Rooting For Schumpter’s Gale – The Health Blog


Not familiar with Schumpeter’s gale? You may be more familiar with the term “creative destruction”. Schumpeter’s “madness of creative destruction” is the inevitable “process of industrial mutation that continually revolutionizes the economic structure from within, incessantly destroying the old, incessantly creating a new one.”

We need a Schumpeters gale in the health care system.

What made me think of this was the news that Tik Tok became the most popular internet site in the world and even surpassed Google. It reminded me that things sometimes change; perhaps, after all, there is hope for health care.

If you missed the news about Tik Tok – maybe you were too busy with it or too busy ignoring it – it came last week in Cloudflares Radar 2021 Year in Review. Tik Tok was a pretty distant 7th a year ago, a good chunk behind leading Google and # 2 Facebook, but shot up in 2021. Tik Tok has gone from being just stupid short videos to a force in social justice, the job market, celebrity status and mental health. It plays a role in the life of Gen Z / Gen Y, as Facebook desperately wants it to do. Facebook’s demographic issues had been well known, but Tik Tok surpassed Google?

That’s the kind of change I wish we saw technology bring health care into.

The dominance of “Big Tech” – also called Alphabet / Google, Amazon, Apple, Facebook / Meta and Microsoft – is often discussed and regretted, but we must keep in mind that such dominance is typically transient. 20 years ago, Apple was an also-driven, Google tried to be an also used, and Facebook was not yet invented. Amazon had a market value of less than $ 4 billion. Microsoft was still Bill Gates’ company, not the open source, cloud-based, subscription-oriented company that Satya Nadella has been around for the past decade.

In twenty years, maybe within ten years, the list of Big Tech companies will look very different. Maybe it will be Web3, maybe the meta-verse, maybe quantum computation or AI, or even something few of us have even heard of yet, but new waves will come and will bring new technology giants. That’s why Apple is investing in “face computers”, Facebook is switching to Meta, and Google has a “moonshot factory”. That effort and others may help keep them relevant, but the barbarians are still coming, so to speak.

On the other hand, it goes back twenty years, and the large hospitals / hospital systems are largely the same. The same goes for payers, pharmaceutical companies and businesses. There have been mergers and consolidations, but the dominant companies were then mostly the dominant companies now – only more. That’s not how it should work. That’s not how it works in tech.

Last week’s “On Tech Newsletter” in New York Times, Shira Ovide says bluntly “technology won.” She explains:

Tech is more like a coat of new paint on everything than a definable set of products or industries. Healthcare is technology. Entertainment is technology. Schools are technological. Money is technology. Transportation is technological. We live through technology.

Technology is also in a liminal phase, where the promise of what may come next exists side by side with the complicated reality of what is happening now.

You could certainly argue that “healthcare is technology” and that much of that transition has happened in the last twenty years. We have widespread electronic medical records, minimally invasive surgeries, new types of cancer treatments, all sorts of 3D-printed objects, CRISPR, greatly improved prostheses, VR treatments and training, and of course more types of digital health efforts than even today. capitalists can throw money after.

It’s all very impressive, but you will get many arguments that our nation’s health is better as a result, that our experiences in the health system are better as a result, or that our health care system is cheaper as a result. No one seems to be true. Tech, in healthcare, is a bolt-on; it adds cost, it removes more of the human touch, and it does not fundamentally transform the health care system.

Unlike the actual technology industry, the technology in healthcare tends to further cement the position of the established companies, not displace them. It does not make the health experience new, it just makes it seem “new.” TikTok is not going to dethrone Epic or The Mayo Clinic. People in healthcare are not so afraid of “what’s next” in technology.

Much has been made of the 2021 record set for digital healthcare investments – $ 28 billion, which was double 2020 – but when I look at them, I still can not see an Uber or an Amazon, a company trying to break a existing industry. I see a lot of innovators who think they can alleviate some pain points but within the existing system and I see investors who mostly want their share of the healthcare sector at $ 4 trillion.

I want to see technological innovators who look at our healthcare system and think, hmm, there are too many people and places that do too many things for too much money – and often too late after there is a problem. Who wants to bring the cost structure down, not 5-10%, but to 5-10% of our current levels. Who wants health to be an ongoing process governed in our daily lives. Who wants healthcare technology – and the consequent healthcare system – to be ubiquitous, invisible and largely autonomous. Who does not think we should trust millions of highly educated health professionals (and whose education is actually becoming one of the cost problems in the health system).

Tik Tok would understand that.

With all due respect, I’m not sure that David Feinberg, for example. People who have spent their professional lives in healthcare can often see how to improve it but not fundamentally reshape it, and almost never how to bring creative destruction to it.

I do not expect Tik Tok to revolutionize our healthcare system – but ByteDance or WeChat, perhaps. An AI company? Of course. A synthetic biology or nanorobotics company? Definitely. On the other hand, it’s interesting what CVS, Walmart, even Amazon are trying to do in the healthcare industry, but honestly, they help us hear the orchestra on the Titanic better: OK, but that’s not really the problem.

If we recognize the health care system in 2050, if some Schumpeter’s gale has not blown the current version away and replaced it with something completely new, we will have failed.

Kim is a former e-marketing manager at a major Blues plan, editor of the late and lamented and now a regular THCB contributor

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