Regina Herzlinger, the Nancy R. McPherson Professor of Business Administration, has been studying the health care sector for nearly half a century. In that time, she has seen significant innovation in the field—and she has also seen the powerful sway of the status quo, which has led to the slow adoption of some cost-reducing, consumer-facing, and life-saving technology innovations. Herzlinger—dubbed the “godmother of consumer-driven health care”—has helped to shepherd countless new health care products to market. But she’s never seen the health care landscape change at the pace that has occurred in 2020. “COVID-19 is a dreadful pandemic,” she says in the following discussion, “but it has turned everything upside down in the health care sector in some good ways.”

What are the most interesting digital health care innovations to emerge in recent years?

I have been watching wearable sensors, like smart watches, and telemedicine, which is a companion to these sensors. Both have become more powerful and more acceptable to consumers and to the health care industry, which has resisted these innovations for a long time. I am also sanguine about implantable sensors, which can monitor symptoms of diseases like diabetes or congestive heart failure. Before the implantable congestive heart failure monitor, for example, we had very poor diagnostic tools to alert the need for ASAP therapy, but these sensors can now alert providers when therapeutic treatments are needed.

What has driven these trends?

Consumers are busy. It used to be that we called health care consumers “patients,” as in “wait and be patient.” But hard-working consumers are demanding convenience. We’ve seen that in the growth of retail medical centers, too. If they are conveniently located, people will take care of minor medical issues, such as an ache, or a mole that might be cancerous. Most people also prefer them to hospitals overwhelmed with COVID-19 patients. With more two-career families and single head-of-household families, with more people who are taking care of both their children and their elderly loved ones, it is clear that retail medical health care innovation is going to become a very powerful movement. It will be especially useful for coordinating monitoring and some therapy for people with chronic diseases or disabilities who are frequently lost among the cracks of our present fragmented system.

How has the pandemic changed the health care sector?

We have seen a much broader acceptance of telemedicine and changes in who can deliver telemedicine, where it can be used, and, most importantly, equality of pay between in-office visits and telemedicine visits. In the past, providers were paid at much lower rates for telemedicine visits. That sounds fair, but telemedicine is actually expensive. It can cost tens of thousands of dollars a year for the necessary equipment. With COVID-19, there has been such a need—who wants to go to the hospital for a sore throat in a pandemic? In addition, what hospital wants to see them?

The acceptance of telemedicine has also led to a boom in wearable sensors. Apple came out with an app that measures how oxygenated your blood is. That’s a very important marker for COVID-19. When they debuted, smart watches seemed like sort of silly pieces of technology people used to count 10,000 steps, but they are becoming very important in giving early warning signs about dangerous problems with our bodies.

Do you expect these changes will persist?

I think there will be enormous consumer backlash if we limp back to the old days when you could only get access to telemedicine if you were in a prison or in a rural area, and only doctors who worked in your state could provide it and they would be paid $3.50 (I am kidding!) for the telemedicine visit. The politicians, doctors, and hospitals who once pulled the power of the status quo to suppress telemedicine are all going to face a new force, which is consumers saying, “This makes my complicated life so much better.”

Will the health care sector embrace artificial intelligence?

I think it could be a powerful tool for routinizing the practice of medicine. Artificial intelligence digs through mounds and mounds of data and finds where medical practice is great and where it’s not so great. However, I am dubious about its quick acceptance by the medical profession. If I’m a doctor who is world renowned for how I operate on a shoulder, and AI tells me that what I’m doing is not best in class, am I going to change? I don’t think so. It’ll be a tough battle.

What is the most important lesson for aspiring health care entrepreneurs?

Frequently, innovators are so in love with their innovation that they believe if they build it, the health care sector will come. But this is a highly regulated, technology-intensive industry with third-party payers, not a retail industry. It’s a very unusual sector and you need to know a lot about how it works. How do you align your innovation with that environment? Can you provide enough data so that payers and providers feel comfortable about adopting your innovation? Can you make it the standard of care, meaning it is something doctors have to do? Can you get Medicare to pay for it?

The MBA elective course I teach, Innovating in Health Care, supports and enables innovators. It helps students—not just MBA students, but also those from Harvard’s medical school, engineering school, and public policy and health school—understand how to disseminate their health care innovation ideas. If they are very serious about it, the second course, a field-study course, enables them to spend the entire term working on that idea with help from successful entrepreneurs in a variety of fields.

What do you see for the future of the health care sector?

Lately, I’ve become optimistic. It’s a big struggle to turn from an industry in which the suppliers are dominant and dictate what happens to an industry where the consumers have a voice. These new technologies have empowered consumers to monitor and manage their own diseases.

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