Why Can’t Healthcare Innovate?

Whether viewed as paradox or conundrum, the healthcare industry’s relative inability to innovate has long been a source of both fascination and frustration. In the May 8, 2014 edition of the New England Journal of Medicine,  David A. Asch, M.D., M.B.A., Christian Terwiesch, Ph.D., Kevin B. Mahoney, B.A., and Roy Rosin, M.B.A. write about this phenomenon in Insourcing Healthcare Innovation.

Describing the understandable resistance of healthcare professionals to embrace problem-solving techniques from unrelated industries because the complexity of healthcare delivery is most often not well understood, those professionals are by definition usually most interested in exploring new ideas, new approaches and the pursuit of new knowledge. This apparent irony, the authors believe, might be effectively synchronized if a different approach could be taken to reconciling innovation with contextual understanding.

The approach they share is a four-stage design process they believe can achieve this reconciliation. The four stages include: contextual inquiry (understanding the processes currently in place); problem definition (ensuring the right problem has been understood and defined); divergence (exploring alternative approaches) and rapid validation (ability to move from theory to implementation).

If these sound familiar, it is because the general direction of proceeding from understanding where you are to achieving where you would like to be in an orderly fashion is the foundation of many approaches to strategic planning. So from that vantage there isn’t anything particularly revolutionary about the process described.

But understanding the core resistance to such processes – that the way in which healthcare practitioners are educated, trained and practice is frequently counterintuitive to innovation techniques successfully utilized in other industries – is an important distinction. What this translates into is making the requisite investment to understand the unique attributes and complexity of healthcare delivery – its distinctive product offerings, its highly dependent reliance upon personal relationships, its unbelievably complicated regulatory environment – as a necessary component of any planning effort.

It takes time and effort to build the needed understanding of the unique challenges that healthcare practitioners face. You have to ask probing questions and not hesitate to admit your lack of understanding: a fair balance of humility and curiosity can go a long way to building key relationships and creating the requisite knowledgebase necessary to innovate.

In other words, individual egos often create barriers to innovation processes that are attempted to be imported from other industries. More so than representing a different way of approaching innovation in healthcare, what this article does is reinforce a tried and true means of any planning effort: listen and learn before you lead.



Questions I Have for LeadingAge Members

This week I will be joining my Artower colleagues in Denver at the LeadingAge Annual Meeting & Exhibition.    We will be hanging out at Booth # 1915 during Exhibit hours.  If you are going to be out in Denver, please stop by and say hello.

My first LeadingAge (AAHSA) conference was in 1991 (San Francisco) when I was working at Ernst & Young.  A lot has changed in the senior housing & care industry over that span, and LeadingAge has been at the heart of much of that change: they are to be commended for their tireless efforts of advocacy, education and applied research on behalf of their nonprofit membership. 

And I have truly enjoyed being a sponsor, supporter and contributing author/speaker to AAHSA/LeadingAge events during that time.  The accepted quid pro quo of that business relationship has been making such contributions to LeadingAge membership in return for access to that membership (though I think the form of those contributions has been decidedly trending more heavily toward financial over in-kind, which I guess reflects the economic realities we live in today).

I have always felt, however, that the AAHSA/LeadingAge quid pro quo relationship – if approached from the proper perspective (i.e., having the ability to listen and learn) – offered a great deal more than just marketing opportunities.  And so as I do every year, in getting ready for this year’s Meeting, I have some specific areas of interest that I am hoping to learn more about.

Industry Consolidation
Industry consolidation in healthcare is in motion, and the trajectory is one of acceleration.  Economic realities mandate the achievement of increased efficiency and productivity as a condition of survival.  The importance of mission notwithstanding, nonprofit organizations providing healthcare will not avoid being affected by consolidation in one fashion or another.  I am curious to learn whether the leadership of LeadingAge members agree with me – and if so, what they are doing to prepare their organizations for the impact of industry consolidation.

Care Transitioning
How are members organizations reacting to the intense regulatory pressure to lower Medicare/Medicaid expenditures through what is believed (hoped?) will be efficiencies and better alignment of care needs with care settings? Hospitals are – finally – beginning to reach out to post-acute/long-term care providers to engage in conversations on this topic.  What are members doing to be prepared for those conversations?

Hospital Readmissions
A similar but more clinically-focused discussion has to do with Section 3025 of the Affordable Care Act, the Hospital Readmissions Reduction Program.  Care Transitioning is a critical element of that discussion, but I really want to understand what members are doing to embrace – or not – the ability to handle increasingly higher levels of patient acuity.

Defining the Boomer
For the past decade or so we have been discussing how the Boomer Generation is going to be a uniquely different market constituency: more demanding, more educated and informed, more willing (and able) to pay for personalized services and care.  We’re another decade-plus away from Boomers starting to have a really significant impact on provider demand, but with the leading edge of that demographic now entering retirement, what are we learning about the reality of the expectations we’ve formed about Boomers?

Information Technology
The silver bullet that’s supposed to pierce the rising bubble of healthcare costs, Information Technology holds great promise – and great peril for nonprofit organizations providing housing, aging services and post-acute/long-term care.  I would like to better understand how LeadingAge members are viewing IT investments and what risk management strategies they are employing to help guide such investment decisions.

Home & Community-Based Services
This is the area that I am most excited about, having been privy to the strategic initiatives of several member organizations that are currently planning, developing and providing service and care programs that will help seniors remain in their homes and communities.  And in each case those efforts are being developed in concert with market and regulatory-driven realities of Healthcare Reform.  I believe that – at least in the short run – innovation in home and community-based services offers a shorter path to achieving organizational financial sustainability than information technology.

Of course I have a lot more questions and areas of interest where I am hoping to learn as much as I usually do from attending the LeadingAge conference.  Please watch this space for after the conference.  I will share what I learned.  Until then, hope to see you in Denver,