Entrepreneurs, like Steve Jobs of Apple and Bill Gates of Microsoft, have brought us products that reduce costs and improve quality. Yet, even though the United States leads the world in health care innovation, no entrepreneur has appeared. Why not? Disruptive innovation, also known as cost-cutting innovation, is described in The Innovator's Prescription by Clayton Christensen, Jerome Grossman, and Jason Hwang. The professors explain that cost-cutting innovation comes from the supply side, not the demand side. The elements of disruptive innovation can be seen in the graphic below. The entrepreneur understands what consumers want. But, many times, consumers can't describe these wants. Who among us visualized using a personal computer, smart phone, or tablet computer? In the video below, Jason Hwang talks about disruptive innovation in health care. He is co-author with Clayton Christensen and Jerome Grossman, of The Innovator's Prescription: A Disruptive Solution for Health Care . In the regulation of healthcare, Robert F. Graboyes, senior research fellow with the Mercatus Center and professor at George Mason University writes, "Medicare's reimbursement formula muffles prices and distorts resource allocation in ways that affect prices and distorts resource allocation in ways that affect private insurance. Tax laws effectively bind employees to their employers' health plans. State regulations protect insiders through scope-of-practice regulations, protectionist licensing, and certificate-of-need requirements" ( Robert F. Graboyes, " Where are the health care innovators ?"). How can managers influence the external environment of political/legal/regulations? How can managers drive costs down while increasing quality?