Innovation in Healthcare – Challenges, Myths and Cures

Dave Scott
As the healthcare industry enters into a phase of major change, it prepares for numerous challenges.

Within the next decade, hospitals must prepare for five major challenges (1) in order to survive:

  1. Hospitals will redesign their current processes rather than build new facilities
  2. Physicians, RN’s, and physician extenders will do the work that fits their credentialing
  3. Hospitals will focus more energy on reducing readmissions
  4. Hospitals will focus more on disease prevention
  5. Some hospitals will inevitably fail

Nearly all of these challenges will be affected by reductions in reimbursements, new models of care, stricter compliance measures and millions of new uninsured patients. These unprecedented market changes will completely reshape healthcare as we know it today. It will be necessary for healthcare systems to develop links between performance and growth, in order to create a value-based strategy that spans the entire continuum of care. New strategies that instill innovation as a business competency and create optimal solutions for the future of healthcare must be employed.

Innovation in the healthcare community has been promoted throughout the marketplace for several years. So what are some of the myths that encircle the term innovation and how can they be overcome?

An article in Harvard Business Review (2) was the topic of discussion at a series of Healthcare C-Suite events which was promoted though the Chicago Health Executives Forum (CHEF) in Chicago, Illinois. Faithful+Gould is a strong advocate for this organization and fully supports its cause. The attendees included prominent executives from numerous healthcare institutions, along with individuals with various connections to healthcare and hospitals. Two myths generated the most conversation including:

1. Innovation is a random act

The healthcare organizations that were most innovative connected the process to their strategic plan and attributed it to their culture and leadership. Innovation was essential to execute their strategy and achieve future goals. Leadership allowed for a certain amount of risk to be undertaken that promoted a culture where success and failure were looked upon as part of the same process. Their belief was that one must try, sometimes fail, and try again in order to succeed. In nearly all cases, this philosophy and process began at the top of the organization and permeated throughout the ranks.

Executives recognize that their company loses ground when the pace of change outside the company is greater than the pace of change within. Innovation is not a random act; it emerges when there is a structure to inspire it. "Innovation the Process" happens through the work of developing ideas and turning them into valuable realities. Creativity is something people do by thinking, questioning, exploring and wondering which in turn produces ideas that are the raw materials of the innovation process. Companies and individuals sometimes set up an elaborate process to gather ideas, not realizing that this rarely leads to success. Innovation describes the finished results, not the initial ideas. It is the successful implementation of new ideas to deliver value that defines innovation.

2. You’re either an innovator or you are not

A recent McKinsey survey (3) indicated that more than 70% of the senior executives responding stated that innovation will be one of their top three growth drivers for their company in the next three to five years, as well as a means of adapting to the rapid pace of change. Their purpose for innovation was necessary for their organizations to survive. One key leadership trait that allows incremental innovation to occur is the ability to listen and understand what is important to patients and employees. Leaders must possess solid skills in communication, listening and collaboration in order to remove the roadblocks and create realistic timeframes for innovation to grow.

Several individuals believed that management involvement, visiting with the caretakers and conversing with the patients was one of the best means to advance the process. Leaders need to show their employees that they care and want to understand the obstacles that are holding their organizations back from advancements. In the healthcare community, real change happens at the bedside not in the boardroom. A culture can be changed and people can be taught how to become innovators through open communication and a structured implementation plan.

Every healthcare institution will need to focus and improve its operations to better serve patients and the surrounding community. Innovation leaders must set the course, define priorities, encourage disciplined failures but also celebrate successes for innovation to flourish. Action must be taken to make innovation happen because in today’s world, luck is no longer an option.


1 – Rachael Fields. 5 Ways Hospitals Will Change Over the Next 10 Years. Becker’s Hospital Review, September 14, 2010

2 – Scott Anthony. Ten innovation Myths. Harvard Business Review, October 28, 2011

3 - Joanna Barsh, Marla Capozzi and Jonathan Davidson. “Leadership and Innovation.” McKinsey Quarterly, 2008, no. 1