Great to hear from you! Yes, I agree that innovation will be bazaar led . . . the Hello Health team and others like them will be the ones doing this. Stay tuned.

I love your metaphor choice on this. The mainstream health reform “experts” (I’ll include Clayton Christensen and coauthors in here) have long been promoting integrated systems as saviors. And yes, integrated systems have the most aligned incentives and power to move things. But Kaiser and IHC have been around for an awfully long time, and are moving absolutely glacially toward the kind of reform we need. It seems that all they care about is having incrementally better quality than everyone else, but they’re definitely not dramatically better. I think the problem is that those organizations are way too connected into the medical industrial complex “value network” that almost all other hospitals and clinics are stuck in, plus their leaders are way too culturally tied into those same systems.

So we need disruptive innovation, and I agree with you that small organizations are much more nimble at pulling this off than large ones. The only way I can see a Kaiser or Intermountain or Geissinger pull this off would be by spinning off clinics that operate completely independently and do not accept 3rd party reimbursement, and that are led by radicals such as the Hello Health folks.

Thoughtful comments – which I really appreciate. Thanks for reading.

I agree with you – I have heard the term “We are the eBay of healthcare” many many times . . . but we haven’t quite gotten there yet due to the complexity that is involved. We are, however, of necessity being taken in that direction. I am really looking forward to seeing what happens as well (and being right in the thick of it as well).

I would also be interested in your take on the X PRIZE as well as what Crossover Health is trying to do for individual consumers. You would have been a good case study given your recent interactions with the health care system. Would love to discuss at your convenience.

Would you not expect a great deal of resistance from providers (especially the average and sub-standard ones) in moving from a model where they “sell” themselves once, or at least on a fixed schedule to a large corporate entity for an extended period of time to one where they must be continually competitive and market constantly to a larger number of integrators? How would you encourage providers to participate in this new system? Or do you feel that if you could get the ball rolling, consumer demand alone would push it along?

I would be concerned how much additional overhead would be incurred on the part of the providers, as this would doubtless be passed directly to the consumer. If the Bazedral model saves each consumer 5% per hip replacement, but each provider has raised his rate 8% to cover the overhead, well, that obviously isn’t good.

I would think the “bidding” process as well would be quite interesting. Obviously with health care, you couldn’t (or certainly shouldn’t) do a straight low-bidder-gets-the-job model. I would think that an Ebay-type “seller” ranking would have to be incorporated, with a consumer able to specify the lowest ranking they are willing to accept, or a cost-ranking sliding scale. Some people also insist on special conditions in their health care professionals (i.e. certain gender, shared nationality, etc) that would need to be factored in. The number of potential variables could be rather large, but a system like this that uniformly and objectively ranked health care providers and allowed such a bidding process would be VERY powerful.

A final thought regards the virtual integration layer. This layer would need to be heavily audited in a very open way. Without transparency in this process, providers would doubtless cut deals with the integrators that insured that that provider was always the best bid.

I think this is a great idea. As someone who has spent a great deal out-of-pocket on medical expenses in the last few years, I think the potential for individual control here is fantastic.

I do enjoy that this idea does for the health care system as a whole what MyMedLab seeks to do for laboratory services. It’s a nice symmetry.

Keep up the good work (and interesting reading),

Jeremy