Today I read an intriguing piece in The New York Times which looked at different ways capital can be invested, and how over-reliance on one style may be cramping our economy.
In the piece, Harvard professor Clayton Christensen asserts that there are three main models for investing in innovation:
Empowering: These innovations “transform complicated and costly available to a few into simpler, cheaper products available to many,” Christensen says. Obviously, the reduction of the mainframe into consumer desktops is one example. These products open up new markets.
Sustaining: These innovations replace old products with newer ones that improve on the old (his example: The Toyota Prius hybrid). They don’t necessarily open new markets, as people often buy the improved model instead of the previous version, but they do keep the market moving.
Efficiency: These innovations reduce the cost of making and distributing products and services, making capital available to keep the improvement process. They generally don’t expand markets at all.
In Christensen’s model, industries cycle through each of these stages and create new markets and jobs in the process. But that engine seems to be stuck in neutral of late, he suggests.
At this point, he argues, VCs and companies with excess cash are focused on a new finance model which discourages investment in brand new, empowering innovations. Capitalists want to make big money but are being channeling into spending only on the third stage of the cycle.
So, why all of this economic analysis in an EMR publication? Well, because I’d argue that the EMR business has already fallen into just such a stall. Rather than come up with paradigm-shifting innovations which really empower doctors, vendors are falling over themselves to create more efficient models of the same basic thing.
Not only is that bad for the health IT economy, it’s bad for end users, few of whom are rapturously happy with the basic EMR paradigm. It discourages innovations that are patient-facing — such as a fascinating three-dimensional avatar I just heard about which can be used as a PHR — since there’s little if any funding for such projects.
Worst of all, focusing on efficiency doesn’t inherently improve patient care either, something we’d hope would be the fundamental goal of any EMR.
Given the stakes involved, let’s hope investors decide that chasing efficiency by reworking old models isn’t the best way to keep the EMR business alive. Otherwise, we may stay bogged down for many years to come.