Product vs. Process Innovation

In studying Innovation, one of the themes is that as products and industries mature, the nature of innovation shifts from PRODUCT innovation to PROCESS innovation.  A professor at MIT Sloan, James Utterback, outlines this concept in Mastering the Dynamics of Innovation - How Companies Can Seize Opportunities in the Face of Technological Change (1994, Harvard College), p. 91:

In healthcare, I view the overall process to be described by this flow diagram, starting from access to diagnostics to thearpy to outcomes to Value, both clinical and economic:

With the economic system in the U.S., the medical device & pharmaceutical industry has been incented to develop tremendous technological solutions for treatment, and to some extent diagnostics as well.  Therefore I would hypothesize that the PRODUCT innovation has been maximized in these two areas - i.e. the pacemakers, stents, spinal implants, drugs, MRI's, ultrasound scanners, etc. have reached close to a plateau in terms of the functional capabilities they possess.  Even with greater investment in these areas, alone they cannot increase overall clinical and economic value to the healthcare system.

In contrast, technologies that enhance the FLOW, EFFICIENCY and THROUGHPUT of patients in the healthcare system have much greater potential for additional clinical and economic value.  I will be looking at the problem of cost reduction in healthcare using these frameworks as my foundation.

Introductory thoughts on this Blog about Revolutionizing Healthcare through Industry

Inspired by both Daniel McGlaughlin (Director, Center for Health and Medical Affairs at University of St. Thomas in Minneapolis and former CEO of Hennepin County Medical Center, who writes a High Performance Healthcare Blog at http://blogs.stthomas.edu/hphc/) and Julie & Julia, the movie about Mastering the Art of French Cooking, I have decided to start blogging about my career passion, Revolutionizing Healthcare through Industry.

Why this topic, you might ask?  Our healthcare system is plagued with high costs, low access, and quality predicaments even though we have the best technology in the world.  To reduce cost, increase access, and increase quality, as a med-tech industry professional and MBA, I believe industry is best positioned to develop solutions that work.  No amount of government-mandated change can effectively fix our problems as a market-driven solutions that consumers, employers, patients, providers, and payors want.  This blog is about exploring the principles behind and examples of innovations that can accomplish our three goals of reducing cost, increasing access, and increasing quality.

And why me?  I was recently out for coffee with healthcare guru David Dickey, currently the CEO of Second Story Sales after being one of the early employees of Definity Health which pioneered Consumer Driven Healthcare Plans and the Health Reimbursement Account, clearly great financial innovation that has already affected us all.  After comparing each other's backgrounds in healthcare and medtech, Dave called me a "Forrest Gump of Healthcare," as many of us are in some way or other once we reach the ripe old age of 40.  Evidence: experiencing my sister's brain tumor and care in the 1970's, attending St. Olaf at the same time as his friend Tony Miller who started Definity; starting my career in the pacing industry with Medtronic during the rise of the implantable defibrillator; writing a master' thesis on the adoption of new medical technologies; consulting post-MBA with an innovation management firm working with academic affiliates including Clayton Christenson; driving the decision for remote follow-up and heart failure sensors at Guidant; being investor #10 with QuickMed/MinuteClinic; knowing my former St. Olaf physics lab partner, David Rose, who invented GlowCaps (http://www.vitality.net/); shaking Regina Herzlinger's hand at HBS, the mother of Consumer Driven Healthcare; being a subject matter expert with WMDO.org's worldwide training programs for medtech as WMDO guides learning around the globe; and teaching my course on Marketing Medical Technologies at UST.  I would say Dave is another Forrest Gump, as well as many around us in the Medical Alley / LifeScience Alley we live in here in the Twin Cities.  Together with innovators and entreprenuers, I believe we possess the collective brainpower and innovation capabilities to develop truly revolutionary solutions that will cure our healthcare system, and I want to do what I can to stimulate the type of innovation that will cure our U.S. healthcare system.