Creativity before capital: Health systems and frugal innovation

What does innovation even mean anymore?

Everything in healthcare is deemed innovative. The word evokes images of technology and futuristic frameworks. Microchips, computers and servers get smaller while their storage capacity grows bigger.

Creation and growth tend to be linked with innovation. But this capacity of endless creation and growth also requires endless resources, which the healthcare industry just doesn't have.

Frugal innovation — doing more with less — redefines the traditional notion of innovation in healthcare. It is often discussed in the context of emerging countries and economies, such as rural China and India, and may provoke images of makeshift tools and technologies. A lack of resources calls for the industry to find new ways to do things.

"A lot of what's happened in frugal innovation around the world has had to do with countries that have resource constraints of many sorts: technology, water, you name it," says Marta Karlov, director of education of ThedaCare Center for Healthcare Value, an educational institute in Appleton, Wis. "They're forced to think through, how do we use something that's highly available and solve people's daily problems? In healthcare, as we start to become more constrained and the environment changes, we're seeing some very interesting innovations."

A constrain of resources, as Ms. Karlov says, spurs innovation. While it might not be as obvious as a shortage of running water, healthcare faces its own set of issues and constraints, such as changing reimbursement models and new care delivery demands.

In the face of these constraints and in response to market demands, the industry must, and will, innovate. But first, healthcare must sever ties that equate innovation with creation.

"The term 'frugal innovation' sounds like it's something entirely new and different," says Molly Coye, MD, chief innovation officer of UCLA Health. "Frugal innovation begins with the patient experience and the problem to be solved. It asks the question, 'How can we do this at the lowest possible cost and the greatest convenience for the patient and their family and still have high-quality results?'"

Redefining innovation
If the notion of creating something new is removed from the idea of innovation, then the largely accepted definition needs revising.

Anthony Chang, MD, chief intelligence and innovation officer of Children's Hospital of Orange County in Orange, Calif., says there are two big misconceptions about healthcare innovation. The first, similar to what Dr. Coye mentioned, is that it requires new technology.

"Innovation in healthcare should not be technology looking for a use, but rather a smarter use of technology," Dr. Chang says.

For example, certain telemedicine capabilities could be considered a frugal innovation as a way to decrease clinic visits, Dr. Chang says. Two-way video streaming has been used for years in other capacities, such as webcams. The application of this capability to ease delivery of a face-to-face healthcare experience, though, makes it innovative.

The second misconception is that hospitals and providers can only innovate if they have the financial wherewithal to do so. This means large academic medical centers and rural standalone hospitals — traditionally viewed as apples and oranges in healthcare — are largely on the same plane in terms of their need and ability to innovate.

Ms. Karlov agrees. "While there are some organizations that are in an advantageous market position and they can name their prices, what's happening in healthcare is that everybody is going to be feeling the resource constraint," she says. "So many changes are coming from [the outside]: bundled payments, payments tied to quality, the federal push toward ACOs."

Dr. Coye adds that while hospitals vary in their ability to allocate investment funds, patient concerns and needs are largely universal. They want high-quality care, accessibility, more information and a decent bedside manner and overall experience, among other things.

"There's a difference in [hospitals'] ability to invest, not just in frugal innovations but just in any innovation," Dr. Coye says. "On the other hand, the patients are largely the same. The patient needs are very similar. It can take just as long to get to a specialist in parts of Los Angeles as it does in central or rural California."

Innovation without technology
If innovation doesn't require new technology, does it require technology at all?

Eric Topol, MD, director of the Scripps Translational Science Institute and the Gary & Mary West Chair of Innovative Medicine at Scripps Health in La Jolla, Calif., argues that frugal innovation does. His definition of frugal innovation revolves around transforming technology to a consumer-level that allows individuals to be actively involved in their health and care. Rather than sophisticated healthcare technology, Dr. Topol says most people are already equipped with the one tool they need.

"There are many innovations that are smartphone-based that basically reboot how healthcare is provided," Dr. Topol says. "They're remarkably frugal. They leverage the digital infrastructure in the smartphone, and they basically give the consumer the answer to what they want immediately for a very low cost. That's the epitome of frugal innovation."

However, Ms. Karlov argues that technology is not a prerequisite for innovation. The ThedaCare Center for Healthcare Value is an educational resource that seeks to improve quality and reduce waste in healthcare. It does a lot of work with organizations on implementing Lean management strategies, an approach Ms. Karlov classifies as innovation.

"Lean is all about creating value for the patient or customer. That means providing high quality at the lowest cost by creating flow and removing waste in the process through the innovations of the staff," Ms. Karlov says.

Merriam-Webster would agree with her. In the dictionary, the primary definition of "innovation" is "the introduction of something new." Innovation and technology aren't inextricably paired. A new management process certainly fits the characterization.

"Use creativity before capital," says Ms. Karlov.

The ThedaCare Center for Healthcare Value sometimes hosts focus groups where participants are presented with an issue and tasked to come up with solutions. Ms. Karlov says that in coaching individuals to shift their mindset, people often produce effective solutions that have nothing to do with technology. This low-tech mindset is likely helpful in the long-run, as technology is not a silver bullet. Hospitals must find the money and staff to make that solution stick. "Technology is another resource that has limits within an organization. There are only so many people that can support it," she says.

Additionally, UCLA's Institute for Innovation in Health recently launched its Global Lab for Innovation, an active database of innovations in healthcare delivery from organizations across the country. Dr. Coye calls the lab a "repository" of frugal innovations in healthcare, not all of which require technology.

One such innovation is the Pregnancy Care Package, developed at Renton, Wash.-based Providence Health & Services. The program offers a care package for pregnant women that combines all service lines spanning prenatal, labor and delivery, postpartum and post-discharge phases into one team-based model. The program restructured organizational processes and introduced new roles, like patient navigators, to allow nurses to focus on more advanced tasks and increase patient capacity. Here, the innovation is the "re-engineering" of pregnancy care and bringing together all services at one point of service, making it easier for expectant mothers to navigate.

Another example comes out of Detroit-based Henry Ford Health System, which recently made slight modifications to its hospital gown to help alleviate some longstanding patient dissatisfaction. The new Model G gown is designed to wrap around patients so they are covered from all sides unlike the traditional gown, which remains open in the back. The gown, developed in the Henry Ford Innovation Institute, demonstrates how a slight alteration — rather than a reinvention of the wheel — makes a world of difference to patients.

Barriers to innovation
The push and pull of innovation lies in a catch-22 of sorts. The need for innovation is largely spurred by the push toward greater value at a lower cost, but there is a misaligning of incentives in reimbursement and financing.

"The principle barrier to frugal innovation is the old adage that one man's savings is another man's loss," Dr. Coye says. "When we reduce the cost associated with emergency room visits, hospitalizations and skilled nursing facility days, that challenges the finances of delivery systems, even while it helps the patient and the employers or the government program's financing programs."

Dr. Topol agrees, saying current hospital business models eliminate any incentive to adopt frugal innovations.

"The innovations I'm getting at are not warmly received by hospitals because they interfere with their reimbursement," Dr. Topol says. "It isn't in their interest to promote bedside ultrasound through a mini handheld device. That's not how they make money."

To incentivize frugal innovation, Dr. Topol says it must be focused on accessible technology geared toward consumers. "We have to make it so cheap that it's out-of-pocket-type cost," he says. Providing patients with the tools to manage their own health and leverage the digital infrastructure in a user-friendly and cheap way is the best method to foster widespread innovation.

Ms. Karlov and Dr. Chang disagree, saying leadership is the most effective tool to incentivize frugal innovation.

"It's incumbent on the innovation leaders and hospitals to foster and nurture the spirit of innovation, and basically allow innovation to be part of every healthcare stakeholders' and practitioners' DNA," Dr. Chang says.

More articles on innovation:

What healthcare wants from startups
7 common pitfalls of innovation efforts
13 hospitals, health systems named to InformationWeek’s Elite 100 for innovative tech use

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