Disruptive innovation and EU health policy

Abstract

The two main policy issues are incentives for disruptive innovation and adoption and diffusion of such innovations. The first policy issue involve what economists call incentives for dynamic efficiency. How do we create incentives for development of valuable new technologies? Are the current incentives in favour of incremental or radical innovation (halfway technology) rather than disruptive innovation? Should more research be put into basic understanding of the disease, rather than the development of expensive hafway technologies? What is the role of health policy for the direction of innovation? Do reimbursement systems favour half way technologies? What about other health policies? Similar policy questions could be asked about adaptation and diffusion of technologies. One example is issues related to personalized medicine; do we need large scale public investment in testing, or should this be left to the market for individual decisions. The literature on diffusion of medical technologies offers a theoretical framework for further discussions. The classic reference is Rogers and many studies have been published using his model, and it may be a start to understand the specific issues related to diffusion of disruptive innovation [8]. Don Berwick is usually an interesting observer of the medical market place, and his review from 2003 may provide further insight [9]. Christensen notes how “strong institutional forces fight simpler alternatives to expensive care, because those alternatives threatens their livelihood.” He claims that this (monopolistic?) behaviour is not in the interest of the industry, and advocate opening up the market to competition. However, it is not obvious how competition should be introduced to support development of health care systems towards the dual goals of efficiency, both static and dynamic, and equity in health and health care delivery [10]. Christensen singles out four specific solutions to the present crises for the US health care system; (1) create—and then embrace—a system where the physicians skill level is matched to the level of the medical problem, (2) invest less money in high-end complex technologies, and more in technologies that simplify complex problems, (3) create new organizations to do the disrupting and (4) overcome the inertia of regulation. All four types of solutions may be relevant from a European perspective as well. Even if many European countries have developed further than the US on point one, support of self care and primary care and substitution of tasks between doctors and nurses, there are a number of issues related to innovation for the optimal use and training of health care professionals, not only physicians. The second point does not specify who is investing the money, but also in Europe it is mainly the private sector that invests in development of new technologies, and the public sector supports basic research. Private–public initiatives like IMI are under way, but creating the right incentives for investments in the desired type of technologies is a complicated process, where countries and firms collaborate and compete at the same time. It is well known that it is difficult to do new things in old institutions. But creating new institutions, and dismantling old institutions, is a tedious process and not accomplished over night. It is noticeable that the purchaser–provider split instituted in many health care systems, has taken decades of learning by doing (also mistakes) to create and develop. Changing regulation seems the easiest, but the legislative process needed to change regulations takes time, and can easily be delayed by interest opposed to the changes.