adds cost.” What he means is that hospitals “keep having to add scope and depth.” If one hospital gets a fancy new MRI machine or surgical robot, competing clinics feel they have to as well. In Christensen’s model, hospitals are the centralized incumbent. “They have become extraordinarily capable, but in the consequence, they’ve overshot the amount of care most patients ever utilize, and yet they have to pay for it,” he said.
OK, so how to disrupt this industry? “Decentralization is only beginning in healthcare,” he said. “What has to happen is we have to drive technology into outpatient clinics…and then keep driving technology into that venue…ultimately needing fewer and fewer of the expensive hospitals. We need to bring technology to primary-care doctors, nurses, physician’s assistants, and homes. By enabling lower-cost things and care and lower-cost care givers to do more sophisticated things, that’s the mechanism by which healthcare becomes affordable and accessible.” (Some examples of related companies in the Pacific Northwest might be Qliance, Clarity Health, and ZoomCare.)
It’s a similar landscape in education. Look at the cost of food services and athletic facilities at universities now as compared to 30 years ago, Christensen said. To disrupt a huge, interdependent industry like education, it sounds like you have to start on the edges. For example, it could begin with small online education programs and cheap cell phones in primary and secondary schools, rather than putting computers into classrooms, which hasn’t really worked after 25 years.
Christensen didn’t have time to really explain this, but he talked about the importance of infant education—parents talking to their babies before age 3, and how that correlates with later performance in school. His hypothetical idea would be to support a program in Everett (it wasn’t clear whether he meant in WA or MA) which focuses on early infant education, tracks how the kids do in school, and then, if it’s successful, “roll out point solutions” in other parts of the country.
He also had shrewd insights into the venture capital and private equity industries. Suffice to say he thinks they’re ripe for disruption. “Most [venture firms] which 10 years ago built themselves making early-stage venture capital investments still have the word ‘ventures’ on their business cards,” Christensen said. “But really they have become later and later-stage private equity as the amount of money they have to put to work grows, so you have this odd sense of there is too much capital at the big, late-stage end of the business chasing too few deals and a paucity of capital at the bottom.”
I spoke with a few experts after the talk to hear their reactions, and to flesh out some of the ideas in healthcare and education. One of them, Thomas Thurston of Growth Science International, a research and consulting firm in Portland, OR, has been working with Christensen on testing disruption theory, and has been building predictive models of whether a company will succeed or fail. He has clearly drawn inspiration from Christensen’s teachings.
Thurston boiled down how disruption theory can be applied to healthcare. “A lot of the time, it’s about helping less skilled, less wealthy people do what was done by the rich and
