Clayton Christensen of Harvard Business School is one of the most respected thinkers on business innovation, and his book, The Innovator's Dilemma, was a landmark in the field. His analysis of "disruptive innovation" has taken its place as one of the big ideas in modern business theory.
So what does he have to say about competition and innovation in health care? Why, it would have to be the standard Republican line that competition drives innovation and reduces costs, right?
Not so fast…
Here's what Christensen actually says, in a March Business Week column:
Economists are wrong in asserting that competition controls costs. Most often innovation and competition drive prices up, not down, because bringing better, higher-priced products to market is more profitable. Hospital-vs.-hospital competition causes providers to expand their scope and offer more premium-priced services. Equipment suppliers boost the capability and cost of their machines and devices. Drugmakers develop products that bring the highest prices. It's because we have such competition, not because we lack it, that health costs are rising by 10% a year.
This is revolutionary IMO. It totally gives the lie to the "free market cures all ills" trope that the Republicans flog ad nauseam.
Christensen teamed up with two MDs to write a new book, The Innovator's Prescription, with his ideas on how to fix health care. His premise is that we're asking the wrong question: instead of "How can we afford health care?" we should ask "How can we make health care affordable?" And he has plenty of answers.
I'm reading the book now and hope to put up a more detailed review later. As I've learned to expect from Christensen, it's interesting, thought-provoking stuff.