Change we don’t need to fear…

by

Dr. Ken Buetow, BIG Health Catalyst

“The future is already here – it’s just not evenly distributed.”
– William Gibson, quoted in The Economist, December 4, 2003

There is an anxious excitement that change is on the horizon. There is little debate that change is needed. What produces the tension is the dilemma of ensuring that what is good is retained while fixing what is bad. My conservative Indiana “Hoosier” roots remind me that “If it ain’t broke, don’t fix it”. Change can cause damage as well as improvement.

The Biomedical Enterprise squarely faces this dilemma. The 21st century is commonly referenced as the “century of biomedicine”. A new generation of personalized medicine promises the delivery of the right intervention, to the right individual, at the right time. Unfortunately, tremendous barriers stand between the promise and delivery of personalized medicine. The cost of translation and development of next generation interventions is sky rocketing. Molecularly-targeted therapeutics are among the most expensive interventions available. An aging population threatens to expand the already 16% of Gross Domestic Product (GDP) spent on health care. Perverse misalignment of incentives blocks the adoption of the new paradigm.

Given the near universal recognition of the challenges faced by biomedicine why is it so difficult to adopt the practices that create solutions? Clayton Christensen of the Harvard Business School in “The Innovators Dilemma” suggests that this type of change is difficult because business practices by those successful in the current paradigm do not incentivize the necessary innovations. An example from another industry is illustrative.

In the early 1980’s “serious” computing was still performed on mainframe and mini computers. The market for these computers was small and they were sold at high price to a small numbers of institutions that could afford their high price tag, the special infrastructure need to house them, and the highly trained users who could master them. IBM was the unquestioned master of the mainframe computer world (its competitors were referred to as the “7 dwarfs”). Its approach to mainframes was common across the industry. New computers were designed by small, internal teams of highly specialized experts and composed entirely of components made within house, in this instance IBM. Mainframe and mini computers were high profit margin products.

At the time, the newly emerging personal computers (PC’s) were toys. They were sold through retail outlets and seen as consumer entertainment devices. Their most enthusiastic adopters were hobbyists and they were felt to have little practical application. They were relatively inexpensive and had low profit margins.

The “real” computer industry struggled with how to approach the PC. When projected against very well understood business models, they didn’t make sense. Existing mainframe customers had little interest in PC’s because they did not perform any functions of value. Their tiny profit could not justify investment in manufacturing or sales. The absolutely correct business analysis at the time suggested it was a distraction to invest in PCs.

Unique within the established computer industry, IBM recognized that to enter the personal computer market it would need to fundamentally alter its business strategy. First, it created a new business unit that was largely independent of existing management. This permitted the unit to explore approaches outside of “business as usual”. IBM had deep institutional knowledge of what was necessary to have a complete computing “system”. To achieve this system, it utilized a “network” model. Instead of creating all the components internally, it instead assembled “off the shelf” parts from different manufacturers. This permitted lower overhead as design and development costs were born by the external original equipment manufacturers (OEMs) and higher margins for the “orchestration” efforts performed by IBM. To make this approach work, IBM created an open architecture and defined interoperability standards for the components. It published these standards and described the “slots” available to plug components into its platform. The IBM PC transformed personal computers and the personal computer market.

The echoes of mainframe computer manufacturing can be seen in today’s biomedical enterprise. Existing, successful organizations struggle to see why they should change. Like “IBM and the seven dwarfs”, even those groups who wish to be on the innovative edge struggle to see how to make it a sustainable activity. Absolutely correct business analysis does not show how a single organization or entity can address the challenges or grab the opportunities of 21st century biomedicine.

Through the BIG Health Consortium™ we strive to accomplish the 21st century biomedical equivalent of IBM’s personal computer model. First we are considering biomedicine as a “system”. This systems approach aims identify all the parts necessary to connect discovery, translation, and care. BIG Health also utilizes a network model. Instead of creating a new, monolithic organization that has all the parts, BIG Health is orchestrating “OEM contributions” from the multiple stakeholders within the biomedical ecosystem. This network model re-aligns incentives and balances contributions.

Like the IBM PC this ecosystem includes novel innovators in biomedicine. Who had ever heard of Microsoft before the IBM PC? For example, the BIG Health Consortium™ contains groups such as personal genomics companies that uniquely target consumers and are dismissed by some members of the biomedical establishment as “entertainment”. Sound familiar?

The BIG Health OEM network model is enabled by open architecture-based interoperable informatics capability – the “BIG” in BIG Health. BIG connectivity “unlocks” data. The BIG Health Consortium™ permits work to be performed through virtual, on-demand, “cloud” organizations.

Finally, while the BIG Health Consortium has the capacity to become a disruptive innovation, it is not by definition disruptive. Like the IBM PC effort it can be explored in parallel to the existing, successful paradigms in biomedicine. It cost efficiently recycles existing capabilities in novel ways. BIG Health is a way of living in the future without leaving the present.

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