Health care is a business that requires a lot of regulatory compliance and negotiation with established players. A new entrant could bring innovative approaches to old problems, but it may also become stymied by the industry’s complexity. The entrepreneurs who launched Oscar Health, one of the insurance start-ups to sell policies under the Affordable Care Act, wanted to create something radically different from the competition. But it has had a difficult time living up its initial hopes and has lost substantial sums in what has proved to be a very challenging business.

Classic disruption rarely applies in health care

Most disruptive companies enter a market with a product that is lower in value than that of market incumbents, but much lower in cost. That’s the model for classic disrupters, like Southwest Airlines, MP3s or Japanese carmakers. Health care tends to be different, because consumers don’t usually want to settle for a lower-quality product, even if it is substantially cheaper.

Amitabh Chandra, a health economist at Harvard, said that perhaps the easiest way to squeeze a lot of dollars out of the health care system would be to reduce what he called “low-value services” — health care treatments that are expensive, but only slightly more effective than cheaper options.

But reducing their use is hard because many people still want the better therapy, even if it’s not a particularly good value. Highly compensated employees, like those at Chase or at Amazon headquarters, may be particularly attracted to cutting-edge cancer treatments or the latest prescription drugs, he noted. A health plan that cut out such services might hurt the ability to recruit and retain workers needed to succeed in other parts of the business.

“If there was pure inefficiency, I think it would be a lot easier to make progress,” he said. “The problem is that all of this stuff has some small benefit.”

There are some ways that a smart company might seek to wring real inefficiencies out of health care. It could, say, lower the prices paid to monopoly hospitals, eliminate services that have no value or tighten the supply chain for drugs. Optimists about the venture say, if the company succeeds, it will most likely do so by finding strategies that improve care and reduce cost.