How To Be an Entrepreneur-Friendly Health System - Medcity News

Originally Published on Medcity News

From self-driving cars to AI-aided investment tools, innovation is seemingly everywhere. Venture capital continues to flood new startups looking to change the way we experience the world. However, there is one industry has continually lagged behind: healthcare.

And yet among the laggards, there are institutions who have embraced change.

Intermountain Healthcare and Providence Health and Services have created dedicated divisions within their organizations focused on encouraging innovation and working with entrepreneurs. Intermountain, for example, runs an annual Foundry program, sourcing the best internal ideas of its employees and providing them the time, tools, and resources to bring their ideas to fruition which can then be adopted internally and also be fully commercialized.

Providence Health and Services has a similar arm dedicated to sourcing and adopting external innovation. Dignity Health’s innovations division too has launched exciting partnerships with companies like Google and Uber and uses a rapid-to-launch approach known as “Run, Run, Jump” to vet new opportunities. However, these organizations tend to be the exception rather than the rule.

So what are the keys to being a health system that not only embraces entrepreneurship but also has the consequent structures in place to support it? There are three vital components needed for success: process, metrics, and resources.

The first piece that an organization needs to design is a transparent process around its goals. The health system should go through the exercise of determining why innovation will be helpful to the organization and ask:

  • What are the problem areas we are trying to solve for, and what have we tried that hasn’t worked?
  • Do we have the right people in place to allow for an innovative solution to be successful?

Having an understanding of the problem an organization is trying to solve is crucially important. Katherina Holzhauser, associate vice president of Innovations Operations at Intermountain Healthcare, recommends “not to isolate yourself in thinking about only the external market, but stay tapped into your organization’s clinical and business teams. That is where the greatest innovation will come from and will lead you to an understanding of where external innovation can fit in.”

Next, the organization needs to consider its risk tolerance with new innovation. Entrepreneurs may offer a solution that has immense traction and is being rapidly adopted by health systems all over the country, or, in stark contrast, may be approaching the health system to be their first major partner or pilot. By having a clear definition of the problem you are aiming to solve and the risk with which you are willing to approach innovation, the rest of the process will be easier.

Understand that different types of innovation will have different timelines and results from their pilots. For example, a device startup may require pilots that require IRB/human subjects approval and may often need patents and/or FDA approval. Alternatively, a digital health startup may be able to bypass FDA approval and regulatory restrictions but may face roadblocks in provider adoption and integration with clinical workflows, especially those that are IT-intensive.

Rich Roth, chief strategic innovation officer at Dignity Health, posits that traditional 18-24 month pilot periods are too long and “limit the creativity, lean methods, and real-time adjustments that provide huge value.”

“Instead of looking at metrics that take a long time to prove out, hospitals need to unpack those metrics with shorter-term objectives that take less time to indicate success.” Roth believes.

The second part of the process is sourcing. With the objectives defined, sourcing involves bringing in the right companies, based on the problem, and also the right internal champions to help the health system and entrepreneur find success. When looking to begin a new pilot, there needs to be buy-in for solutions at the right stage in the process. Some of the stakeholders will be users who need to understand the goal of the pilot and what is expected of them, as well as also having internal champions who will continue to drive the process forward, keep morale high, and work with the entrepreneurs through any issues that arise during the pilot process.

One consideration to note is that these stakeholders need to be brought into the process at the right time. There needs to be inclusion early enough to define a smart pilot, but not so early that frustration arises from thinking nothing is happening during the initial design period. To aid in combatting this, establish a clear process for scheduling and find the right balance of inclusivity and judiciousness, as one of the largest challenges faced by clinicians is a lack of time. Not building effective relationships and processes will create roadblocks and delays.

In tandem with a defined process, an equally important factor is determining the metrics around which success will be measured. By defining the goal metrics upfront, the health system can easily, and transparently, communicate with the entrepreneur around why or why not there will be a full-scale implementation.

Metrics should consider both clinical efficacy and business model evaluation. Clinical results should measure impact, usability, and specific clinical outcomes. The evaluation of the business model needs to include ROI, time saved/lost, and effects on revenue. Make sure that whoever will be implementing the full-scale implementation has input in setting the metrics from the onset.

One best practice we’ve seen is the approach taken by Dignity Health. As described by Sanjay ShahDignity Health’s director of strategic innovation, “we structure the system master services agreement prior to the pilot, allowing for an easy transition to a full-scale deployment without the further delays of negotiating a new contract, IT, or security reviews.” By defining the master services agreement or full-scale contract prior to the engagement, defined metrics can be built into the pilot and the execution of implementation is sped up immensely.

Finally, to be a truly entrepreneur-friendly health system, a health system must dedicate the resources to ensure success. This comes in three forms: funds, time and people. First, the organization needs to establish long-term funding, thus ensuring that support doesn’t run dry midway through a pilot of a new solution. The leaders on the innovation team should also work to facilitate the process to eventually ensure that a successful pilot has the funding to scale through an operational budget.

As mentioned in defining the process, having a dedicated clinical and business lead who will work with the entrepreneur to design a pilot that will ensure the best outcomes for the target population or clinical area is imperative. This should include the study design as well as a determination of the goals and metrics. Health systems should create dedicated time budgets for these business leads and clinical champions to assist the entrepreneurs without negatively impacting the day-to-day responsibilities of these clinical and business leads.

The end goal of a health system’s desire to be entrepreneur-friendly should be twofold. The first goal should be to successfully bring in new solutions that better the lives of clinicians, administrators, and/or patients. The second goal, and equally as important, should be to create a reputation as being an organization that embraces innovation, treats entrepreneurs with respect and support, and is transparent and expeditious in its process. By having a clear process, defined value metrics, and the resources to support entrepreneurs, health systems will be able to achieve these goals.