Will Healthcare Reform Kill Health Innovation?

Clark C. Havighurst

Clark C. Havighurst

Will healthcare reform as it now is shaping up kill health innovation? Clark C. Havighurst, Adjunct Scholar at Duke University writing for the American Enterprise Institute for Public Policy Research says it will.

In an article titled, “Private Health Plans: Where Is the Value? What Is the Point?” Havighurst writes that the Obama-sponsored healthcare reforms “are virtually certain to leave private health plans largely immune to what Harvard Business School’s Clay Christensen has termed ‘disruptive innovation.’”

Havighurst notes that Christensen has observed how in other industries innovative firms have sometimes departed radically from deep-seated industry paradigms in order to give consumers new, low-cost options. Such options have typically involved some sacrifice of supposed quality–but not, as it turned out, quality that all consumers valued highly.

“Although such outside-the-box innovations have occasionally occurred in health care delivery,” Havighurst writes, “they have appeared almost exclusively in integrated health plans or where patients were paying their own bills because they were uninsured or had high-deductible coverage.”

Havighurst notes that, “The impending reforms are likely to preclude disruptive challenges to the tenet–originating in the professional paradigm of medical care and embodied in all insurance coverage in the United States–that cost is an illegitimate criterion in coverage and treatment decisions whenever a patient might benefit.”

“What need is there,” Havighurst writes, “…for private health plans if all they do is administer coverage prescribed by Congress, a public bureaucracy, state law, and the medical profession?

Havighurst says that more attention should be paid to creating conditions under which competition can actually bring health care costs down. Otherwise, he asks, what is the point of private health plans?

You can read the entire article at http://www.aei.org/outlook/100083.

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