Everywhere you go, you hear this buzz around you, “healthcare is shifting from volume to value-based care models.” And then a broad definition strikes in your mind- that value-based care means where clinical outcomes outweigh the risks and the costs- which is fairly correct.
At a smaller level, however, how each of us understands and defines value differs on a multitude of factors and the people. It’s pretty much localized based on health status, demographics, geography, social conditions, economic situation, and whether we’re talking about patients, providers, or payers. Despite this heterogeneity, I could say, that “value” is what’s charging healthcare forward. I could even say that we’re trying to change how services are being delivered.
But, you can only change the packaging and delivery over and over again. At some point, you have to bring something new to the table. Granted, healthcare is in a state of flux right now and there’s a good amount of instability given how payment models are changing. And that makes healthcare the perfect ground for innovation and creativity!
What drives healthcare innovation?
Healthcare spending has gone over $3 trillion, so clearly, the opportunities for growth are replete.
Let’s look at the macro level. Let’s consider why value-based care was brought into the picture. Easy answer: the healthcare costs were skyrocketing in the US, but the clinical outcomes had nothing to show for. CDC reveals that in 2017, the life expectancy for someone at birth in the United States was 78.6 years, which is a slight decline from 78.7 years in 2016. 44% lower-income population and 26% higher-income face some financial barrier to care. Health spending per person in the U.S. was $10,348 in 2016- which is 31% higher than Switzerland, the next highest per capita spender. So needless to say, “value” in healthcare was required.
And now, if we pause to drill a bit deeper- most healthcare experts would agree that the rapid increase in the chronic conditions and the retiring baby boomers contributed significantly to the overwhelming care delivery model. It was important that these people were kept healthier to avoid repeated visits to the hospital.
Another important aspect is that this shift is taking a toll on our physicians. The physicians are burning out because of twenty years old technology, time-consuming workflows, and hours that go into finding the right piece of information. Physicians spend half their time facing the screen, keying in data into their EHRs– and these tasks are spilling over after-hours. It’s not as if physicians are frustrated with spending extra time- it’s the pointlessness of it.
These factors mandate an immediate focus on innovation in healthcare. We need nothing less than game-changing breakthroughs to make healthcare better and reduce costs. And it’s not like the automobile industry or home automation, where the user’s ease of use translates into revenue. If we stick with that, healthcare would remain ‘sick-care.’ The intent is to transform how patients are cared for, and how they should be kept healthy- and we need a lightbulb idea for that.
How to define innovation in healthcare?
Simply put, innovation is the dawn of a new idea which holds the promise of a significant impact. In an increasingly digital world, innovation would point to new ideas, a discovery, or perhaps an advance in technology. Unfortunately, though, many of these improvements have also been blamed for certain other problems. We are innovating, but we are innovating amid other problems- so we’re not exactly creating solutions.
Consider the catheter. It’s hardly the starlet of medical devices. It’s not glamorous, it’s nothing fancy- it’s just a tube that inside the body. What started as a low-tech device became much more significant with add-on technologies like stents and drug-eluting devices. And now, catheters are pivotal to treat complex vascular and urinary issues.
And yet, people of the US continue to struggle for access to healthcare. Patients wait an average of 24 days to schedule an appointment with a doctor- amid a shortage of doctors and an aging population.
Source: 2017 Survey of Physician Appointment Wait Times,
So this paradox has to be addressed first. It’s not just about creating new things and piling up new ideas. Your innovation has to be useful. It should be making an impact in the end user’s life. It’s important to understand that innovation is not just about new breakthroughs, but more importantly about how these revelations are being used and how will the benefit in the long run.
The state of innovation in healthcare
In recent decades, a lot of innovation has been centered on the development of diagnostic procedures, drugs, and medical devices. All means have been put to use to keep people healthy- delivery of care, technology, payment models. Indeed, a lot of money has been spent on finding solutions. The spending on healthcare R&D was valued at $171.8 billion in 2016 and is second only to defense R&D.
Thanks to gaming technology, imaging modalities are receiving frequent updates to make them faster. We have transcatheter aortic valve replacement technology that allows surgeons to put new heart valves in patients in a non-invasive way. Software-based products, artificial intelligence, among a variety of mobile apps and wearables are also evolving, focused on improving outcomes and reducing unnecessary utilization.
Despite all this, there are efforts that fail, losing billions of investors and dollars along the way. Innovation in healthcare is bogged down by legacy structures, workflows, and its slow pace of adoption. There are at least three major stonewalls to innovation in healthcare:
- Treating innovation like any other project
One of the most common mistakes in healthcare is that we see innovation like any other investment opportunity. It could easily lead to innovation efforts appear non-essential and that just increases the risk of their failure. Also, there’s often an oversight of industry regulations, existing players, and government control.
- Not considering competing technologies
Many innovators fall into the trap of assuming that their existing resources can support innovation. While it may be true in some cases, we can always learn from what other people are doing. Innovation requires time, capital, focus, and patience, but it also requires you to stay ahead of the curve.
- Chasing the wrong measures
You may have the best idea in the world- but if only three people need it, it’s best to move on. It could a significant investment, it could possibly have a brilliant financial projection. But it’s important to consider metrics like market size, engaged users, downloads, growth, and not just financials.
Avenues for the future innovation: The “Googlization” of Healthcare
A lot of healthcare experts have pegged consumer experience to be a priority, so we can definitely see significant innovation opportunities on that avenue. Also, with technology offering us new ways of capturing multidimensional health data, and are increasingly seen as facilitators of innovation in healthcare.
Medical research: Science is undergoing a quiet revolution. WIth more data than before and with better technology, we can power innovative medical research to build an efficient healthcare system. From genome sequencing to finding cure to life-threatning conditions, medical research has a vast future ahead.
Artificial Intelligence: We have registered considerable progress with AI in healthcare. AI chatbots, for example, are already serving as triages for patients and helping them answer basic health queries and assessing health symptoms. AI applications can be scaled much more once the fragmented state of healthcare is addressed as huge amount of datasets can yield higher accuracy in AI algorithms.
Predictive care: Predicting future liabilities at a patient level is a very complex problem because we have limited information about every single patient. This problem is further magnified because no two patients are same. Hopefully, there could be better opportunities for predictive care with more data at hand.
Automation of processes: Automating devices and processes has yielded exponential savings in hundreds of sectors now. And if any industry that needs, or rather, demands quicker, more efficient processes, it’s healthcare.
Integrated wearables and devices: Devices such as activity trackers can help consumers be more active and healthier on their own and could reduce their need to see a doctor. Instead of having to go to a clinic for regular monitoring, patients can do it at home and the result would directly be shared with the doctor too.
The road ahead
All organizations require one key competency to survive and thrive: innovation. Right now, we may have a few roadblocks ahead of us. Some innovations require legislation, some require technology, or some require significant capital. Despite the obstacles, healthcare has a lot of potential for innovation and stands to benefit the most. The trick lies in knowing what you don’t know. Sure, innovation is not easy, but it’s easier during instability and difficult times. So if there’s a time to innovate, it’s now.
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Join the webinar with Phil Fasano, Former CIO at Kaiser Permanente, and Dr. Paul Grundy, ‘Godfather’ of the Patient-Centered Medical Home movement, for a panel discussion on “How to Modernize Healthcare and Create a Win-Win for Patients, Clinicians, and Payers” on December 11th! Register now!