Earlier this month, we lost a giant among business thinkers: Clay Christensen, a Harvard Business School professor who coined the term “disruption,” forever changing startup pitches and board meetings. Clay taught a generation of business leaders how to think about innovation. He also taught leaders how to understand innovation’s potential and recognize its blind spots, build aware and agile organizations, and listen to customers about their “jobs to be done.”
Clay called for healthcare’s disruption through reconfiguration. In his book, The Innovator’s Prescription, published nearly a decade ago, he wrote how reconfiguration is about moving away from heavy, one-size-fits-all institutions based on Robin Hood economics and conflicting incentives. He pushed instead for the healthcare industry to move towards specialized businesses with operating models consistent with their jobs to be done, and with revenue models to match.
Clay’s work has influenced our own thinking at the Oliver Wyman Health Innovation Center (OWHIC). We continue to debate if his proposed specific reconfiguration is the right one. In the meantime, the need to reconfigure the healthcare industry is clear. This reconfiguration is not just about making structurally-flawed payer, provider, and supplier roles better. It’s about fundamentally reinventing what healthcare roles are. Disruptors big and small make it an inevitable truth we’ll get there.
J. P. Morgan Healthcare Week: Where Clay’s Inevitable Truth of Reconfiguration Echoed Loudly
I couldn’t help but think of Clay and his inevitable truth of reconfiguration at this year’s J. P. Morgan Healthcare Week. In recent years, the mood at J. P. Morgan could perhaps best be described as Alan Greenspan’s famous “irrational exuberance.” Countless players were there to promote their companies and make deals. Some of the best minds in science and business claimed their fair share of spending within a broken healthcare system. And there was so much money to be had.
Yet this year, the mood was different. Seriousness and purpose were in the air. I like to think this was because the healthcare industry is finally coming to terms with the fact that disruption is here.
This year, the mood at J. P. Morgan Healthcare Week was different. Seriousness and purpose were in the air. I like to think this was because the healthcare industry is finally coming to terms with the fact that disruption is here.
We heard perspectives from many healthcare leaders and disruptors that week. For instance, at the StartUp Health Festival, my colleague, Jacqueline DiChiara, Editor, Health & Life Sciences, Oliver Wyman, heard from innovator after innovator about the existential need to delight the consumer. Clay’s “jobs to be done” were center stage.
And, at recent events hosted by Andreesen Horowitz, Venrock, and Canaan Partners, partners Tom Robinson and Ashley Smith and principal Rachel Zeldin heard from various startups like Alpha Health, Virta, and Truveris. Companies like these are fundamentally changing the cost structures of small parts of the industry – just like Clay prescribed ten years ago.
The big players at J. P. Morgan Week – those who delivered carefully-scripted presentations before masses of analysts and investors – had a more solemn tone. Among provider systems, Deidre Baggot, PhD, a partner in Oliver Wyman’s Health & Life Sciences practice, and I heard much talk about affordability, access, and new partnerships.
Big systems have a steep hill to climb, of course. As Clay would perhaps say, they’re much more likely to be disrupted than to be the disruptors. Focus is the first step on the road to financial sustainability, though.
Big tech, of course, was out in force at J. P. Morgan Week, positioning themselves as not just players in the existing healthcare ecosystem, but as creators of a new one. Oliver Wyman learned about the digital health landscape by spending a thought-provoking afternoon at the Amazon Web Services (AWS) loft, where I led a panel on provider perspectives at the Health Innovator Summit, co-hosted by the Mayfield Fund and AWS. There, innovators like Endpoint Health said they’re redefining critical care using software – saving lives and money in equal measure.
Clay would perhaps remind us that talk is cheap. He’d maybe say most organizations that attended J. P. Morgan Week find it impossible to resist the siren song of profits from the current broken sick-care system. That’s probably true. But I like to think this year’s conference was a fitting send-off for him – and the beginning of a new era of seriousness in healthcare disruption.