Hi.
I'm Regina Herzlinger.
Call me Reggie.
Everybody calls me Reggie.
I'm a professor at the Harvard Business School
and I've been teaching a course on how to innovate
in health care for about 30 years.
I've had thousands of graduates from all over the world.
I'm so proud of them.
Many of them have innovated health care, but there's still so much opportunity.
So health care is gigantic.
It's about $3 trillion in the US.
So what is $3 trillion?
Who can imagine what that is?
So that's the size of the GDP of China.
That's just the US health care system.
And the rest of the world is just about as big.
So $6 trillion.
$6 trillion of waste.
It is among the most wasteful sectors in the world.
In fact, health care has negative labor productivity.
What that means in English is every extra dollar or euro that you stick
into health care diminishes the GDP.
Certainly not what we want.
Then its quality.
Who knows?
Totally reputational.
So when you go to the store and you buy a yogurt,
you take this little package of yogurt and you know so much about the yogurt.
First of all, you know its price.
Do you know the price of anything in the health care?
Very much doubt it.
Secondly, you know a lot about the quality of the yogurt.
How much calcium does it have, how many calories
does it have, how much protein does it have.
So you know pretty much what you want to know about the yogurt.
How about when you go to your doctor?
How about if you're really sick and you need a mastectomy or if you're a guy
and you need a prostatectomy?
What do you know?
You don't know anything.
So quality is a problem.
Don't get me wrong, we've got great doctors, we've got great hospitals,
we've got great technology.
But how do we know how great they are?
Everybody can't be great.
So that's another problem in health care.
And isn't it ironic?
I know everything I want to know about a trivial purchase like my yogurt,
but when it comes to my health care, I don't know anything.
Third problem is access.
So even in the United States, the richest country in the world,
currently, as I speak, out of our 330 million people,
we have 50 million people who don't have health insurance.
And even if our health care reform law kicks in,
we'll still have 20 million people without health insurance.
All over the world, people lack health insurance.
In fact, the Chinese are great savers and every good thing
has a bad thing associated with it.
Good thing, they save, bad thing, they don't spend their money.
Most economies rely on consumption to keep the economy going.
And when the Chinese don't spend money but save money,
ironically, they dampen the economy.
So why are they such great savers?
They don't have health insurance.
And they're worried that if they get sick, how will they pay for it?
So they save.
So we have a lot of uninsured.
Many developing countries have virtually no health insurance.
And even countries that allegedly have health insurance
don't really have health insurance.
So if you're in the UK, everybody has health insurance.
Does everybody have equal access to care?
No.
If you're poor, if you're not assertive, if you
don't look like you're going to sue, if you're not connected,
if your uncle or your aunt isn't a doctor or a nurse,
you go to the back of the line.
Now, I've got to give the people in the UK a lot of credit.
They keep studying this problem.
Most governments would bury it and say no problem.
But they keep studying it.
And decade after decade, just the mere fact of having insurance
doesn't mean you have access.
So lots of opportunities.
We've got to control the costs of health care.
Virtually every developed country in the world,
as the GDP grows like this, the cost of health care grows like that.
And because it has negative productivity,
that's not good for the GDP.
We've got issues with quality.
Namely, we don't know how good it is.
And then thirdly, even with countries that
have health insurance for everybody, doesn't really mean everybody.
It means if you look like you're going to sue,
if you know somebody in the health care system,
you get different kind of treatment from people who don't know.
These are all problems, but they are all opportunities.
Opportunities to make health care cheaper.
Opportunities to standardize and measure the quality of health care.
Opportunities to increase access so that everybody
can access the same quality of care.
So I hear about people with ideas about how to make it better.
Day in, day out, tons of ideas.
Telemedicine, new drugs, new devices, new computer programs,
new ways of delivering care.
Tablets so that people who have elder loved ones
can write down all the information.
Concierge medicine.
Kinds of offering.
So if you need an appointment, you don't have to stand on the line forever
on the phone, you can do it via your PC.
Ideas, ideas, ideas.
But you know what?
Most of these ideas never come to fruition.
And if they do, many of them, all too many of them, fail.
So here's what we're going to do.
We're going to look at a way of analyzing whether an innovation is
likely to succeed or likely to fail.
And we're going to do this with an analytic framework.
And then once we've determined whether an innovation is likely to succeed,
we're going to look at the elements of the business model that
may give it a really viable business.
Now, when I say business, I don't mean for profit.
I mean any kind of entrepreneurial venture,
whether it's for profit, nonprofit, governmental, we're going to say,
does this thing have legs?
We're going to separate the wheat from the chaff.
And then once we've got the wheat there, we're
going to look at the elements that make it successful.
So I have a framework that has nine steps in it.
And we're going to systematically go through these nine steps.
And then, if you hang in there with me, and more power to you if you do,
we're going to go through a number of case
studies of different kinds of entrepreneurial health care ventures.
And we're going to keep applying this framework, this analytic framework,
can we tell the winners from the losers?
And from the winners, what are the key elements that need to be there
in order to make them successful?
So we're going to study this with these different case studies.
And they're global, they're all entrepreneurial,
they cover different kinds of innovations.
And then we have videos of these CEOs of these companies, these people who
are the key movers and shakers, and we've interviewed them.
And you're going to learn how they got to where they got.
What makes for an entrepreneur?
And when you see these people, you'll see they look like everybody else.
So what is it that made them an entrepreneur?
And then secondly, in their sector, what do they
think are the next great ideas for innovation?
I pay a lot of attention to this.
These are not only smart people, but they walk the talk.
They've really done it.
So every case study says, what should here or she do?
What should this entrepreneur do?
We're going to explore what we think they should do
and they're going to tell us what they actually did.