For decades, healthcare has searched for the next breakthrough. Better therapies. Better technologies. Better payment models. Better data. More recently, new advances in artificial intelligence. Each has created value. However, none has fundamentally solved healthcare’s greatest structural challenge.
Healthcare is one of the few major industries in which those closest to the problems often help create innovation but do not consistently share in the value that innovation generates.
Health systems identify the most important clinical and operational challenges. They generate much of the data that informs innovation. Their clinicians help design and refine new technologies. They validate solutions in real-world practice. They assume the risks of implementation. And they often become the earliest adopters and purchasers of successful products.
Yet when those companies succeed, the economic rewards flow primarily to technology companies and investors. Outside capital has an important role to play in healthcare innovation, but when ownership shifts toward firms whose primary obligation is to generate returns for investors, incentives can become misaligned with the needs of patients, clinicians and health systems.
The rise of private equity in healthcare illustrates the concern: ownership models designed to maximize investor returns have repeatedly raised questions about whether they reliably improve quality, safety, affordability, human experience or caregiving. Too often, health systems contribute the problems, data, clinical expertise, validation, implementation risk and market access that make innovation possible, but they receive little more than another software subscription and another invoice.
This is more than an unfortunate consequence of innovation. It is a market failure.
The challenge is not that healthcare lacks brilliant entrepreneurs or visionary investors. Nor is it that health systems fail to innovate. The deeper problem is fragmentation. Nearly every health system is trying to solve the same problems, yet each evaluates technologies independently, pilots independently, negotiates independently, implements independently and learns independently. Rather than looking at the proverbial elephant as a whole, we insist on only concerning ourselves with the parts.
As a result, we duplicate work, weaken purchasing power, slow the spread of successful innovations and transfer enormous economic value to others. This model may have worked when innovation moved slowly. It is increasingly strained as the pace of technological development accelerates.
AI illustrates both the opportunity and the challenge. While it remains early in the adoption curve and is far from solving healthcare’s structural problems, AI has the potential to dramatically lower the cost and speed of developing new products, tools and services. As that happens, the scarce resource will not simply be innovation itself. It will be the ability to identify which solutions address meaningful problems, integrate them into clinical workflows and scale them safely across complex organizations.
In that world, AI cannot sit apart as a separate, “nice-to-have” strategy. It must be embedded in enterprise strategy, across service lines, clinical practices and operations. The next great advantage in healthcare will not belong to any single organization with the most advanced technology, but to the network that can learn, coordinate and apply intelligence together. We need to move from a hoarding mindset to a multiplier mindset. The future will belong to the network with the greatest cooperative intelligence.
For years we have spoken about building learning health systems. That work remains essential. But today’s challenges extend beyond the boundaries of any single organization. The future demands something larger: a Learning Health Economy.
A Learning Health Economy is one in which health systems collaborate and where that collaboration creates value. Together, they identify shared problems, invest, validate technologies, openly share implementation learning, coordinate adoption and participate in the economic value created by the companies they help build.
This is the Cooperative Advantage. It is not simply a venture fund or a purchasing model. It is a new institution designed to correct a market failure by aligning the interests of health systems, entrepreneurs, investors, clinicians, patients and other stakeholders around a common purpose: solving healthcare’s most important problems while ensuring that those who help create value share more fairly in the value that results.
Instead of asking, “should we buy this technology,” we should begin asking, “should we build this company together?” That simple shift changes the relationship between healthcare and innovation.
The future of healthcare will not be defined solely by better algorithms. It will be defined by better institutions — institutions that help organizations learn together, solve together, build together and create value together. Building a Learning Health Economy begins with the simple idea: Cooperative Advantage.
Peter J. Pronovost, MD, PhD, is the Chief Quality & Clinical Transformation Officer at University Hospitals, Cleveland.
Bradley Bond is the Chief Financial Officer at University Hospitals, Cleveland.
David Sylvan is the Chief Strategy, Innovation & Marketing Officer at University Hospitals, Cleveland.
Kipum Lee, PhD, is the President of UH Ventures, the innovation and commercialization arm of University Hospitals, Cleveland.
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