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Analysis

5 Innovation Strategies You Should Consider Now From a Global Perspective

By Mandy Roth  
   August 16, 2019

How U.S. health systems measure up to a global innovation expert's recommendations.

The concept of innovation is not new to healthcare in the U.S., but the practice of incorporating innovation into health system operations is in its infancy. And, while many larger organizations have established innovation centers, most are exploring how to embark upon such ventures or expand upon their initiatives.

American healthcare innovators might have something to learn from a nation Bloomberg rates as the fifth most innovative country in the world—even surpassing the U.S.—and Inc. says produces the globe's largest amount of startups per capita.

HealthLeaders spoke with one of the driving forces behind Israel's healthcare innovation, Eyal Zimlichman MD, MSc, who serves as deputy director, chief medical officer, and chief innovation officer at Sheba Medical Center at Tel HaShomer, Israel, which Newsweek named as one of the 10 best hospitals in the world earlier this year. Zimlichman is the creator behind Sheba's ARC Innovation Center.

Zimlichman also works extensively with healthcare systems in the U.S., and formerly served as lead researcher at Partners HealthCare clinical affairs department in Boston. He shares five ideas to accelerate healthcare innovation in the U.S. We also examine how U.S. health systems are performing against these recommendations, based on insights HealthLeaders has received from interviews conducted with leading health system innovation experts over the past year.

See related story: How Israel Does Healthcare Innovation; An Insider's Look for Americans.

1. Invest in Digital Health
 

Digital health will be the "major transformation agent" over the next decade in healthcare, Zimlichman says and health systems should invest in promising ideas and bring them to fruition. His American counterparts agree, and are also focused on the operational and cultural aspects of these innovations.

Tal Heppenstall, president of UPMC Enterprises and executive vice president and treasurer of UPMC echoed this sentiment when HealthLeaders spoke to him last year. "We believe that technology is going to change healthcare," he said. "Our biggest competitors aren't necessarily the hospitals that are around us; they are actually the Apples and Amazons and Googles of the world."

Yet realizing the potential of connected healthcare goes beyond the development of devices, Joseph C. Kvedar, MD, vice president of Connected Health at Partners HealthCare in Boston, told HealthLeaders in May. It is rooted in changing healthcare culture, along with physicians' attitudes and training, he says.

Asaf Bitton, MD, MPH, who recently took the reins as executive director of Ariadne Labs, shares an even more expansive viewpoint. "We have to think about innovation not only as a search to produce new technologies or medical treatments. Innovation is also desperately needed to build more reliable, safe, and patient-centered experiences to improve outcomes."

2. Focus on Collaboration
 

Because the Israeli market is so small, Zimlichman says that "95%, if not more, of startups in Israel are aiming for the U.S. market. Everything in the startup culture in Israel is geared towards the U.S." Understanding the American market and regulations is crucial, he says, as is the ability to pilot a proof of concept at an American site.

To facilitate those endeavors, in the past two years he has signed collaboration contracts with many prominent academic medical centers in North America, including Mayo Clinic in Rochester, Minnesota; Stanford Health Care in Palo Alto, California; Mount Sinai in New York; Jefferson Health in Philadelphia; Cincinnati Children's in Ohio; and Henry Ford Health System in Detroit. These relationships have provided Zimlichman further insights into the way health systems approach innovation, he says.

While American medical centers have a different orientation, in his work with these organizations, Zimlichman says he has observed that there is little collaboration among them. He points out that digital healthcare innovation lags far behind other industries, yet the need for improvements is critical. "That is something we can learn from other industries—to work together to build those groundbreaking solutions," he says. "If we want to redesign healthcare, we have to work together."

In an interview last fall Thomas Thornton, former senior vice president and executive director of Northwell Ventures (who now works in the private sector), also said that while Northwell was actively engaged in collaborations with multiple health systems, it was unusual for health systems to work together on these endeavors. "If we all have the same strategies," he said, "then why aren't we collaborating around these investments?"

3. Create a Startup-Friendly Environment That Welcomes External Entrepreneurs
 

Most academic medical centers focus only on development of ideas from within their own system, Zimlichman says, because they want to own the intellectual property (IP), and then capitalize on that IP for licensing and commercialization.

Looking only inward is a mistake, he says. For innovation to flourish, organizations should consider developing concepts from inside and outside of the system. Part of this effort includes sharing advice and direction to launch innovations, offering access to data, and providing a place to test concepts.

"A startup company with the best idea in the world will get nowhere without a pilot site," he says. Zimlichman says he's working with some of Sheba's North American partners to change from a rigid model—closed to outside innovation—to an open platform.

Some American health system–based innovation arms already have a head start in this area, among them Summation Health Ventures of Long Beach, California. Summation was founded as a joint initiative venture between two California-based systems: MemorialCare and Cedars-Sinai and built upon MemorialCare's 25-year history of innovation investments.

"We're in a unique position," Summation board member Barry Arbuckle, PhD, president and CEO of MemorialCare, told HealthLeaders last year. "When startup companies come to us for funding, they get something that the big funding houses and angel investors can't deliver in ways that we can." That includes product development and positioning insights, collaboration with providers who will use their solutions, and access to clinical sites to test their innovations.

4. Establish a Physical Facility Devoted to Innovation
 

Another strategy Zimlichman suggests is to build a home for innovation.

"To innovate, you need a physical space," says Zimlichman. "You need to bring people together." Proximity creates a unique ecosystem that accelerates the innovation process. In addition to housing startups, he recommends inviting strategic partners—large corporations—into the space to help develop new products and stimulate investment opportunities.

At a time when U.S. health systems are trying to rein in expenses, building a facility to house innovation is rare. Intermountain Healthcare is an exception, opening The Kem C. Gardner Intermountain Transformation Center last year. The four-story, 120,000-square-foot facility on the medical center's Murray, Utah, campus was envisioned as a location that will bring together the people, resources, and ideas to change the future of healthcare.

5. Build Infrastructure to Accelerate Innovation
 

nnovation requires a nimble culture, an ethos that is often at odds with the practices and policies of American healthcare organizations and academic institutions, says Zimlichman. To stimulate innovation, change is required. Processes to onboard startups and institutional purchasing policies are among the issues that create roadblocks, he says, yet U.S. health systems are resistant to breaking the mold.

In addition, Zimlichman recommends:

  • Streamline Onboarding Processes: Once a startup and medical center agree to work together, typically it takes six months or longer to address legal issues and other challenges before work begins. The delay and costs are prohibitive for a startup, and slow down the pace of innovation, says Zimlichman. He recommends streamlining the onboarding process to jumpstart innovation.
     
  • Address Purchasing Issues: Medical center purchasing departments can create enormous obstacles to innovation, particularly when developing new devices, Zimlichman says. Removing those impediments—perhaps even the bidding processes—could be essential to success, he says.

Regardless of the approach taken, it can take up to seven years before an innovation center begins to see a return on investment, Zimlichman says. "Some of these hospitals don't have the bandwidth to financially support an innovation center for six or seven years before they start seeing a return on their investment."  To set up an initiative for success, he says, be prepared for the long haul.

“"If we want to redesign healthcare, we have to work together."”

Mandy Roth is the innovations editor at HealthLeaders.


KEY TAKEAWAYS

Transforming healthcare requires investing in digital health; U.S. health systems have an expansive view of this need.

Few U.S. healthcare systems collaborate with each other; changing that dynamic is essential to redesign healthcare, says global expert.

Welcoming external startups creates innovation synergies by connecting solutions with the providers who will use them.

U.S. health systems should consider streamlining the process to onboard startups and changing purchasing policies.


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