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.

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