Healthcare innovation is an extremely hot topic right now, ranging from the new Center for Medicare and Medicaid Innovation, FDA’s approach to approving therapies and devices, an entire issue of Health Affairs , and of course patient-centered medical homes and Accountable Care Organizations [Patient-centered medical homes are also known as Advanced Primary Care Model practices, and ACOs are a combination of delivery and reimbursement innovations.]
I’ve been working for many years to create value for patients and society by speeding adoption of these types of innovations by clinicians, other providers, patients, payers, regulators, communities, etc., and have found that healthcare innovations have at least three things in common:
1. Axes of Innovation - Primary, Secondary and Tertiary Benefits
UP Innovation: UP Innovations occurs when subsequent medicines in a class, (e.g. Beta Blockers for high blood pressure), have characteristics, (such as once-a-day dosing, and less side-effects or drug-drug interactions), that permits more patients to use the medicine correctly, and thus produce better outcomes.
OVER Innovation: OVER Innovations occur when medicines are discovered that treat the same disease through different mechanisms of action, such as Beta Blockers and ACE Inhibitors to treat high blood pressure.
OVER Innovation also occurs across industries and platforms when devices and other therapies are developed that compete with biopharmaceuticals - and vice versa. This occurred for erectile dysfunction (ED), when devices, (both the vacuum pump made famous by Austin Powers and implanted prosthetics), and an injectable medicine, presented different treatment options. These therapies all had certain characteristics that caused patients to not use them very widely - which provided the clinical opportunity for the oral medicine sildenafil (Viagra®) - and then the other subsequent UP Innovators in the PDE5 Inhibitor class of pills.
OUT Innovation: OUT Innovation involves the use of an existing therapy for completely new diseases or conditions. Sildenafil to treat early-stage pulmonary arterial hypertension is an example of this type of innovation. (You didn’t think I used Viagra® in the previous example just to be salacious did you?). Similarly, many medicines to treat cancer were originally approved for a specific type of tumor and then used for other cancers, or even for non-malignant conditions. (Oncology and immune disorders such as rheumatoid arthritis are also clinical areas where small molecules and biologics compete as UP and OVER Innovations.)
2. Innovations Enable Many Types of Benefits
Health information technology (HIT) is a great example of a class of innovations with broad enabling effects. At a fundamental level, having clinical information in electronic forms improves the efficiency of storage and transmission, and thus reduces the time (and costs) for copying, billing and looking for records, as well as minimizing the need for repeat tests etc. (This was one of the benefits of HIT that President Obama cited in a State of the Union address.) However, the value of electronic medical records (EMRs) and related HIT applications for patients and society is even greater than these direct benefits because it enables activities such as:
Furthermore, advanced HIT applications can enable overall healthcare integration and care coordination via care teams - which leads to better care for individual patients and more rapid adoption of evidence-based practices that improve quality and efficiency. These effects are particularly evident with telemedicine, which can literally force different clinicians and caregivers to work together as a team because they are connected via a sharing technology that clearly demarcates their roles, i.e. monitor/manager and actual deliverers of care. (The draft report Telemedicine’s use in Intensive Care Units describes an example of this in more detail.)
Payment Innovation Enables Quality Improvement
Payment innovations - if properly structured and implemented - can reverse these types of incentives and lead to less overall spending, as well as broader and more rapid adoption of quality improving practices. Such payment innovations could involve bundling reimbursements around an episode of care, (or treatment of a condition for a month or year), or across broader care teams such as the hospital, outpatient physicians, home health and rehabilitation. And, just to come full-circle, by creating the capabilities for monitoring quality and spending, HIT systems enable accountability of health systems, providers and clinicians - as well as payers, patients, and public health officials. That is, such monitoring can ensure that the care delivered in response to the payment innovations are quality and efficiency based, and don’t lead to rationing and budget cuts disconnected from overall costs or quality.
3. Change Adoption - Faster, Sooner, Better
Below is a simple graph illustrating the importance of strategies and steps to promote the adoption of innovation in healthcare. The two diverging lines shows why planning for and investing in change adoption are very important for actually changing clinician and patient behaviors.
The specific strategy illustrated in this figure involves creating and supporting champions for the innovation. These “change agents” are people who can connect to the targeted users and demonstrate the value of the innovation in a real-world way. The two curves in the diagram show the difference between the adoption of innovations when they are just released into the wilds of the healthcare system, (lower line), and when they are actively promoted with an adoption strategy. Specifically, the adoption of an innovation would proceed without these champions for change from point 0 to A1, B1 and C1, etc. But with champions, the path can proceed along the upper line from point 0 to A2, B2, and C2, etc. (The value of investing in the champions and change adoption strategies can be calculated by the vertical distance between the points A1 and A2, B1 and B2, etc.)
Value to Whom
This last point is crucial for adoption of healthcare innovations - such as the post-discharge care coordinators mentioned above - because many innovations may benefit patients or society, but to the individual adopting the innovation the costs would be greater than the benefits. This is what I call the “Value to Whom?” analysis since it highlights that an ROI calculation about an innovation that aggregates the costs and benefits for all stakeholder may be misleading if the costs are borne mostly by one stakeholder while the benefits are received mostly by another, i.e. their is a value mismatch across stakeholders.
Similarly, many innovations will present differential benefits (and ROIs) for different types of patients based on their clinical states. For example, while the team-based care embodied in patient-centered medical homes is good for all patients, it clearly should be of the greatest benefits to people with the most complicated and chronic conditions.
SUMMARY - The Healthcare System’s Bones are Connected Like a Skeleton (or Gears in a Machine)