Through the Lens of Disruptive Innovation: Why Direct is a Hit and PCAST is an Outcast

Vince Kuraitis

First published 4/18/11 on e-Care Management

Regular readers know that I find Professor Clay Christensen’s theory of disruptive innovation to be a useful lens to explain industry evolution. Let’s look at two recent health IT initiatives and see why one is working and the other is stalled.


Characterizing the Direct Project — why it’s working:

  1. A low-end industry disruption. The Direct Project takes transactions that are routine but inefficient — fax, telephone, mail exchanges between health care providers — and specifies standardized, Internet based technologies to conduct them electronically.
  2. Incremental change — a few specified transactions.
  3. Bottom up — ONC hired a capable project manager (Arien Malec) who choreographed a small team of volunteers working under short deadlines.
  4. Implementing “better, faster, cheaper” technology on the fly (i.e., Internet transactions replace fax, phone).
  5. Under the radar — invoking little response from incumbents. Direct was seen as focusing on transactions that were peripheral to the core EHR.


Characterizing the recommendations of the PCAST report — why it’s stalled under bureaucratic inertia:

  1. A direct frontal assault on the mainstream architecture and technology of today’s health IT vendors and customers — calling for the rapid replacement of billions of dollars of investment in current HIT.
  2. Systemic change — rethinking HIT architecture from the ground up.
  3. Requiring top-down governmental actions to reform an industry. Invoking polarized political responses — “PCAST is socialist.”
  4. Requiring an ONC workgroup to spend 3 months simply to conduct hearings and evaluate possible next steps.
  5. Invoking organized, persistent and uniform denouncements by many industry incumbents and their trade associations. The PCAST report became a political piñata. Many of the objections to the PCAST report were couched in terms of reducing quality and patient safety.

There are some great lessons here.

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