Creative Destruction in the Field of Healthcare
To what extent is the technological advancement in the field of healthcare accelerating creative destruction and bringing about a new era of telemedicine?
Keywords:gig economy, telemedicine, creative destruction, healthcare, Joseph Schumpeter, HMO, PPO
This research paper will cover in detail the evolution of telemedicine over time and its prospects while explaining the theory of creative destruction. In the past, healthcare involved medical professionals delivering specialized expertise and care to patients. Throughout most of the history of healthcare, medical care was produced and administered by a small group of professionals. Under that traditional approach, medical services were provided only through in-person consultations and exclusively in facilities that were specifically designated for the purpose of in-person consultations—such as hospitals, clinics, and private offices of medical professionals. Over time, healthcare has become more affordable and the convergence of the Information Technology sector has revolutionized the way medicine is dispensed to patients (Thimbleby). We are seeing the dawn of a new model of healthcare delivery, where in-person consultations at medical facilities are replaced by remote consultations and monitoring of the patient (Coughlin 1). Joseph Schumpeter devised the term 'creative destruction' in 1942, which he described to be a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one” (Schumpeter 83). This research paper will be discussing the current structure and the inefficiencies of the healthcare industry. Moreover, it will elaborate upon how telemedicine might eliminate payment models like the Fee to Service Model and how the incentives different insurers provide will be altered. Overall, this paper explores how telemedicine can possibly take over the medical industry thanks to its economic benefits and convenience.
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