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?


  • Shreya Tandon American School of Bombay
  • Giorgi Areshidze Claremont McKenna College



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.


Download data is not yet available.

Author Biography

Giorgi Areshidze, Claremont McKenna College


References or Bibliography

Adler, David. "Schumpeter’s Theory Of Creative Destruction.", 2019, destruction.html.

Bai, Chunxue. “Cell phone based telemedicine - brief introduction.” Journal of Translational Medicine vol. 10, Suppl 2 A47. 17 Oct. 2012, %2C%20Cell%20phone%20based,to%20take%20medicine%20or%20measurement.

Bentley, Tanya G.K. et al. "Waste In The U.S. Health Care System: A Conceptual Framework." Milbank Quarterly, vol 86, no. 4, 2008, pp. 629-659. Wiley, doi:10.1111/j.1468-0009.2008.00537.x.

Commission On A High Performance Health System | Commonwealth Fund." Commonwealthfund.Org, 2012, health-system.

Coombs, Bertha. "Telehealth Visits Are Booming As Doctors And Patients Embrace Distancing Amid The Coronavirus Crisis." CNBC, 2020, the-coronavirus-crisis.html.

Coughlin, J.F. "Connected Health and the Creative Destruction of Healthcare." AgeLab 06-

, 2006. Cambridge, Massachusetts: Massachusetts Institute of Technology. %20Cell%20phone%20based,to%20take%20medicine%20or%20measurement.

Damico, Anthony et al. "Key Facts About The Uninsured Population." KFF, 2019,

Facher, Lev. "Trump Administration Loosens Telehealth Regulations To Combat Coronavirus." STAT, 2020,

Farr, Christina, and Ari Levy. "Digital Health Stocks Are Surging Because 'Suddenly Now We're In The Future.' CNBC.Com, 2020,

Freedman, Max. "Healthcare Employer And Employee Costs In 2020 – Business.Com." Business.Com, 2020,

"Frequently Asked Questions By Providers." Beam Health,

The Future Of The Public's Health In The 21st Century. National Academies Press, 2003.

Hayes, Adam. "What You Should Know About Health Maintenance Organizations (Hmos)". Investopedia, 2019,

Health Resources and Services Administration. What is telehealth?

"Healthcare Access In Rural Communities Introduction - Rural Health Information Hub." Ruralhealthinfo.Org, 2020,

"Historical | CMS.” Cms.Gov, Reports/NationalHealthExpendData/NationalHealthAccountsHistorical#:~:text=The%20 data%20are%20presented%20by,spending%20accounted%20for%2017.7%20percent.

Komlos, John. "Has Creative Destruction Become More Destructive?" The B.E. Journal Of Economic Analysis & Policy, vol 16, no. 4, 2014. Walter De Gruyter Gmbh, doi:10.1515/bejeap-2016-0179.

Kopp, Carol. "Creative Destruction". Investopedia.Com, 2019,

Kuziemsky, Craig et al. "Role Of Artificial Intelligence Within The Telehealth Domain." Yearbook Of Medical Informatics, vol 28, no. 01, 2019, pp. 035-040. Georg Thieme Verlag KG, doi:10.1055/s-0039-1677897.

Landi, Heather. "Telemedicine Companies See Funding Boom Of $788M In Q1". Fiercehealthcare, 2020,

Landi, Heather. “Trump administration opens up access to telehealth services during coronavirus outbreak.” Fierce Healthcare, March 17, 2020, telehealth-services-during-coronavirus-outbreak

Martinez, Julia et al. "Improving The Health Care System: Seven State Strategies". Ncsl.Org, 2016,

Nehk, Kristen. "What Is Fee For Service In Healthcare?" Prognocis EHR, 2018,

Radu, Sintia. "Countries With The Most Well-Developed Public Health Care Systems." US News, 2020,

Schumpeter, Joseph A. Capitalism, Socialism and Democracy, Harper & Row." New York, 1942.

Siwicki, Bill. "Comparing 11 Top Telehealth Platforms: Company Execs Tout Quality, Safety, EHR Integrations." Healthcare IT News, 2017, company-execs-tout-quality-safety-ehr-integrations.

Siwicki, Bill. "Telemedicine During COVID-19: Benefits, Limitations, Burdens, Adaptation." Healthcare IT News, 2020, limitations-burdens-adaptation.

Siwicki, Bill. "UPDATED: A Guide To Connected Health Device And Remote Patient Monitoring Vendors". Healthcare IT News, 2020, patient-monitoring-vendors.

Teladoc Health, Inc. "Teladoc Health Sees Daily Virtual Medical Visits Up 50% In Past Week". Globenewswire News Room, 2020, Health-Sees-Daily-Virtual-Medical-Visits-Up-50-in-Past-Week.html.

"Telehealth: A Case Study In Disruptive Innovation." Nursing.Ceconnection.Com, 2014,

"Telehealth Basics - Why Telemedicine." American Telemed,

"Telehealth Companies Who Are Disrupting The $10 Trillion Healthcare Industry." Prnewswire.Com, 2020, the-10-trillion-healthcare-industry-300994118.html.

"Telehealth: Helping Hospitals Deliver Cost-Effective Care." American Hospital Association.Org, 2016,

"Telehealth: Technology Meets Health Care". Mayo Clinic, 2020, 20044878#:~:text=Telehealth%20is%20the%20use%20of,or%20support%20health%20c are%20services.

"Telemedicine In Rural Areas: What Is The Connection?" Telemed2u, 2018,

Thimbleby, Harold. “Technology and the future of healthcare.” Journal of public health research vol. 2,3 e28. 1 Dec. 2013, doi:10.4081/jphr.2013.e28.

Turner-Lee, Nicol et al. "Removing Regulatory Barriers To Telehealth Before And After COVID-19". Brookings.Edu, 2020, and-after-covid-19/.

Wengle, E. "Are Marketplace Premiums Higher In Rural Than In Urban Areas?" RWJF, 2018,

"Will My Insurance Cover Telemedicine Or Telehealth Visits?" https://www.Sunshineclinic.Org/, 2020, insurance-cover-telemedicine-or-telehealth- visits/#:~:text=There's%20no%20set%20standard%20for,make%20virtual%20care%20w idely%20accessible.

Young, Pierre, and Olse, Leigh Anne. The Healthcare Imperative: Lowering Costs And Improving Outcomes: Workshop Series Summary (Learning Health System Series). National Academies Press, 2010, pp.

Zarabozo, Carlos. "Milestones In Medicare Managed Care." Pubmed Central (PMC), 2000,



How to Cite

Tandon, S., & Areshidze, G. (2022). 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? . Journal of Student Research, 11(1).



HS Research Projects