Today, most healthcare organizations operate in ways that are antithetical to innovation. The trend in patient-centered healthcare is to focus on stability, predictability, standardization and the avoidance of risk. Process engineers are deployed to help hospitals and healthcare systems eliminate waste and improve their organizations using Lean and Six-Sigma principles. Few operators develop an effective focus on innovation. Therefore, few reap the rewards that innovative breakthroughs in patient care can bring.
In a recent Boston Consulting survey across different industries, 76% of executives ranked innovation as a “top-three” strategic priority for their company. Among CEOs specifically, that number rose to 85%, with nearly half of them ranking it as their #1 priority.
The rising cost of healthcare makes this a critical time to explore more efficient and affordable alternatives for delivering care. I believe that providing a vehicle for physicians and employees to innovate will result in the transformation we need in healthcare delivery. This involves implementation of a new culture that promotes thinking about better solutions and collaborating with a lab and industry partners that can help make promising ideas a reality.
In my travels and meetings with healthcare executives across the country over the past 10 years, I have heard a wide range of definitions or descriptions of what innovation is within different organizations. By sharing some of my observations below, I hope to provide a framework for better understanding how to cultivate innovation within the healthcare sector.
How others describe innovation
Some executives talk about Lean and Six Sigma as paths to process improvement and innovation. Community hospitals and healthcare organizations tend to be focused on quality, safety, standardization, incremental change, elimination of errors and waste, but this is not true innovation.
The term “process improvement” often brings to mind “Lean” or “Six Sigma.” Although there is resounding evidence that formal programs such as Lean and Six Sigma have contributed significantly toward achieving greater efficiency and eliminating waste, there’s also proof that they can be detrimental to creating a culture of innovation. Taking risk and failing are necessary to experience real breakthrough improvement. Both Lean and Six Sigma drive performance improvement, but they don’t focus on transformational change. There is certainly a place for process improvement and it can co-exist with innovation, but in the final analysis they are dissimilar.
Both innovation and process improvement have a place. Innovation creates new value through new approaches to care; Lean and Six-Sigma improve an existing process and eliminate waste.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Effective innovation requires organizations to take real risk, and to reward intelligent failure. Most health systems aren’t set up to embrace transformational initiatives like innovation.
What is innovation?
Innovation can be incremental, breakthrough, or disruptive. Breakthrough innovation can make good products better. Disruptive innovations redefine sectors like healthcare by making products affordable and accessible to more people. There are a lot of different views about each type of innovation. We can categorize the three types as follows:
- Incremental – Innovation that improves an existing product/process with an enhancement
- Breakthrough – Innovation that transforms an existing industry
- Disruptive – Innovation that creates a new market or industry; a “blue ocean” concept
A culture of innovation within an organization allows for honest communication. It supports and promotes employees and physicians in generating better solutions for delivering care. Collaboration is key to bringing industry partners together to achieve meaningful innovation.
How can innovation thrive?
For innovation to thrive, it needs to be set up for success. Success in the field of innovation requires that:
- (A) The best thinking is being tapped into
- (B) Intelligent risk can be taken without constraint
- (C) The longer path to innovative success is not over-burdened by fiscal fears and limitations
The best thinking
We need to understand how best to foster innovation among our diverse healthcare community of experienced physicians, nurses, technicians, administrators, and employees. Creative challenges and incentives can help us tap into a hospital’s pool of innovative thinkers, drawing out the brightest ideas. Legal structures (e.g. invention disclosure forms) designed to support promising concepts can encourage tentative inventors to find the best path to market with their innovations.
Healthcare in the 21st century is also intrinsically linked to the tech industry, with all of its talent and promise for future invention. Tech and other industry partners thinking together can raise the quality and quantity of efficient and more readily accepted healthcare products. The track record of institutions such as Cleveland Clinic Innovations – with 67 companies seeded or launched from their most innovative ideas since 2001 – bears witness to the fruit that collaboration can bear.
Decoupling innovation
Change the culture around risk-taking and innovation thrives. Yet the waters of aversion to risk in healthcare are deep, with strong sources. For this reason, I firmly believe that the most effective vehicles for innovation are those that are decoupled from hospital/health system operations. Independence, especially for organizations devoted to breakthrough or disruptive change, is critical to fostering a culture of intelligent risk. An operationally independent organization dedicated to innovation can pursue its goals with courage, and without the numerous legacy constraints inherent in the environment of the standard healthcare provider.
Financial independence
Of course, operational freedom still requires funding. The best business model for innovation has both adequate funding and the ability to be self-sustaining year over year. Often, when a healthcare system sets aside an innovation ‘budget,’ it must compete with the financial demands of other healthcare stakeholders during each budgetary cycle. Innovation is better tied to a model that is both nimble enough and self-sufficient enough to accomplish its long-term goals and bring benefit to the systems that need it.
Healthcare innovation can enrich lives within all of our communities. It allows us to embrace intelligent risk. Gradually, as healthcare systems like St. Joseph Health and BonSecours Health System embrace agile, accountable models of innovation, free to fail in their journey, healthcare will achieve the disruptive change it needs to flourish.
