Evaluating Disruptive Innovations

disruptive innovationIn the wake of the release of the iPhone 6, many in the technology industry have speculated whether the latest iteration of the iPhone is truly innovative. A 2012 Harvard Business Review article begins with a strong statement regarding disruptive innovations: “Disruptive innovations are like missiles launched at your business.” The iPhone and other phones operating on the Android platform have decimated the Palm Pilot and RIM’s Blackberry.  Phones, iPods and other MP3 players have also taken over the portable music space, eclipsing the use of portable cassette and CD players.

Other innovations have appeared disruptive at first, but faltered out of the gate and eventually faded from consumer consciousness.  Take Google Glass for example, the shiny new piece of wearable tech that allows users to take pictures and video, and access the internet through the headset. The roll out wasn’t quite as problematic as the debut of Healthcare.gov, but Google Glass has struggled to gain traction in the tech community and truly disrupt the marketplace.  It is too early to tell whether the Apple Watch will fall into this category.  However, if the Sony SmartWatch and Samsung Galaxy Gear 2 are any indication, the Apple Watch may prove to be a footnote in Apple’s otherwise formidable lineup of portable technology.

It is easy to identify disruptive innovations when it comes to technology, as well as those innovations that haven’t been so disruptive after all.  How does this translate to the current employee benefits environment many employers are facing today?  Many innovations have made their way into the employee benefits landscape as a result of the Patient Protection and Affordable Care Act (PPACA).  How do employers know which innovations are will truly disrupt the marketplace, and which will be duds?

Employers are faced with a plethora of options and strategies with regard to their health insurance benefits.  From private exchanges, captives, PEOs and other varieties of risk pools, to narrow network and referenced-based pricing plans, many so-called innovations exist.  But, with all of these choices, employers need sound guidance from their benefits consultant to help identify the next iPhone in a sea full of Palm Pilots.  Much like the problems that often plague new technology, many employers are deterred by higher costs, increasing complexity, unpredictable outcomes and questionable long-term viability of a product.

It is still too early to identify which of these strategies, and others that haven’t yet been developed, will gain traction in the employee benefits landscape in the months and years to come.  However, when developing a benefits strategy, it is vital to assess each of these variables when considering whether that new, innovative benefits idea will be a boon or a bust for your benefits strategy.  Work closely with your benefits consultant to identify those disruptive, innovative benefits strategies that will work for you and your employees, both now and in the future.