Healthcare innovation is occurring everywhere in the form of treatments, pharmaceuticals, devices, and more.
But the forms in which those innovations are delivered – the comprehensive systems, insurance organizations, and general infrastructure – are not keeping pace with the advances in healthcare. Hospitals and other healthcare organizations are lagging behind on the innovation curve, and this trend has existed for some time now.
This blog is the first in a series that focuses on the barriers to healthcare innovation and the individuals and organizations who are solving the industry’s problems.
As mentioned above, the advances on the care side appear impressive within the context of the past decade, but the organizations, technologies, and processes used to deliver actual care are slow moving, outdated, and sometimes even counterproductive. Healthcare spending is approaching one-fifth of US GDP, and growth in health care spending is outpacing the growth of the overall economy.
In this respect, any improvement in the efficiency of care delivery, operations, and care plans would be huge. The opportunity is large, and so is the pool of innovators trying to solve it. In recent years, only software startups have outnumbered those with an explicit health care mission. The excitement surrounding healthcare in the entrepreneurship community is met with great enthusiasm and investment from the business community. The growth of healthcare-specific accelerators serves as an indication and acknowledgment of the problems and opportunities in the industry.
But why haven’t we seen the impact of all these business and operational innovations in healthcare to date? The short answer is that barriers exist within the healthcare infrastructure, both in the United States and internationally. There are systemic issues creating hurdles that are near impossible to cross in some instances. Highlighted below are a number of such hurdles in regards to the multiple-stakeholder environment within healthcare. Future posts in this series will further dissect hurdles to healthcare innovation adoption as well as profile the players in the space that are seeing traction with their innovations – and what there is to learn from these cases.
A key contribution to the slow velocity of innovation within the healthcare ecosystem is the diverse set of interests of stakeholders. Such stakeholders are divided on the time-frame of their goals, how they make money and their proximity to the end consumer. This fragmented environment makes driving system-wide change a near impossibility on certain items, including general efficiency and care delivery agendas. There is competition between inpatient and outpatient facilities. Insurance systems and care providers haggle over the CPT codes that will be charged and paid. Goals differ for Medicare and general health care plan providers. Non-profit and for-profit enterprises vie for their respective roles. There are even different interests within levels of a hospital that make the introduction of innovation a tightrope to balance.
But why haven’t we seen the impact of all these business and operational innovations in healthcare to date? The short answer is that barriers exist within the healthcare infrastructure, both in the United States and internationally.
Where competition drives improvement and benefits the consumer in most industries, the opposite is sometimes true in healthcare. Consumers are armed with better tools to help them make educated decisions, but for the most part, they are placing an entirely different value on the care they receive, the time they are seen, and outcomes than providers and insurers. As care advances, misaligned expectations across the system mean that solving one piece of the puzzle can sometimes only introduce more challenges on the opposing sides. The multi-dimensional aspect of healthcare can only go so far in terms of innovation.
Many innovative products with aspirations to improve care for the end consumer cannot navigate the convoluted landscape that is the healthcare ecosystem. Selling into hospitals and other provider networks is often the highest hurdle, but even if that challenge can be met, there remains the ability to mesh with the varying interests and business drivers for all sides of the healthcare equation. All parties carry financial clout that translates into business decisions and policy influence. Often, the healthcare innovation battle can actually be taken out of the hands of the innovating visionary, and fate is dictated by heavyweight organizations and decision makers within those organizations who are not incentivized or structured properly to drive change.
All this said, the opportunity remains for massive improvement and innovation within healthcare! And the industry is fortunate that so many entrepreneurs and visionaries are taking risks with the goal of improving the system.
The technology environment within hospitals and for other care providers is a primary illustration of the delayed adoption of innovation within healthcare compared to other respective industries. Technology being used in healthcare has long been surpassed by non-healthcare organizations. And that technology has translated to massive growth, scale, and efficiency gains. The fragmented environment and diverse, detached, and sometimes disorganized interests within the healthcare sphere have made it tough to introduce technology innovation into the marketplace (as evidenced by the EHR implementation process). Our next post will highlight the potential for technology innovation to improve healthcare and the challenges that exist on that front.