Tag Archives: disruption

Tools that will help disrupt Healthcare

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I’ve been reading this really interesting book on healthcare – it focuses on the potential Hows that healthcare can be disrupted. If you aren’t sure what disruption and/or disruptive innovation is then check out my last blog about some of the industries where it’s occurring and you’re likely part of the disruption.

If you buy your own health insurance you may have noticed a new type of insurance. It was new to me whenever I joined my health insurance company in the North West. Neither AMD nor Samsung had similar plans so when I first signed up for it, I was extremely ignorant of what it was and just signed up for something that looked good. This type of insurance is called HDI w/ HSA.

HDI: High Deductible Insurance. This means that you’ll likely have a high deductible (obviously) and will have to pay out of pocket.
HSA: Healthcare Savings Account. This is an account that allows you and your employer to make pre-tax contributions. You will also be able to pay for healthcare tax-free and accrue interest tax free as well. This is great in terms of how much money you actually gain from this. When you pay for a healthcare service like a Doctor’s visit, you’ll have to pay all $150, however, since you didn’t pay taxes on that $150 you end up saving money. Further, your employer can contribute to this account in the same fashion as your 401(k) and your account will be invested in a similar fashion as a 401 (k).

Of course there are some draw backs to this type of health insurance. First, until you reach your deductible you’re going to end up paying out of pocket. You could potentially have a deductible as high as $5,000 which is highly undesirable. Your employer might not contribute to your account, which places more of the burden on you, which sucks.

How can this contribute to disrupting healthcare? Well, you’re going to start really shopping around for your day to day medical expenses. You’re not going to go to a specialist unless you really think you need to. You’re not going to go straight to the hospital for care. You’re going to try to find another place to get the care you need. This will open up the possibility for care givers to provide healthcare in other fashions. This will potentially change the way that insurers will begin to pay out to providers as well.

There is also a push for Accountable Care Organizations, look for those as well, which are paid based on outcomes rather than the type of service being provided. These organizations will help disrupt incumbent firms and will likely capture the attention of insurance agents. I believe that in many cases this is where a lot of Exchange insurance programs are going.

Personally, I’m excited about the potential to work within an insurance company to disrupt the industry. I believe that there are changes that can be made internally, through educating on what metrics are and how to improve based on these metrics. I also believe that we’ll be in a position to help enable providers to be more efficient and effective care.

Continual disruption – still happening in TV and content

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One of my favorite things to read about is innovation. For those of you that know me, that’s not really a surprise. However, I think that there’s a lot of misunderstanding out there about what “disruptive” innovation is. Most people think that apps that modify the way you do something is disruptive. For example, people have said that companies like Kayak and Hipmunk are both disruptors of booking travel. However, the true disruption came from travelocity or orbitz, whichever came first. These sites really did change the way the game was played for booking travel because they essentially cut out both the middleman (travel agents) and the airlines involvement in book flights. Anything beyond that has simply been sustaining innovations. These are innovations that are quickly co-opted by the existing incumbents as it’s possible for them to do that. A more disruptive technology for travel would view the process holistically from the moment you booked the trip to the time to returned home from your completed vacation. The site would need to account for getting you to your destination without any sort of delays. In James Womack’s book Lean Thinking, they point out the “value add” activity of a flight was only 3 hours, while the total waiting time was over 12 and they didn’t include the effort it took to book the trip back in 1995. All inclusive it’s likely to be much worse now. Especially the way that airlines measure “on time departure” (leaving the gate on time) which is different than our “on time departure” (taking off on time).

In a true disruptive situation you’ll typically see the incumbents resorting to changing laws to keep their supremacy of the markets, we don’t see this in travel at all. Where we do see this is in telecom and cable. The image below from Mashable pretty well explains why this is happening.

There’s likely overlap between users of Netflix, Prime, and Hulu, but if I was cable TV I’d be running scared. I also would love to see this graphic if you add Twitch.tv and specifically ESPN. I think eventually twitch will be disrupting ESPN and the traditional sports networks out there.

How are the cable companies using legal and technical mechanism to limit access to content on Netflix, Amazon, Hulu, and Twitch? First, the movie industries have absurd agreements with cable companies (providers) giving their services, like Xfinity from Comcast first access to content. In many cases this will translate into something earlier on the subsidiaries of those in terms of networks. Second, cable providers use their control over the network to throttle the internet speeds of these internet services. This is leading them to try to change the laws around net neutrality so that the cable providers don’t just become “dumb pipes” that content is passed through but the users don’t interact with.

I believe this also indicates that both cable networks and internet providers are being disrupted in a way that they don’t understand. They are using every tool they have at their disposal to fight against the adoption of these services, but they don’t understand what’s happening. Consumers have hired comcast, verizon, and others to provide them a solid consistent connection to whatever content the user wants. Internet providers are trying to force themselves into a middleman role that the users don’t want. When opportunities arise that will allow the user to experience content on their own terms. It’s clear that cable TV is losing the fight and this will only accelerate as people purchase more tablets and devices like that. Chromecast (which allows people to display things from a laptop/tablet on their TV) is another disruption that Google is providing, Amazon has something similar for their Tablets (which will increase Prime usage by the way). The TV companies are losing and need to figure out new business models to stay afloat. This is where disruption is happening. Not in other spaces.