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	<title>Adventures in telepsychiatry &#187; disruptive innnovation</title>
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	<description>A psychiatrist in a solo private practice experiments with telepsychiatry</description>
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		<title>Telepsychiatry as a disruptive innovation</title>
		<link>http://adventuresintelepsychiatryblog.patrickbarta.com/2009/11/telepsychiatry-as-a-disruptive-innovation/</link>
		<comments>http://adventuresintelepsychiatryblog.patrickbarta.com/2009/11/telepsychiatry-as-a-disruptive-innovation/#comments</comments>
		<pubDate>Thu, 05 Nov 2009 13:40:24 +0000</pubDate>
		<dc:creator>patrickbarta</dc:creator>
				<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Clayton Christensen]]></category>
		<category><![CDATA[disruptive innnovation]]></category>

		<guid isPermaLink="false">http://adventuresintelepsychiatryblog.patrickbarta.com/?p=116</guid>
		<description><![CDATA[Clayton M. Christensen defines a disruptive innovation as an innovation that improves a product or service in ways that the market does not expect, typically by being lower priced or being designed for a different set of consumers. Innovations meeting the first part of the definition are called &#8220;low end innovations,&#8221; while innovations meeting the [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://en.wikipedia.org/wiki/Clayton_M._Christensen">Clayton M. Christensen</a> defines a <a href="http://en.wikipedia.org/wiki/Disruptive_technology">disruptive innovation</a> as an innovation that improves a product or service in ways that the market does not expect, typically by being lower priced or being designed for a different set of consumers. Innovations meeting the first part of the definition are called &#8220;low end innovations,&#8221; while innovations meeting the second part of the definition are called &#8220;new market innovations.&#8221; I think telepsychiatry meets both aspects of Christensen&#8217;s definition. Telepsychiatry certainly has the potential to be lower priced&#8211;certainly some of the overhead associated with offices and the transaction costs of face-to-face visits could be eliminated. Not only that, it meets the needs of many potential patients who may not be well served by the current system:</p>
<ul>
<li>Patients in rural areas,</li>
<li>Patients who have limited mobility,</li>
<li>Patients who might feel embarrassed to be seen coming to a psychiatrist office,</li>
<li>Patients who have caretaker roles, like parents with young children or people caring for elders,</li>
<li>Patients who are unmotivated to travel, like some patients with depression,</li>
<li>Patients with busy schedules, or with unconventional ones, and</li>
<li>Patients who travel a great deal,</li>
</ul>
<p>just to name a few examples.</p>
<p>The importance of disruptive innovations from a business point of view is that disruptive innovations tend to not to be as disruptive to customers as to the companies that supply the technology that is replaced by the disruptive innovation. For example, consider digital photography versus film. Does anyone, except some photography enthusiasts, even use film anymore? Although the early digital cameras were designed for a small set of customers like telejournalists (a &#8220;new market innovation&#8221;), the prices quickly came down to the point that they were much cheaper to use than film. True, the quality of the first digital cameras wasn&#8217;t anywhere as good as film (&#8220;low end innovation&#8221;), but digital picture quality swiftly got better and better and is now good enough for 99% of the photography market. Kodak, a company with a good reputation in the old analog photography market, never knew what hit them and their business revenues sank, never to recover.</p>
<p>In Christensen&#8217;s latest book, <a href="http://www.amazon.com/Innovators-Prescription-Disruptive-Solution-Health/dp/0071592083">The Innovator&#8217;s Prescription</a>, he predicts that telemedicine will be one of three highly disruptive innovations that will change the way primary care medicine is delivered. I agree with him that this is likely to be true, but Christensen&#8217;s book, like much of the current discussion on health care, doesn&#8217;t say very much about mental health, and that&#8217;s too bad. A <a href="http://health.usnews.com/articles/health/healthday/2009/08/05/us-spending-on-mental-health-care-soaring.html">recent article</a> in U.S. News &amp; World Report points out that the rate of increase of U.S. spending on mental health went from $35 billion in 1996 to $58 billion in 2006, the fastest rate of increase of any health category. For comparison, the cost of cancer care in 2006 was also $58 billion, asthma costs were $51 billion, and trauma care was $68 billion. $58 billion/year is a big market, and even if telepyschiatry makes a small change in the way mental health care is delivered, that translates to a lot of money.</p>
<p>In a future post, I&#8217;ll talk about some of the ways telepsychiatry will disrupt mental health services.</p>
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