Disrupting Incrementalism in Health Care Innovation

Abstract

To build enabling innovation frameworks for health care entrepreneurs to better identify, evaluate, and pursue entrepreneurial opportunities. Powerful frameworks have been developed to enable entrepreneurs and investors identify which opportunity areas are worth pursuing and which start-up ideas have the potential to succeed. These frameworks, however, have not been clearly defined and interpreted for innovations in health care. Having a better understanding of the process of innovation in health care allows physician entrepreneurs to innovate more successfully. A review of academic literature was conducted. Concepts and frameworks related to technology innovation were analyzed. A new set of health care specific frameworks was developed. These frameworks were then applied to innovations in various health care subsectors. Health care entrepreneurs would greatly benefit from distinguishing between incremental and disruptive innovations. The US regulatory and reimbursement systems favor incrementalism with a greater chance of success for established players. Small companies and individual groups, however, are more likely to thrive if they adopt a disruptive strategy. Disruption in health care occurs through various mechanisms as detailed in this article. While the main mechanism of disruption might vary across different health care subsectors, it is shown that disruptive innovations consistently require a component of contrarian interpretation to guarantee considerable payoff. If health care entrepreneurs choose to adopt an incrementalist approach, they need to build the risk of disruption into their models and also ascertain that they have a very strong intellectual property (IP) position to weather competition from established players. On the contrary, if they choose to pursue disruption in the market, albeit the competition will be less severe, they need to recognize that the regulatory and reimbursement hurdles are going to be very high. Thus, they would benefit from seeking market opportunities that are large enough to warrant greater regulatory and reimbursement risks.