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Destruction as Innovation

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Written by: Denis Storey

Everyone’s either looking back or looking ahead this time of year.

Especially those of us in the media who are as eager to trumpet our past success stories as we are to show you how wise we are when we tell you what’s going to happen next.

(Don’t worry; our own version of this will be appearing soon.)

Forbes jumped on the bandwagon early this year with its “Top Ten Healthcare Quotes For 2014” and, to almost no one’s surprise, roughly half of them touch of health care reform. That number’s even larger if you lump digital health in there, as well.

My second favorite quote in the piece – because I’ve already written way more than I meant to about Hobby Lobby – is one from Aetna CEO Mark Bertolini.

“Not too far away from now – in the next six to seven years – 75 million Americans will be retail buyers of health care,” Bertolini told HIMSS14 attendees back in February. “And they’ll come to the marketplace with their own money and either a subsidy from their employer or a subsidy from their government. And it doesn’t much matter – they’ll be spending their money.”

This is an incredibly revealing quote, which speaks to a reform of health care funding in this nation not necessarily predicated on the involvement of the federal government. Although there’s little doubt the feds will always have their hands in that pie. But it’s his conclusion that should send spines tingling across the old guard of the benefits business.

“So Aetna’s going to have two businesses: One is going to be around ACOs enabling the provider system and the other will be not only creating but driving a consumer healthcare experience because we’re that close,” Bertolini declared. “Connecting the two and [then] standing back and getting out of the way. [We are] creatively destroying the current business model to enable a new one that will have an impact on our healthcare costs.”

That’s right, the chief executive of one of the country’s biggest health insurance carriers just said his company is about to “creatively destroy the current business model.”

As frightening as it sounds on first read, it makes a lot of sense, especially if you apply Darwinian theory to economics. There’s no way to supplant the status quo without first getting rid of it. You’re either the Neanderthal or the homo sapien.

With that in mind, next week we’ll take a closer look at another industry facing a similar seismic shift.

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