What Instagram and Kodak have to do with health reform

I grew up in Rochester, NY.  Statistically, this means that I probably had a family member who worked at Eastman Kodak, as the company employed over 62,000 people in Rochester at its peak.  I did, in fact, have two: my father and my brother-in-law.  My brother and I both worked there during two fun and profitable summers of our college years in the delightful “roll coating” division.  It actually paid quite well, but was miserable work.

Kodak was, at one point, the consummate American success story, dominating its market like few others. In 1976, it had a 90% market share of film, as well as 80% of cameras sold in the US.  Kodak Park, the property at the center of manufacturing once employed 29,000 employees, with its own fire company, rail system, water treatment plant, and continuously staffed medical facility.

Fast-forward to 2012, and the picture changes dramatically.  In a single year, Kodak declared chapter 11 bankruptcy, received a warning from the New York Stock Exchange that its stock was below $1/share for long enough that it was at risk of being delisted, announced it is no longer making digital cameras so as to focus on its core business: printing, and then a few weeks ago announced it was no longer making inkjet printers.  The job force in Rochester alone has gone down by nearly 90%, to an estimated 7200 employees. (All of this info came from Wikipedia, if you wondered).

Adding pain for former Kodak fans was the announcement in April of this year that Facebook was buying the photo sharing company Instagram (which employed 13 people at the time) for an estimated $1 Billion.

So how could a company so dominant be overcome by one with only 13 employees?  Didn’t the resources of Kodak give them anything better to sell than this small start-up?  And what spelled the doom of a well-proven system of photography that fueled one of the most successful companies of its time?  Was it acts of congress?  Was it passage of a photography reform bill, or Obamachrome?  Was it formation of ACO’s (accountable camera organizations), the use of the photographic centered media home, or the willingness of the government to pay photographers over $40,000 if they prove they use digital cameras in a “meaningful” way?

No, the success of Instagram at the expense of the wonderful folks up in Rochester happened because Kodak had too much at stake to embrace a disruptive technology that spelled doom to its business model.  Even if Kodak had embraced digital technology, wouldn’t they have still had to lay off tens of thousands of people in the process?  Wouldn’t they have had to stop making film, printing paper, and doing all of those tasks on which they had built a 90% market share?  The Kodak of my childhood, the one that paid for my college education, gave a canvas for Hollywood’s imagination, and inspired Paul Simon to write one of my favorite songs, that Kodak had to disappear because something better came along.

It used to be that photography was a mysterious process to most consumers.  They bought film from Kodak without understanding how it worked.  Kodak succeeded by making the process easy enough for the average person to do.  People used the camera without knowing how their pictures would turn out, sent the film off to get it magically transformed into photographs that they could show others.  Ironically, the company that literally made black boxes made billions by keeping the process a black box for most people.  Then came digital photography, cameras on phones, and eventually social media.  Now there was no need for film, no need for cameras, no place to send the photos to get developed, and even no need to be on the same continent to share pictures with people.  Technology eviscerated Kodak’s business model by removing the black box.  It wasn’t just digital cameras that doomed Kodak, making it easy to carry cameras everywhere and to share with people instantly was also needed.  Now you just take a picture on your phone (or camera) and share directly with anyone in the world.

It seems to me that this may be a way to envision health care reform.  Health care has previously been a black box to most consumers – a mysterious process by which the high priests (doctors) would perform healing through the use of their special knowledge and the wondrous healing of medications.  But unlike Kodak, health care was able to keep raising prices instead of becoming more efficient.  Now the health care industry has an economy larger than nearly all countries on this planet.  The number of people employed by this economy is staggering, and the number of businesses built off of this model of inefficiency is huge.  Imagine the damage an “Instagram of health care” could cause.

That is why I no longer feel that the solution to our problem will come from within the system: the system itself must be eviscerated for it to survive, and most systems (like Kodak) don’t see evisceration as a good business strategy.  Legislators may pretend to pursue meaningful reform, but far too many of their constituents stand to lose their jobs if they succeeded, and far too much of their campaign funds come from companies built on the old economy of waste.  Having hospitals oversee ACO’s is like putting Kodak executives in charge of laws concerning digital image sharing.

So what would the “Instagram of health care” look like?  I think it would:

  1. Rely on technology to simplify things greatly.
  2. Use social technology to cut out black boxes.
  3. Put the control of care in the hands of the people who use it.

This sounds quite familiar to me.

When I was first thinking about changing to a direct care practice, I bounced some of my ideas off of a guy sitting next to me in a plane.  He was intrigued by the conversation I was having on the phone as I got on the plane, discussing my ideas with an EMR vendor.  As opposed to the EMR vendor, this gentleman grasped the power and simplicity of the model immediately, even making a pitch to partner with me if I felt I needed help.  I deflected his kind offers, and have since lost his business card, but one thing he said has stuck with me.  ”If this is a good idea, there will be someone who opposes it.  There always is,” he said.  ”Who do you think will fight you on this?”

I was stumped.  Who would oppose a better life for doctors, better care for patients, and a huge cost savings? The answer, of course, comes clearly into focus by considering back to the demise of Eastman Kodak.  While the 60,000 + people who lost their jobs in Rochester are undoubtedly using their cameras to take pictures and sharing them over social media, the wonder of this technology came to them at a terrible cost.  Yes, the cost was necessary and inevitable, but they would have opposed it if they knew the precarious nature of their company as it sat in the crosshairs of a future company run by 13 people.

I hope I am wrong on this, but most eviscerations aren’t pretty.  Trust me on that one; I’m a doctor.

Rob Lamberts is an internal medicine-pediatrics physician who blogs at More Musings (of a Distractible Kind).

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  • Ken Leebow

    Kevin,

    As the patient, I’d like to briefly expand on your three-tier solution:

    Recently, I experienced an Achilles tendon rupture. I used technology (the Internet) to research this injury. Like most people who have never had this injury, it’s foreign turf. Here’s what I found on the Internet: scattered information.

    This is a relatively common injury and I assumed, I would find one “central” location that would educate me. This turned out to be wishful thinking.

    The new trend is “informed consent”. However, how does the patient get informed to consent? Here’s what I would like to add …

    There’s a finite number of medical issues that can occur. Of course, the scariest are cancer and heart disease. So, on the Internet, there needs to be a reliable resource that a patient can turn to. It’s already “out here” … somewhere, but it’s scattered and of course, filled with a lot of misinformation.

    *Back to my injury. In my unscientific polling, most people believe that surgery is the only alternative with an Achilles tendon rupture. Upon doing a tremendous amount of research, I learned from reputable sources that a non-operative approach provides very good results.

    By opting out of surgery, I saved a tremendous amount of money and did not have to rely on an insurance company to make a large layout either.

    Bottom line: We the patient, via technology – the Internet need a reliable place to go for the finite number of medical issues we face.

    *This is in on way meant to be medical advice. Make an informed decision with your medical professional.

    • http://doctor-rob.org/ Dr. Rob

      Amen. I find that people are very capable of finding out information like this, but do like reassurance from a physician they trust. As a physician, I benefit from this in two ways: my patients likely get better care, as they are taking a larger role and responsibility, and I also can learn new things through their research. This is “collaborative care,” which I believe has the best results and highest satisfaction for both physician and patient. The goal is to find a system that creates this scenario.

  • http://twitter.com/mattMD Matt McCord

    Amen Rob Lambert. We have been proceeding along this path of middleman managed health care for too long. It only benefits the middlemen where their is little, if any, incentive for consumers to control costs or benefit from improvements in efficiency.

    Americans need to ask themselves why there is always a crane in a hospital parking lot.

  • http://twitter.com/gcgeraci Gaspere (Gus) Geraci

    Another example? Tax simplification will never happen because there are armies of federal, state, and other employees (lawyers, accountants, etc) that would be put of out business. What if income taxes were reduced to an index card: Income X ??%= write the check.

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