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How Software Innovation Can Cause Creative Transformation Of The Dysfunctional Healthcare System

Stanley Feld M.D.,FACP,MACP

Joseph Schumpeter (1883-1950) begins his “The Theory of Economic Development with the idea of circular flow.

 “If any innovations and innovative activities are excluded you end with a “stationary state.”

Schumpeter's theory is that “the success of capitalism will lead to a form of corporatism. In turn corporatism will foster values hostile to capitalism. He contends this is especially true among “intellectuals.”

The intellectuals and the social climate must allow entrepreneurship to thrive. If not capitalism will be replaced by socialism in some form.”

 The hero of his story is the entrepreneur.

We are seeing this now as corporations are trying desperately to hold on to their power using obsolete technology and suppressing entrepreneurship with the government’s help.

There are a couple of bills (like PROTECT IP  and  Stop Online Piracy Act) coursing through Congress that if enacted threaten the entire Internet only to protect outmoded business models of the movie and music industries.

The Internet has provided people with information, a choice and a voice. It has stimulated entrepreneurship and the current software revolution.

The government is making a big mistake in attacking freedom. I do not think it will get away with it because of the power of the Internet.

The hero of my story about "Repairing the Healthcare System" will be the software entrepreneur.

Technology has caused legacy business models to be replaced by innovative software models. These innovative software models have reduced costs and provided more choice for consumers at a cheaper price.

 Everyone agrees that healthcare costs are out of control and are unsustainable. The corporate takeover of healthcare and medical care is leading to the inability of physicians to relate to and treat patients as patients should be treated.

The healthcare system is heading toward collapse. Obamacare is hastening the collapse as President Obama tries to work his way toward a socialized medical system.

America cannot afford socialized medicine. A paradigm shift must take place. This shift will occur as a result of innovative software. The challenge is who will get there first.

Britain, Canada and Europe’s socialized medical systems are failing financially.  These countries are changing their healthcare systems from government controlled socialized systems to private systems.

Entitlement healthcare systems do not work because patients are not responsible for their healthcare dollars. Patients overuse the system because they are not responsible for payment. 

 When governments are overextended financially they restrict access to medical care.

 Secondary healthcare stakeholders are fighting to maintain the “stationary state” because they receive 90% of the healthcare dollars.

Secondary stakeholders use a hollow excuse for maintaining control over the healthcare dollars. They maintain that consumers are too stupid and too powerless to take care of themselves.

Software companies are trying to improve the healthcare system. They have failed because they are focused on the wrong customers.

Secondary stakeholders are a giant hairball between the patient/ physician relationship. This hairball must be disrupted.

Much of the software necessary to disrupt the hairball is available. It is not focused for the benefit of patients and physicians.

An innovator is going to come along and disrupt this hairball just as Steve Jobs disrupted the music industry.

Dis-intermediating software can only become viral and effective if it enhances the patient physician relationship.

Consumers are starting to realize that they must become responsible for their own medical care and control their healthcare dollars. The government is too unreliable.

Patients are the customers/consumers of heaslthcare. Consumers must learn to manage their health and medical care dollars wisely. They must be provided with education and financial incentives to become responsible for their own health and healthcare choices. 

What are the areas in which innovative software can dis-intermediate the failing structures in the healthcare system?

  1. Ideal Electronic Medical Record.
  2. Ideal Medical Saving Account.
  3. Chronic Disease Management.
  4. Tort Reform
  5. Patient Education as an Extension of Physicians Care.
  6. Integrated Care Between Family Practitioners and Specialists.
  7. Patient Responsibility: Health and Healthcare Dollars.
  8. Consumer Driven Healthcare.

No one likes to be forced to do anything. President Obama’s Healthcare Reform Act is forcing patients and physicians to do things they do not understand or do not approve of.  Americans are refusing to buy into his system.

In the words of the great singer/philosopher  Leonard Cohen, ”Everybody knows.”




“Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic.

A software innovator with a prepared mind between the age of 20-50 years old is going to come along and initiate a software revolution in healthcare. It will improve medical care for all. It will decrease healthcare costs and increase patient satisfaction. It will restore the patient physician relationship.

I will be happy to help anyone who will listen.


The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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