Technology also plays a part in the success or failure of such operations. This may not be immediately obvious to people in the health care industry, which is near the bottom of the ladder in terms of IT spending and uniform data standards.
Such obstacles contributed to the problems of MedCath, a North Carolina—based for-profit chain of hospitals specializing in cardiac surgical procedures.
In each of the 12 markets where it opened in the late s and early s, the company faced resistance from general-purpose hospitals. They argued that instead of offering cheaper care and better outcomes because of its specialized focus as the company claimed , MedCath was simply skimming the profitable patients.
In some cases, local hospitals strong-armed commercial insurers into excluding MedCath from their lists of approved providers, threatening to cut their own ties with the insurers if they failed to blackball MedCath. The resistance was further fueled by resentment among local doctors toward MedCath physicians, all of whom were part owners of the chain. The ownership issue also raised problems on another front.
Spurred by arguments that conflicts of interest were unavoidable at MedCath and other physician-owned hospitals, Congress in placed a moratorium on the future growth of such facilities.
But companies are far from helpless. A few simple steps can position your business to thrive, despite the obstacles. First, recognize the six forces. Next, turn them to your advantage, if possible. If not, work around them, or, if necessary, concede that a particular innovative venture may not be worth pursuing, at least for now. Ensuring that the 46 million or so uninsured people in the U. But is it achievable? Universal coverage is, after all, one of the most contentious political issues of our time.
Switzerland offers some possible answers. Although the Swiss government constrains the design of benefits, Swiss insurers have greater incentives to respond to consumer needs than do U. Giving U. We are already seeing this in the case of the increasingly popular low-cost, high-deductible health insurance policies offered by many employers. A system in which insurers set the prices that providers charge consumers is inefficient and a barrier to innovative attempts to integrate health care activities.
The best mechanism for transparency exists in the financial markets in the form of the U. Securities and Exchange Commission. While it has its flaws, the SEC generally ensures that consumers have adequate information by requiring companies to publish financial results that are verified by an independent auditor. MinuteClinic, a Minneapolis-based chain of walk-in clinics located in retail settings such as Target stores, avoided some of the obstacles that hobbled Health Stop in its effort at consumer-focused innovation.
Like Health Stop, MinuteClinic offers basic health care designed with the needs of cost-conscious and time-pressed consumers in mind. Although some doctors have grumbled that nurse practitioners might fail to spot more serious problems, especially in infants, there has been no widespread outcry against MinuteClinic, making the establishment of in-network relationships with major health plans relatively easy.
Companies are far from helpless in the face of obstacles to health care innovation. A few simple steps can position your business to thrive. Medtronic was one of the first makers of implantable heart pacemakers, but over the years, the Minneapolis-based company branched into other medical and surgical devices.
For example, when Medtronic expanded into implantable heart defibrillators, it worked directly with the surgeons who would be implanting them so that the company could identify problems and set procedures. And, of course, there was no effective Tums equivalent as an alternative. HCA originally known as Hospital Corporation of America successfully pioneered a business model innovation that allowed it to consolidate the management of dozens of facilities and thereby realize economies of scale unknown in the fragmented health care industry.
Instead, it grew mostly through expansion into underserved communities, where customers were grateful for a local hospital and where doctors welcomed the chance to work in modern facilities. The certainty of reimbursement from insurers and Medicare enabled HCA to borrow heavily for construction, and its access to the equity markets as a public company offered funding that was unavailable to nonprofit hospitals.
No criminal charges were brought against the company, and some people wondered whether a nonprofit institution would have paid so dearly for its alleged misdeeds. But the publicly traded company weathered the crisis and, with a new management team in place, has continued to perform well. The framework described in this article—the three types of health care innovation and the six forces that affect them—offers a useful way to examine the barriers to innovation in health care systems outside the United States, too.
For obvious reasons, the single-payer system hinders customer-focused innovation. But it also seriously constrains technology-based innovation.
Centralized health care systems, with their buying clout, also keep drug and medical device prices low—delighting consumers but squeezing margins for innovators. The centralized nature of the systems would seem to offer the potential for innovation in the treatment of diseases where a lot of integration is needed, but the record is mixed. Modified to fit the situation, this framework can also be used to analyze the barriers to innovation in a variety of industries.
Cataloging the types of innovation that can add value in particular fields and identifying the forces that aid and undermine those advances can uncover insights on how to treat chronic innovation ills—prescriptions that will make any industry healthier.
You have 1 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Government policy and regulation. Funding The processes for generating revenue and acquiring capital, both of which differ from those in most other industries.
Policy The regulations that pervade the industry, because incompetent or fraudulent suppliers can do irreversible human damage.
Technology The foundation for advances in treatment and for innovations that can make health care delivery more efficient and convenient. Accountability The demand from vigilant consumers and cost-pressured payers that innovative health care products be not only safe and effective but also cost-effective relative to competing products.
Universal coverage. A consumer-driven system. Market-based pricing. An SEC for health care. A version of this article appeared in the May issue of Harvard Business Review. Read more on Government policy and regulation or related topics Innovation , Organizational culture , Personnel policies , Competitive strategy , Customer experience , Business models , Healthcare sector and North America.
Regina E. 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. Donald Berwick. Complex systems of multiple actors and interest groups rarely change by fiat; they are more likely to change because of the accumulation of many positive deviations from tradition that prove themselves and gain support. Each small innovation pushes at some aspect of the system and ends up triggering greater change.
Cancer Treatment Centers of America set up late-stage treatment facilities bursting with innovation, including alternative and holistic practitioners working in teams with traditional physicians and paperwork simplification. The U. Blockbuster innovations come along, such as gene therapy, home diagnostics, or foods that reduce obesity, but if too big too soon, they butt up against establishments and interests. Innovation at any scale is the way to improve health care.
Rosabeth Moss Kanter is the Ernest L. Arbuckle Professorship at Harvard Business School, where she specializes in strategy, innovation, and leadership.
0コメント