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Negative Innovation: Helping Reduce Health Care Technology Costs

At the recent Stanford Center for Cardiovascular Technology Annual Symposium 2010, hosted by Stanford University's Peter Fitzgerald, MD, PhD, and Alan C. Yeung, MD, one of the newest buzzwords in medical device development was "negative innovation". Increasingly, executives, particularly at big companies, are coming around to the notion that in the future, a product development model that posits that incremental device innovation will continue to be rewarded with premium pricing and wide adoption won't hold anymore. Instead, they argue, in a world in which health care costs are scrutinized ever more closely and initiatives like comparative effectiveness bring cost and quality into the same discussion, the US health care system will begin to favor a new kind of value proposition: devices that reduce costs, while delivering equivalent, and perhaps in some cases even slightly worse, outcomes.

The newest buzzwords in medical device development: negative innovation. Increasingly, executives, particularly at big companies, are coming around to the notion that in the future, a product development model that posits that incremental device innovation will continue to be rewarded with premium pricing and wide adoption won't hold anymore. Instead, they argue, in a world in which health care costs are scrutinized ever more closely and initiatives like comparative effectiveness bring cost and quality into the same discussion, the US health care system will begin to favor a new kind of value proposition: devices that reduce costs, while delivering equivalent, and perhaps in some cases even slightly worse, outcomes.

Some have described the phenomenon as a shift from innovation to value – value expressed here not as clinical value,...

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