Skip to Main Content

The term “innovation,” once considered an insult in religious sectors, has garnered a cult following in health care. Dozens of health innovation accelerators, incubators, labs, and centers now exist in universities, nonprofit institutions, and corporations across the country, and new ones are emerging all the time.

It is easy to understand why: the promise of innovation is astounding. Innovation done well can improve health care outcomes, decrease costs, serve more people, create market share, and help institutions gain cutting-edge reputations. And as health care spending approaches 20% of the U.S. economy, it’s apparent why the concept holds so much appeal for decision-makers and innovators.

Yet innovation theater and liberally labeling projects as “innovations” pose threats of equal proportion. We believe there is value in innovation and want to protect it, but to do so it’s important to discern what it really means in health care.


Health care innovation

In economics, innovation refers to how the introduction of a new or improved good or service disrupts the relationship between a buyer and a seller in an otherwise stable market. An innovation is incremental if the new good or service is more competitive in an existing market and thus steals market share. It’s radical if it creates a new market and makes competitors technologically irrelevant.

The challenge in applying this definition to health care is that the relationship between the “buyer,” in this case the patient, and the “seller,” in this case a doctor or other health care provider, is convoluted by many other players. Patients don’t buy good health — they buy health care goods and services, such as advice and pills and procedures. And they buy them from providers who work in health care institutions that negotiate prices with others who may actually be paying for the care.


In the most simplistic interpretation of the U.S. health care market, there are at least four entities in this economic relationship — patients, physicians, health care institutions, and payers. That means health care innovation must look fundamentally different than direct-to-consumer innovations in e-commerce or social media advertising.

To explore the dimensions of health care innovation, we analyzed 123 peer-reviewed articles to determine the attributes of health care delivery that matter most to patients and physicians. Writing in the journal BMJ Innovations, we described a new frame for evaluating health care innovation: Does the new good or service ease tensions between patients and physicians?

Patients and physicians have unique preferences that often conflict during their interactions. Patients want assurances that the recommended treatment will produced the desired outcome, while physicians are trained to avoid giving definitive assurance and focus on the technical aspects of the condition itself while seeking to provide the highest quality treatment possible. During the process of care, patients seek to be uniquely seen and heard by their physicians as humans with a medical condition, whereas physicians engage with patients as clients and seek to fulfill an expectation of service.

Patients focus holistically on the structure of care and prefer care that fulfills their medical needs quickly. Physicians also prefer a smooth experience, but tend to focus on the internal team dynamics and removing barriers to smooth communication.

These differences in preferences are sources of tension throughout the spectrum of health care delivery. Patients who seek a physician’s guidance are treated by individuals who are subject to legal and financial pressures. This leads to mixed incentives, and you don’t have to dig too deep to find evidence of physicians missing diagnoses because they didn’t have enough time with a patient, prescribing expensive treatments that patients don’t need, assigning inaccurate billing codes to increase reimbursement, over-prescribing care to avoid malpractice suits, and the like. As a result, patient care falls short of its potential.

True innovation in health care, then, may be better seen as easing tension between stakeholders. Goods or services that satisfy these needs and are clinically viable are likely to improve patient satisfaction, be taken up by physicians and health care institutions, and be reimbursed by payer groups.

This frame recognizes that the greatest challenge to U.S. health care today is not whether we have the newest digital health app to count steps but whether the incentives of patients, physicians, and payers are aligned. Applying it to innovation, an incremental health care innovation would ease tension between stakeholders, whereas a radical or disruptive one would entirely remove or reframe a point of tension.

True innovations for health care

Here are three ways to better identify, develop, and support innovations that improve health care delivery:

Include patients in the innovation process. If the secret to good innovation in health care is easing tension between stakeholders, health innovators must start with the needs of everyone involved — patients, nurses, doctors, custodians, administrators, payers, parents, whomever. The main goal is to let the needs of patients and physicians guide the design, development, and deployment of health goods and services. While other industries accept this approach naturally, it is difficult in health care.

Here’s a case in point: A 2015 cross-sectional survey of 6,536 patients from 276 hospital departments across seven countries showed no substantial patient involvement in improving patient-centered care and quality management. Physicians at these hospitals were essentially dictating patient-centered care without talking to patients, letting their perceptions and biases replace actual needs and expectations. The end result of such efforts is likely to be something that doesn’t ease tensions on the supplier side, but rather satisfies the supplier’s needs.

Question how an innovation eases tension. If a good or service is new but doesn’t ease tension, then it is really an invention. If a good or service improves an existing process but doesn’t ease tension, then it’s a quality improvement. This isn’t meant to dismiss the importance of these contributions — we all benefit from new technologies and efficiencies — but to describe the work that still needs to be done to make new goods or services rise to the level of true innovation.

Seek innovation beyond digital health. Much of today’s health care innovation is centered around digital health, mainly because money is flowing in that direction. However, when innovation is framed around easing tension between stakeholders, non-digital opportunities to innovative begin to emerge.

A straightforward example of this is physicians who make house calls. When done well, this eases tension for all stakeholders. Patients, who want more time to converse with a physician and high-quality care, receive both of these from the house-call-making primary care physician — and also avoid the hassle of traveling to the doctor’s office. Physicians, who want to provide the highest quality treatment possible, are able to observe patients in their homes, have greater empathy for their lives, and provide more detailed and nuanced care. Payers, who want to deliver evidence-based medicine in the most affordable way possible, are able to remove facility costs and reimburse at a lower rate for evidence-based care.

While reasonable people can disagree on whether this is incremental or radical innovation, it strikes a strong contrast to many of the “innovative” digital apps floating around. But this contrast is important, because it rescues innovation from being simply another buzzword and returns it to the important economic concept that health care desperately needs.

Innovation is essential to any well-functioning industry, as disruption prevents the market from stagnating and drives improvement. While many industries have a one-on-one relationship between the person and the good, health care has many stakeholders at the point of purchasing, all of whom must receive benefit without compromise. That’s what true health care innovation does.

The next time you hear about a “health care innovation,” we hope you pause to critically assess what tension is being eased through this innovation. Perhaps then this important concept can be saved from buzzword purgatory.

Joseph S. Salama is a senior consultant at Jump Associates, a design strategy and innovation consultancy in the Bay Area and an adviser for the University of California, San Francisco’s Health Hub. Alex Lee is a senior data scientist at Bark. Ashkan Afshin, M.D., is an assistant professor at the University of Washington’s Institute for Health Metrics and Evaluation. The authors previously spearheaded the institute’s innovative machine learning and artificial intelligence projects.

  • Innovation originally meant: “restoration, renewal”. Perhaps it is this “restoration and renewal’ that healthcare so desperately needs right now. The example of house calls is an excellent one for that return to saner days.

Comments are closed.