Innovation and Disruption

Balancing Innovation and Delivery

August 29, 2018 11:46 am

The term healthcare innovation suggests a range of exciting possibilities from disruptive technologies and unconventional delivery models to alternative payment models and nontraditional partnerships. Although such prospects are enticing, however, innovation also can create serious challenges when it is not managed well.

Innovation may not require significant resources, but it always requires significant attention. Many healthcare leadership teams have found it difficult to focus on their future vision while keeping their eye on current needs.

For hospital leaders, the risk is losing sight of the mission of care delivery. When one devotes significant attention to building the innovative systems of tomorrow, it is easy to neglect the thousands of operational details that underpin patient care today.

The key to balancing the promise of healthcare innovation with the demands of healthcare delivery is to maintain a strong focus on outcomes. The most successful healthcare innovators are adept at balancing transformational change with incremental improvement in a way that ensures steady progress.

This balance is delicate but achievable. Four leadership practices can help a healthcare organization maintain effective care delivery while pursuing innovative change.

Be Active Across the Entire Range of Innovation

For many people, healthcare innovation signifies a radical transformation in the treatment paradigm, delivery structure, or business model. This kind of ambitious innovation is important, but it also carries significant risk. The solution is to understand and cultivate the full range of innovation. Consider two examples that illustrate that range.

Innovation No. 1. A group of clinical leaders and business strategists work together to create a new wound care service line. The service line incorporates advanced technology and evidence-based care pathways to optimize outcomes, clinical navigators to increase patient access and improve the patient experience, and distinct branding to achieve rapid market awareness and adoption.

Innovation No. 2. A group of nursing managers and staff work together to improve scheduling processes on the orthopedic floor. The changes include a more efficient workforce structure and better use of existing IT systems to match staffing levels to patient needs.

Both initiatives qualify as innovation, but they differ in scale. The new service line is a major change in delivery model with the potential to disrupt the local market. The new scheduling process is an incremental improvement with the potential to deliver an improved patient experience and cost savings.

Successful healthcare leaders value both types of innovation. Transformational innovations create the possibility of breakthrough improvements in cost and outcomes. Operational innovations help maintain strong care delivery at the ground level while generating the margin that can help fund attempts at large-scale change.

Filter Innovation Opportunities with Objective Data

Innovation is exciting. Everyone from the hospital CEO to front-line team members can easily be swept up by the allure of a new technology or a novel delivery strategy. Of course, not every new idea leads to success. Healthcare organizations need objective measures to evaluate proposed initiatives and identify ones with underlying potential for prioritization.

For example, a hospital might be looking for innovative ways to improve its cardiac service line. One option is to adopt any of the newer implantable devices for managing heart failure. This approach offers the potential for improving patient care and positioning the hospital as a center of innovative thinking.

However, it is critical that service line leaders take a hard look at the available clinical and market data. Hospitals frequently commit to technologies that offer little to no quantifiable quality advantage yet require a significant cost increase. A careful review of the objective data can help an organization avoid expensive investment missteps that undercut care delivery.

This point does not mean that the financial bottom line is the only objective measure. Value in health care is complex, and it is viewed differently by different stakeholders. However, as much as possible, organizations should evaluate new options against the available data on patient outcomes, patient experience, efficiency, and other components of healthcare value.

Focus on Real Customer Problems

Successful innovators don’t wait for problems to arise. They actively seek them out. Innovative organizations achieve exceptional results by challenging staff to solve their toughest customer problems.

The business world offers many examples. Stanford University management professor Steve Blank, an inspirational leader behind the lean startup movement, encourages entrepreneurs to “get out of the building” and talk to customers. Consumer data giant Experian has set up a special unit to seek out and solve its customers’ toughest problems. IBM regularly creates “grand customer challenges,” a practice that has helped it to develop an artificial intelligence system that can beat humans at Jeopardy! and that is evolving to help address the world’s biggest healthcare needs.

How can healthcare organizations emulate these practices? A few years ago, leaders at Children’s Health, a 616-bed health system in Dallas, recognized that the only way the organization could improve the health status of the city’s youngest population was by first becoming more proficient in addressing the social determinants of health. Initially the health system set out to leverage its existing facility network, but the early results were underwhelming.

Children’s Health then began experimenting with a different delivery infrastructure—a network of healthcare navigators working outside its facilities to connect families with other resources in the community. System leaders further catalyzed these efforts by creating the Children’s Health and Wellness Alliance, a collaboration of over 100 community partners including schools, churches, and social agencies. Together, the navigators and partner organizations proved to be more agile at addressing social needs and achieving results.

Seeking out hard problems, accepting setbacks, being flexible, and sharing credit with others are hallmarks of successful innovators. Healthcare innovation need not always be visionary, but in its necessary focus on care delivery, it must be flexible to meets the needs of its customers.

Identify and Mitigate Risks

No matter how good an idea may be, poor planning or poor execution will lead to poor results and wasted resources. The key to avoiding these problems is to apply risk management concepts and tools to innovation efforts. Consider the following effective approaches.

Analyze initiatives for likely failure points. Stakeholder buy-in is a common weakness for many innovative ideas. For others, moving from plan to execution is the breakdown point. For any given idea, leaders should identify the expected problems and develop a mitigation plan.

Use scenario modeling to understand potential impacts. For example, how will an innovative new service line fare under different payment assumptions or different competitor reactions? Again, leaders should identify potential problems and create proactive solutions.

Create “learning labs” to test initiatives in lower-risk settings. Before committing to an organizationwide rollout, for example, a health system might test a new approach in a single clinic. This approach helps leaders assess strategies without the risk of incurring large-scale problems.

Risk management supports innovation by spotlighting ideas with the best chance of yielding strong outcomes and identifying ones that are likely to waste resources and weaken current delivery. Healthcare organizations that take a balanced approach to innovation will be able to sustain strong operational delivery while they move toward a future vision of health care. The key is maintaining the right focus. Not every innovation needs to be transformative. But every innovation should aim to improve upon today’s care delivery in some way.


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