Clayton Christensen, a professor with the Harvard Business School, studies the ways in which industries change to become more efficient, and he thinks that lessons learned about disruptive innovations in the auto, computer and airline industries should change the way we think about the future of health care.

“A disruptive innovation is a technology that brings a much more affordable product or service that is much simpler to use in a market,” Christensen explained in a recent Health Affairs conversation with Mark Smith from the California HealthCare Foundation. In the automotive industry, Toyota’s lean production system acted as a disruptive force on American car makers like GM, Ford and Chrysler by creating a new type of car, one more concerned with cost-efficiency and fuel economy than horsepower.

Christensen’s book, The Innovator’s Dilemma, also cites an example of previous disruptive innovation within the health care industry. “Health maintenance organizations were disruptive technologies to conventional health insurers,” Christensen writes.

HMOs did not modify existing insurance plans; instead, they offered a new type of insurance. Likewise, present efforts to reform health care should not attempt to alter current systems of care but to devise new systems, according to Christensen.

“The way that we can make health care accessible to the uninsured isn’t to get today’s health-care institutions to somehow become low cost or to get the expensive specialist physicians to somehow accept pay cuts,” Christensen said. “Rather, we will make it accessible for those people only by enabling or making more capable lower-cost providers and lower-cost venues of care.”

Turning care over to lower-cost providers might mean encouraging individuals to see a registered nurse or medical assistant instead of an MD, particularly if patients have an ailment such as strep throat, where medical technology has replaced much of the individual expertise traditionally necessary in diagnosis and treatment.

“Now there’s a precise diagnosis for strep throat: You apply the test, and the patient has it or doesn’t,” Christensen commented. “That means that somebody with a lot less skill can actually give a better diagnosis faster and at a lower cost than could the expert a generation ago.”

Despite this commoditization of care for strep throat, most patients in the United States still need to visit an MD to obtain the appropriate prescription. For strep throat and other ailments with well-established “rules” of treatment, like pink eye or bladder infections, Christensen advocates the use of MinuteClinic walk-in services.

Nurse practitioners and physician’s assistants handle most care in Minute Clinics, and “for $39 in [15] minutes, they’re going to not only give me the diagnosis, but a prescription for the medication,” Christensen says. Because of their reliance on care providers who are not American Medical Association licensed MDs, MinuteClinics pose a threat to the established order, a threat that might represent the best way to alleviate concerns about medical spending, Christensen argues.

The Disruptive Potential Of ABC Codes

MinuteClinics pose a threat to the AMA because they offer a lower-cost alternative to traditional care structures, but ABC Coding Solutions’ new tool eClaim.biz may pose an even greater threat, industry insiders say.

Christensen proposed that the influence wielded by AMA physicians through its monopolistic control of CPT codes and lobbying efforts kept health care costs artificially high. “I think that regulation, as well as the strength of the professional unions and associations, has trapped the process in a high-cost infrastructure,” Christensen says.

The AMA depends heavily on CPT code revenue to fund its activities; in fact, “use of CPT codes is the largest source of income for the AMA,” according to Tim Bolen of the Bolen Report, who estimates 2007 CPT revenues at $140 million. Unlikely as it might seem today, ABC’s eClaim.biz could someday steal away that CPT revenue, if Christensen’s theory of disruptive innovations proves an accurate model for the health care industry.

Christensen says that disruptive innovations should target an under-serviced population, and ABC provides billing codes to the medical practitioners whose treatments currently lack an accurate CPT description. “ABC Codes were designed for 24 health practitioner types who lack billing codes -- and for medical doctors who practice alternative medicine,” explained Bolen.

Perhaps most importantly, ABC codes provide billing codes at a significantly lower price than CPT codes. “For less than $50 per month per practitioner, with no limit to the number of patients it will carry, practitioners can go online and create truthful claims using a tool created by ABC Coding Solutions called eClaim.biz,” Bolen said in a statement.

By providing cheaper services to an under-serviced population, ABC has already fulfilled Christensen’s two main prerequisites for a disruptive innovation. Whether eClaim.biz will take market share and revenue away from CPT codes remains to be seen, but The Innovator’s Dilemma provides a myriad of precedents in a variety of industries that suggest CPT codes could soon be a thing of the past.

In fact, the most appealing aspect of disruptive innovation as a solution to the health care industry’s spending increases is its aura of inevitability. Disruptive innovation does not require policy changes; it occurs naturally as a result of market forces pushing for increasingly cost-efficient technologies.

Policy Implications Of Disruptive Innovations

Amid growing concerns that President Bush’s reliance on health savings accounts might not actually lower individual costs for health coverage, Christensen’s insights offer support for the embattled HSA program. HSAs represent part of the solution, but they can provide significant relief only when used to fund care from non-traditional providers.

“[Disruptive innovation is] not just a product-for-product or service-for-service disruption; it’s a system disrupting a system,” Christensen explained. HSAs, MinuteClinics and eClaim.biz are all new products, and separately they may not offer meaningful change, but together they could form a new system.

“You can see how people would actually be delighted to have the HSA solution and a MinuteClinic, because they can get the job done cheaper, faster and more conveniently,” Christensen concludes. “If there were a totally different system out there that could disrupt the existing system and enable these types of choices, then HSAs might be seen as good news, but when we just present it as HSAs in the old system, it really is a pretty ambiguous thing.”

In addition to suggesting ways in which HSAs might become more effective agents of change, Christensen also implied that innovations in chronic care could provide similar benefits. A diabetes mellitus patient, Christensen has personally experienced the benefits of innovation in diabetes care.

Because of the cost and inconvenience traditionally associated with microglobulin tests, Christensen often did not monitor that aspect of his condition, but upon learning of a mail-order microglobulin test he bypassed the hassle and expense of regular physician visits. “Now twice a year they send me this kit, and I just have to dip the strip into a urine sample, send it off to them, and back comes my microglobulin score, and so I actually have no need ever to see a physician,” Christensenn asserts.

As policy makers attempt to institute health care reform, they face a difficult balancing act: encouraging the types of disruptive innovation that will save money without alienating the powerful AMA. Still, for an administration struggling to defend HSAs and find a credible means of reducing health care spending, Christensen’s insights could be just what the doctor -- or nurse practitioner -- ordered.

For those thinking past the current administration about the health policies of 2008 presidential candidates, it might also be worth noting that Christensen is friends with Republican hopeful Mitt Romney. The two attend the same Belmont, MA church congregation.

For more on the potential impact of disruptive innovation on health care, you can find the full text of Christensen’s interview online at: http://content.healthaffairs.org/cgi/content/full/hlthaff.26.3.w288v1/DC1.