Innovation has become a buzzword in healthcare over the past two decades. Silicon Valley, technology providers, health plans and health systems all agree that this is the key to the future. Like the Miss America contestants seeking world peace, “Innovation” has become the pre-set answer to the question “How can we save the American healthcare system” by members of the healthcare committee, executives and industry experts.
However, the overuse and generalization of the word “innovation” has led to a loss of understanding of what it actually means. It’s not “doing the same thing a little better,” though that’s a common threshold for many healthcare companies. Instead, it has to be “make something new and make old something obsolete”.The latter is much more difficult in the short term, but is really the only way to get there fivefold love in the long term. We should start thinking about innovation as a separate set of skills and behaviors that require a different kind of leadership than most healthcare organizations.
To be sure, these are overwhelming times for the health system.Despite the Covid-19 pandemic Accelerating Digital Technology Adoption Notably, many are still struggling to find effective innovation strategies. For health systems, under pressure to innovate but not sure how to implement change, it is common to choose a flawed approach to this conundrum. These are some of the flawed strategies that have been employed.
Let the wrong person in charge
Health systems often promote people with limited medical investment experience to lead innovation efforts and give them a little money to play. However, success requires healthcare experience and investment experience to drive the process and make the right decisions.
Another common strategy is to place innovation under the CIO’s responsibilities. While the CIO is critical to these efforts and should always have a strong voice in the conversation, these leaders often don’t have time to focus on innovation and process stagnation.
The health system is the sole investor in the deal
More than ever, health systems need cooperation to survive. They should invest with other like-minded organizations to shape startups and ensure they can scale. If they invest in the right solutions, these will not only have an impact on their organization, but can also show returns when implemented in other markets.
Partner with a local “innovation center” or “incubator”
While it feels good to support local entrepreneurship programs, this often doesn’t necessarily help or align in any way with the needs of the health system. While it is good to engage and support these organizations, the entire strategy of the health system should not rest on it.
Not looking for new perspectives from outside the organization
Some of the most disruptive thinkers may not be within the four walls of your organization. Often, the most innovative thinkers come from women and minorities who are unfortunately overlooked. These new early leaders are driving, defining and designing a better future through technology-driven innovation.
Your organization should make a concerted effort to identify and consider leveraging this untapped pool of dynamic young leaders to help drive your organization’s most important innovation initiatives.
A thoughtful look at digital innovation is the first step to success. Here are some guidelines for building health systems with successful innovation strategies:
- Set clear goals for initiatives that align with your long-term growth strategy.
- Put someone who understands healthcare, has entrepreneurial experience, and is familiar with venture capital or private equity in charge.
- Set an appropriate budget. A good starting number is $25 to $50 million; $10 million may not be enough – starting too small will result in suboptimal returns.
- Have a small but strong oversight group of strategy, IT and operations leaders who can commit to regular meetings and possibly many weekend and early morning conference calls. After all, innovation never sleeps.
- Give this committee the freedom to allocate funds freely (ie, do away with traditional health system bureaucracy, even if you need board approval).
- Partner with experts with healthcare investment experience and allow your organization to benefit from a broad transaction process and specialized investment expertise.
This may be the most challenging and exciting time in the history of our healthcare system. Creating real change is complex and requires deep experience, connection and creativity to get it right. No matter where you are in the process, it’s never too late to adopt a structured approach that delivers results.
Photo: Hackinman, Getty Images
