean product development, which is really meant to help you bring solutions to market within the existing market and incentive structure.

If you’re creating a disruptive force in healthcare, you will need to create either

  1. Change existing behavior
  2. Create a new part of the healthcare system

My current focus is on the former, which tends to be a more complex problem to solve then starting a problem anew, but it also allows for a greater impact. In order to build a service that changes behavior you need to understand incentives and how social networks are constructed in healthcare.

Change Existing Behavior

First, let’s tackle incentives. Appealing to altruism is nice, but not a long-term sustainable solution. Incentives can take many forms, but the winner overall is money / payment. Professionals in healthcare are not going to take significant losses to income long-term even if that means they are working toward a better future. That means in order to change behavior you need to understand how you can reduce the time and effort of whatever you are trying to get done and use social pressure to reinforce changes. If you are trying for systematic change, then you need to break this systematic change into its smallest pieces.

This means constructing a relatively robust strategy of influence and efficiency in action, bringing in individuals who can coach healthcare professionals through change and help them stay accountable to this change. Change is difficult, hard and painful. It is hard to build a service that encourages healthcare professionals to go through this difficult work, but well worth the effort. Social influence may be the best way to go, because doing hard, difficult work can be a lonely task.

Significant patient capital investments need to be made in order to see the healthcare system endure these changes until a certain activation energy is reached and the rest of the market starts to adopt. While you are building this movement of change, if you can appeal to a sense of fun, purpose, societal benefit and other positive reinforcers then you have the beginnings of the catalysts that can help see your changes spread like wildfire.

Create a New Part of the Healthcare System

On the other hand, building a new healthcare system outside of the existing system may be the best hope yet of driving whole scale changes. But this also takes significant time and effort to do. You are fighting an uphill battle against an industry that is well-entrenched with significant protections to maintain its position. Why will employers pay for a different healthcare payment system, when they already get great rates from their current insurance partner? Why will consumers try your new service, when their employers already subsidize great healthcare? You need to find the most broken parts of the system and fix them, the people with the greatest pain points. They will also be the people with the most skepticism. But if you co-design the next part of the healthcare system then you can have a chance to bring more consumer-friendly healthcare to light.

Another strategy is to serve individuals with greater ability to pay and subsidize this new part of the healthcare system akin to the Tesla Model S / Roadster strategy to subsidize the Tesla Model 3 broader market distribution. This is a potentially lucrative, but also a potentially less impactful way to create a new healthcare system. It will take very patient investors to wait for you to generate significant economies of scale and traction before entering the larger market. There are examples of this in the provider (Iora Health), payer (Clover Health and Oscar Health) and pharmacy (PillPack) spaces. In some cases, like for PillPack, you can partner with a much larger partner with pervasive distribution channels like Amazon to take your consumer-friendly service to scale. In the same way Oscar Health or Clover Health could very well be purchased by a large payer like CVS-Aetna and achieve scale that they could not dream of achieving by themselves.

If you choose either path of changing behavior or creating a new healthcare, there are many challenges to overcome, but in order to save our healthcare system we need more disruptors and change-makers like you. This post just scratches the surface of what can be done to disrupt or change the US healthcare system and in future posts I hope to explore this topic further.