Not familiar with Schumpeter’s gale? You may be more familiar with the term “creative destruction.” Schumpeter’s “gale of creative destruction” is the inevitable “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Credit: Shutterstock
We need a Schumpeter’s gale
in healthcare.
What made me think of this was the news that Tik Tok became
the most popular internet site in the world, surpassing even Google. It reminded me that things sometimes do
change; perhaps there is some hope for healthcare after all.
If you missed the news about Tik Tok – perhaps you were too busy on it or too busy ignoring it – it came last week in Cloudflare’s Radar 2021 Year in Review. Tik Tok was a fairly distant 7th a year ago, well behind leader Google and #2 Facebook, but shot up in 2021. Tik Tok has gone from being simply silly short videos to a force in social justice, the job market, celebrity status, and mental health. It plays a role in Gen Z/Gen Y’s lives that Facebook desperately wishes it did. Facebook’s demographic issues had been well known, but Tik Tok surpassing Google?
That’s the kind of change I wish we saw tech bringing
in healthcare.
The dominance of “Big Tech” – a.k.a., Alphabet/Google,
Amazon, Apple, Facebook/Meta, and Microsoft – is oft discussed, and usually
lamented, but we have to keep in mind that such dominance is typically
transitory. Twenty years ago Apple was
an also-ran, Google was trying to be an also-used, and Facebook had yet to be
invented. Amazon had a market capitalization
under $4b. Microsoft was still Bill Gates’ company, not the open source,
cloud-based, subscription-oriented company Satya Nadella pivoted to within the
last decade.
In twenty years, maybe within ten years, that list of Big
Tech companies will look very different.
Maybe it will be Web3,
maybe the metaverse,
maybe quantum
computing or AI,
or even something few of us have even heard of yet, but new waves will come and
will bring new tech giants. That’s why
Apple is investing in “face
computers,” Facebook is transitioning into Meta, and Google has a “moonshot factory.” Those efforts and others may help keep them relevant,
but the barbarians, so to speak, are still coming.
Go back twenty years, on the other hand, and the big
hospitals/hospital systems are pretty much the same. Same for payors, pharma, medical device
companies. There have been mergers and
consolidations, but the dominant companies then are mostly the dominant
companies now – only moreso. That’s not
how it is supposed to work. That’s not
how it works in tech.
In last week’s “On Tech Newsletter” in The New York Times, Shira Ovide flatly says “technology won.” She explains:
Tech is more like a coat of new paint on everything than a definable set of products or industries. Health care is tech. Entertainment is tech. Schools are tech. Money is tech. Transportation is tech. We live through tech.
Technology is also in a liminal phase where the promise of what might be coming next coexists with the complicated reality of what is happening now.
You can certainly make an argument that “health care
is tech,” and that much of that transition has happened in the last twenty
years. We have widespread electronic
health records, minimally invasive surgeries, new types of cancer treatments, all
sorts of 3D printed objects, CRISPR, greatly improved protheses, VR treatments
and training, and, of course, more types of digital health efforts than even
today’s venture capitalists can throw money at.
Credit: HealthTech Zone
It’s all very impressive, but you’d get a lot of
argument that our nation’s health is better as a result, that our experiences
in the healthcare system are better as a result, or that our healthcare is any
cheaper as a result. None seems true. Tech,
in healthcare, is a bolt-on; it adds costs, it removes more of the human touch,
and it does not fundamentally reshape the healthcare system.
Unlike the actual tech industry, tech in healthcare
serves to further cement the position of the incumbents, not displace them. It
doesn’t make the healthcare experience new, it just makes it seem “newish.” TikTok is not going to dethrone Epic or The
Mayo Clinic. People in healthcare aren’t too scared of the “what’s next” in
tech.
Much has been made of the record
setting 2021 for digital health investments -- $28b, which was double 2020 –
but when I look at them I still don’t see an Uber or an Amazon, a company than
is trying to break an existing industry.
I see a lot of innovators who think they can remedy some pain points, but
within the existing system, and I see investors who mostly want their slice of
the $4 trillion healthcare sector.
I want to see tech innovators who look at our
healthcare system and think, hmm, there’s too many people and places doing too
many things for too much money – and, often, too late, after there is a
problem. Who want to bring the cost structure down not 5-10% but to 5-10%
of our current levels. Who want health to be an ongoing process managed in our
daily lives. Who want health tech – and the
resulting healthcare -- to be ubiquitous, invisible, and largely
autonomous. Who don’t think we need to rely on millions of highly trained
healthcare professionals (and whose training, in fact, becomes one of the cost
problems in the healthcare system). Credit: Getty Images
Tik Tok would understand that.
With all due respect, I’m not sure that David
Feinberg, for example, would. People who have spent their professional lives in
the healthcare system can often see how to improve it, but not to fundamentally
reshape it and almost never how to bring creative destruction to it.
I’m not expecting Tik Tok to revolutionize our
healthcare system – but ByteDance
or WeChat,
maybe. An AI
company? Of course. A synthetic
biology or nanorobotics
company? For sure. By contrast, what CVS,
Walmart,
even Amazon
are trying to do in healthcare are interesting, but, honestly, they’re like helping us hear the orchestra
on the Titanic better: OK, but that’s not really the problem.
If we recognize the healthcare system in 2050, if some
Schumpeter’s gale hasn’t blown the current version away and replaced it with
something truly new, we will have failed.