Sunday, March 5, 2017

A Ray of Hope for Change

Last week we concluded that basically nothing supports destructive innovation in medical education. Factors that inhibit destruction include:
  1. the incessant growth, easy access to money, and confidence that the good times will continue, 
  2. lack of competition, 
  3. comfortable and stable labor market, and 
  4. tight regulation. These factors ensure that “normal science” lives on.
But barriers to entry also inhibit creative destruction. Perhaps Uber/Lyft, Google, and Apple succeeded not because of easy access to money and fear of a downturn, or an unstable labor market and lose regulation. Maybe the key was that the old paradigm was so much less competitive. Anyone who has used Uber/Lyft clearly sees advantage over taxis. Similarly Google bested prior search [and found a way to make money via adWords] and Apple has continued to take good ideas (the GUI created by Xerox Parc) and make them great and vastly better than the competition. All of these companies were free to enter a novel market.

Here at last we have some hope. We are indeed creating new medical schools. And if you look closely they are also trying out new ideas.

So where do we look for creative destruction? New medical schools.

And what should we do? Back off on demands to “standardize” them and ensure they “conform.” Let them innovate. Let them fail. Let them compete for students. Let the employees worry that they may lose their jobs.

If left alone perhaps they will accomplish the creative destruction that medical school education needs to accomplish a paradigm shift.

Tuesday, February 28, 2017

How Else can Innovation Come to Stagnant Markets?

We’ve been discussing creative destruction theories and come to the conclusion that no matter what theory you use, there is not the proper condition for a paradigm shift in medical education. For those of us who feel that a paradigm shift in the process of medical education would be a good thing, this is indeed bad news. It means that creative destruction can’t and won’t happen. The “Normal Science” of medical education will continue unabated and unchallenged until a recession in the health care market takes place. And if the latter theory is true, destruction will only occur on the upswing AFTER the downturn. And ONLY if the recession is so bad that it instills fear that another will come. It sounds hopeless.

Perhaps other factors that enable creative destruction can take hold, say, competition. Think digital cameras from Canon and Nikon vs. the old film based ones from Kodak (which by the way had digital technology that it chose not to use). Competition pushed creative destruction. Medical schools sadly don’t compete with each other. No hope there. Strike 1.

How about unstable labor markets? A stable labor market discourages creative destruction as people stay with what they have and few are incentivized to become entrepreneurs. Although there has been some upheaval in term of PhDs at medical schools most jobs are pretty secure. That security translates again to less anxiety and less interest in and support for creative destruction. Another dead end. Strike 2.

Excess regulation inhibits creative destruction. Examples include cities that are trying to halt AirBNB and Uber with laws that were written 50 years ago, or laws that require Tesla to use dealerships. Medical education is so controlled by government regulations (OSHA, HIPAA, access rules) and systematized by non-governmental organizations that it is indeed highly regulated. Can it be that the original paradigm shift that started with the Flexner Report is now part of the problem? That is, in seeking “consistency” and “quality” we created a system that highlights banality, caution, and a lack of innovation? We thus squelched creative destruction in the process just as is seen in markets with excessive government regulation. Is the solution then to loosen standards and dissolve organizational bodies so that schools (like states in the US) can be incubators or novel ideas? Since institutions come but rarely go, this seems rather unlikely. Strike 3.


The depressing conclusion (for folks who want change to happen) is that the “creative destruction” model is stymied from action because of: 1) lack of a downturn [2 weeks ago blog], 2) lack of a fear of a downturn because of incessant growth and easy access to money [last week’s blog], and 3), no competition, a comfortable and stable labor market, and tight regulation [this week’s blog].

It makes sense. But it’s depressing nonetheless that the environment for creative destruction and subsequent paradigm shift in medical education is extremely poor.

Thursday, February 23, 2017

Let the Good Times Destruct the Status Quo

Last week I described a theory that creative destruction happens because of downturns that spur new solutions, and the lack of a downturn in the health economy is why medical education is stagnant.
An alternative model found that in fact creative destruction happens during periods of growth not recession. Think of the dot com bubble that spawned the most successful company, Google. Facebook too launched in a time of plenty. Uber arrived after the crisis of 2008 was over and has been on a tear ever sense. And now Uber is the leader in driverless cars and trucks. So an abundant IPO and M&A environment that is full of resources spawns even more opportunities for creative destruction.

Certainly health care has done nothing but grow and in several markets (e.g., Pittsburgh and UPMC) consolidation and integration and rapid growth are pretty obvious. With all that money sloshing around it should have led to enormous opportunities for creative destruction. Sure medical schools have replaced dark depressing lecture halls with windowed learning environments full of round tables and projectors. And others have built huge simulation centers with mannequins and rooms for standardized patients. But if one contrasts that with the growth of Apple and the impact of the iPhone or Google and search, it’s clear that the enormous riches of healthcare (17% of GNP and growing) haven’t translated to enormous change.

Why not?

Perhaps paranoia and fear of a recession is really the key. A history of a growth period following a recession would include a sense of anxiety (i.e, “we’ve got to be ready!”) about the potential for another recession. Without a past recession (such as we had in 2008 for real estate especially and other markets but not health care) there is no anxiety going forward. So easy or constrained flow of money is not the key to creative destruction. Money just enables such destruction when combined with anxiety about being ready to weather the next storm. And thus with medical schools and their hospitals as the top revenue generation for universities, and hospital CEOs and VPs among the highest paid executives in universities, there is little need for the health care industry to worry that the days of growth are coming to an end. And thus little reason to be hopeful that medical school education will change anytime soon.