The rise in U.S. health-care costs, to nearly 18% of GDP today from around 6% of GDP in 1965, has alarmed journalists, inspired policy wonks and left patients struggling to find empathy in a system that tends to view them as "a vessel for billing codes," as the technologist Dave Chase has put it.
Enter Jonathan Bush, dyslexic entrepreneur, nephew of 41, cousin of 43. From his initial encounter with health care, as a 21-year-old ambulance driver in pre-Katrina New Orleans, Mr. Bush has seen both dysfunction and opportunity. In "Where Does It Hurt?" he asks whether, in the case of the chaotic American health-care system, there might still be a chance "for someone to offer great service, low prices, and convenience." The answer is an impassioned "yes"—if entrepreneurs can navigate around obstacles put in place by bloated incumbents and tap into the transformative power of the marketplace.
After a stint as an Army medic and a post-college job as a management consultant, Mr. Bush hit upon his first idea for a startup—a business that would make childbirth more personal and less costly by allowing midwives to provide the bulk of care. He refined his plans during two years at Harvard Business School and then—in partnership with Todd Park, now President Obama's chief technology officer—set up shop as Athena Women's Health.
While the business was soon attracting patients, the team struggled to turn a profit. For starters, the complexity of medical billing made it hard to figure out how much money they were bringing in—a problem they solved by building their own software. Worse, pregnant patients—enticed, Mr. Bush says, by better care—would switch to health plans that covered Athena, then switch back to their previous insurer after delivery, sticking the insurer covering Athena with the bill; most insurers quickly learned their lesson and removed Athena from their plans.
Unable to save the sinking business, Mr. Bush and his partners, in the dot-com boom of 1999, executed a pivot: They chose to emphasize their software and their ability to perform the administrative chores that, in Mr. Bush's words, "doctors hated—and sucked at." The reborn company, Athenahealth, raised venture capital and went public in 2007; today, it's a $4.3 billion company and a respected player in the revenue-management and medical-records business.
Given such authorial experience and pedigree, "Where Does It Hurt?" might have devolved into a puffy promotion for Athenahealth or a partisan diatribe. Instead, Mr. Bush—with the help of veteran business journalist Stephen Baker—has managed to produce an inspirational call for disruptive change and entrepreneurial action.
Not surprisingly, Mr. Bush touts technology as a driver of change. It has revolutionized the way we shop for books and select hotels, but health-care delivery has been stubbornly resistant. Mr. Bush notes that the number of people supporting each doctor has climbed to 16 today from 10 in 1990—half of whom, currently, are administrators handling the mounting paperwork. Astonishingly, as Mr. Bush observes, the government had to pay doctors billions of dollars, via the 2009 HITECH Act, to incentivize them to upgrade from paper to computers. Meanwhile, fast-food chains discovered computers on their own, because the market demanded it.
Mr. Bush recognizes that at the heart of health care is a "deep one-on-one relationship." The key to maximizing this "act of total presence," he says, is for doctors and hospitals to provide care in a way that best exploits their capacities and that, where possible, allows others to perform routine services for less—nurse practitioners instead of doctors, drug-store clinics instead of hospitals. Let entrepreneurs loose on these challenges, Mr. Bush believes, and they will come up with solutions.
Mr. Bush identifies three major obstacles to the kinds of change he has in mind. First, large hospital systems leverage their market position to charge hefty premiums for basic services, then use the proceeds to buy more regional hospitals and local practices. "As big ones take over the small," Mr. Bush laments, "prices shoot up. Choices vanish." Second, government regulations, especially state laws, favor powerful incumbents, shielding "imaging centers and hospitals from competition." Third, heath care suffers from a risk-avoidant culture. The maxim "do no harm," Mr. Bush says, should not be an excuse for clinging to a flawed status quo.
To overcome such challenges, Mr. Bush advocates—in addition to fewer regulations and a greater role for non-M.D. practitioners in routine medical tasks—expanding Medicare Advantage, the privately managed alternative to standard Medicare: "The goal should be to put business, wherever possible, between the government and the patient." He pleads with doctors in private practice to organize rather than sell out to large hospitals. New applications for technology—for instance, household sensors that can integrate data about gait or voice to sense that a vulnerable resident may be heading for trouble—are another goal. He thinks that patients need to assert themselves, and demand their data, not just as a practical matter but also as an expression of provenance. "Any medical practice that keeps your data from you," he declares, "doesn't deserve your business."
At times, Mr. Bush's belief in the power of markets can seem extreme. His suggestion that sick patients who choose hospice care rather than expensive treatments receive a refund from insurers, payable to their heirs, is disquieting; likewise his suggestion that safe but ineffective drugs be available for public experimentation. Then again, disrupters like Mr. Bush aren't doing their job unless they're making somebody uncomfortable and challenging the establishment until it hurts.
Dr. Shaywitz is co-author, with Lisa Suennen, of "Tech Tonics: Can Passionate Entrepreneurs Heal Healthcare With Technology?" and a strategist at a San Francisco-based biopharmaceutical company.