Much has been written about the innovation imperative, but it is starting to feel like an echo chamber. For healthcare to truly be reinvented, innovation needs to happen at scale. Organizations need to start looking to innovation as the strategy rather than just part of strategy. Many people say “healthcare is different” and it is, but it’s not so different that it’s impervious to disruption.

Healthcare providers have historically been sheltered from traditional market forces by a combination of government regulation and the local nature of healthcare delivery. Primary care, which used to be the domain of independent practices, large groups, and health systems, has turned into an attractive market opportunity for private enterprise. These market conditions ushered in direct primary care practices, with the potential to disintermediate health systems from their referral sources.

Providence St. Joseph’s saw this as an opportunity rather than a threat and partnered with One Medical. Blue KC recognized they were facing a bleak future if they are not able to do more than finance care and expanded into care delivery. Adam Boehler, the Deputy Administrator for the Center for Medicare and Medicaid Innovation said at the 2018 ONC Annual Meeting that his job is to “blow up fee for service”. The landscape is shifting rapidly and those who are standing flat-footed are going to be left behind.

Those who are innovating on their core business stand a chance. Innovating on the core takes true bravery. Too many providers are attempting to row one canoe (fee-for-service) while building and rowing a second (value-based care) at the same time. Leaders need to have conviction about where the market is headed and organize their strategy to get there. They cannot wait for the perfect market conditions because they will never exist. Organizations can either dictate terms to the market or allow the market to dictate terms to them. For providers, this means net operating losses, capital investments, acquisitions, divestitures, partnerships, and large scale technology deployments as new operating infrastructure and new competencies are built.

It’s hard not to see the parallels between healthcare today and the auto industry. Tesla legitimized the electric car by producing vehicles that performed better than their gas-powered counterparts. Tesla doesn’t have the market share to threaten the incumbents yet, but it has the mind share. Many incumbents laughed at Tesla’s strategy, but others realize that electric is the future and are making big bets to fundamentally change their entire fleet. In the end, another technology may win, but it’s highly unlikely that the future will be gas-powered.

The future of healthcare belongs to the innovators. Transforming the way care is delivered, financed, and experienced will not be easy. Innovation is inherently risky, but the biggest risk in today’s environment is choosing not to change.

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