Why innovation in health care is so hard

Abstract

Health care in the United States--and in most other developed countries--is ailing. Medical treatment has made astonishing advances, but the packaging and delivery of health care are often inefficient, ineffective, and user unfriendly. Problems ranging from costs to medical errors beg for ingenious solutions-and indeed, enormous investments have been made in innovation. But too many efforts fail. To find out why, it's necessary to break down the problem, look at the different types of innovation, and examine the forces that affect them. Three kinds of innovation can make health care better and cheaper: One changes the ways consumers buy and use health care, another taps into technology, and the third generates new business models. The health care system erects an array of barriers to each type of innovation. More often than not, organizations can overcome the barriers by managing the six forces that have an impact on health care innovation: players, the friends and foes who can bolster or destroy;funding, the revenue-generation and capital-acquisition processes, which differ from those in other industries; policy, the regulations that pervade the industry; technology, the foundation for innovations that can make health care delivery more efficient and convenient; customers, the empowered and engaged consumers of health care; and accountability, the demand from consumers, payers, and regulators that innovations be safe, effective, and cost-effective. Companies can often turn these six forces to their advantage. The analytical framework the author describes can also be used to examine other industries. Cataloging the innovation types and identifying the forces that aid or undermine them can reveal insights on how to treat chronic innovation ills- prescriptions that will make any industry healthier.