2023 has been another watershed year for healthcare innovation, largely reinforcing past challenges faced in creating systemic and broad changes in healthcare delivery. Innovations found greater success when they were targeted at specific areas of application (e.g., AI for SOAP notes) or with localized rather than broad-based impact (e.g., transition of care services). Broader-based, disruption-driven, technology-first, or direct-to-consumer healthcare delivery models largely failed to make major headway, despite the impressive amounts of resources and talent involved in these efforts.
In 2024, it may be useful to reconsider the disruptive approach to effectuating change in healthcare, recognizing that for a variety of reasons healthcare is simply a unique industry and that disruptive innovation approaches from other industries simply don’t translate. The opportunity costs of failed innovations are too high to bear, across healthcare stakeholders.
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General Catalyst’s (GC) launch of the Health Assurance Transformation Corporation (HATCo) may offer the most promising alternative approach to healthcare innovation, yet. HATCo, a healthcare company built around an organizing principle of “health assurance,” ostensibly encompasses a guiding mission of proactive and value-based care delivery as well as an implementation approach bringing together traditional healthcare, digital methods, analytics and pharma.
HATCo’s novel approach to systemic innovation in healthcare
A common approach to innovation that a typical healthcare system might employ would be to use a pragmatic implementation approach coupled with a vision of modest and incremental change. This strategy would essentially lead to incremental but predictable financial returns, relying on exploiting existing skills. Such incremental and evolutionary changes across the system are commonly seen within the Mayo Clinic and Cleveland Clinic systems. On the other hand, modern systems, including telemedicine-centric and virtual-first focused models hatched within the last decade, are driven by bold and innovative visions with operational changes which are necessarily disruptive. These businesses are exploring radically new ways of delivering healthcare; poor hit rates are tolerated in the search for the big hit.
GC’s health assurance model uniquely pitches a bold vision but with a pragmatic approach to implementation, focused on seamless changes, attention to aligning stakeholder incentives, a reliance on collaborations within and across systems, and the willingness to adopt a “go slow to go fast” model toward long-term outcomes. The model will be challenging to implement since the expansive vision and cautious operational model don’t naturally align. But it could see positive reactions from the clinician community which – while seeing the need for change and technological innovation – is deterred by visions of disruption at the operational or at more granular, process levels.
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GC’s planned approach has a lot in common with a shaping strategy, as articulated by John Hagel and John Seely Brown. The shaping approach to innovation, through its focus on collaboration, positive incentives, and tamping down uncertainties that occur via disruption is in contrast with the vastly more popular model of disruptive innovation (both in the Clay Christensen and operational senses). Sandro Galea, Dean, Boston University School of Public Health’s recent article that speaks to radical incrementalism in healthcare subtitled “radical ends do not always demand radical means” is along similar lines.
Another aspect that is unique about the vision set forth in GC’s model is the role and respect afforded to clinicians, in contrast to typical pronouncements of new business models from tech driven healthcare firms. In recent years, digitally focused healthcare firms seem to relegate clinicians to secondary roles (virtual first models) or even position them as someone who needs disintermediation (direct to consumer, consumerism models). GC’s vision, co-developed with leading physicians, focuses on collaborations among stakeholders and on using technology to empower caregivers. A value-driven focus on cost efficiency and improved clinical and financial effectiveness does not have to be at odds with the value-creating impact of clinicians as the central caregiver, building and sustaining patient relationships.
The success of the HATCo system will depend on implementation strategies that are able to thread the needle and strike the right balance between a bold vision and careful implementation, while allowing for near and long-term outcomes to play out.
Potential implementation challenges:
- Sustaining strategic intent under pressure: Will GC and this new system stay true to the operational pragmatism that is being espoused, even when market signals push for quicker and higher returns? Google has fought the battle to avoid diverging from the value system put in place at inception, in the face of profitability and political exigencies, with mixed results. Health assurance’s bold vision may exert pressures for a more disruptive and less empathetic implementation than planned. Or, on the other hand, the need for careful implementation may require tamping down the expansive vision for change.
- Sustaining the unique team balance: Implementing health assurance and developing the HATCo system relies on the primacy of the clinician-leaders in the team working with the technology experts. That balance is as critical to the end result and acceptance within the larger healthcare system as the operational approach. Scaling the founding team while avoiding evolution into a business or tech led effort will be a key challenge for long term resilience and success.
- The sandbox health system: The biggest X-factor is how the idea of acquiring and shaping an existing health system will come to fruition, given the attendant risks of operational rigidity, legacy culture, baked-in stakeholder expectations and pre-existing ecosystems. Finding the ideal healthy-yet-malleable system for acquisition may be a failing cause. Instead, there may be a need to consider a less expansive approach, such as building a modest sized system from the ground-up, linking existing systems within the network, and embedding digital health companies within this system.
GC’s considerable endowments including financial, reputational, and relational slack have given the firm the ability to lay out a grand and transformative vision for healthcare delivery and could help HATCo overcome implementation challenges along the way. If successful, an evolution to a replicable, and truly value-based healthcare delivery design would be rewarding across all stakeholders.
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Deepak Sirdeshmukh, MS, Ph.D., is Co-founder and CEO of Sensal Health, offering groundbreaking hardware and software solutions to empower clinical research organizations, pharma companies, and healthcare providers to manage patient medication compliance to complex dosage regimen. Drawing on his expertise as a pharmacist and deep understanding of behavioral modification strategies, Deepak’s passion lies in helping drive transformative change and contribute to improved patient outcomes. At Sensal Health, Deepak has spearheaded the development of MyAide a pioneering patented solution for complex oral dosage regimen, and MyAide Derm for topical dermatology. He received his MS in Pharmaceutical Administration and Ph.D. in Marketing from the Ohio State University. Deepak’s recent research has appeared in the Journal of the American Academy of Dermatology and Journal of Dermatological Treatment. He has also published in the Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, the Journal of Consumer Psychology among others.
