Health, Technology and the Forgotten Stepchild of Innovation

Extending innovation to the business of health and wellness

The headlines are clear.  Digital technology is transforming the way we measure blood pressure, body temperatures, blood sugar and other clinical indicies.

Image credit: Getty Images

And they can be tracked with the simplicity of your smart phone.  We are on the verge of the “quantified self” and health innovative has rightfully staked out claims around medical and technology breakthroughs. But when it comes to innovating business models for healthcare delivery, it appears we have failed to keep pace with clinical innovations, and surprisingly with most other industries.

This is not insignificant.

The changes, frequently only marginal, in patient outcomes associated with “digital health” are important. But the quantum shifts that can emerge from advances in healthcare delivery have the potential to offer even bigger changes.  Changes that don’t rely on the “what if” of future technological innovation but live in the “real world” of practical application.  Simply put, they already exist, but fail to be implemented.

I recently  sat down with Faisal Hoque in his Stamford, CT offices and talked about healthcare business innovation. Faisal is an entrepreneur, thought leader, author of several business books, founder and CEO of BTM Corporation, and founder of a research think tank – the BTM Institute. Two of his most recent books, The Power of Convergence and Sustained Innovation, take readers on a journey through best practices for creating business innovation with technology.  His vision of health innovation wasn’t with a smart phone, but with a sharp pencil and a smart mind.  Using his books as a backdrop, here is what we discussed:

The “quantified self” must include the “quantified system”

Let’s analyze the healthcare delivery system from the perspective of information flows. We have a wide variety of players: doctors, hospitals, insurance companies, employers, government and researchers, all operating in an environment that makes up a complex supply chain.  And for this complex supply chain, transparent business models and processes need to be established to enable collaboration.

Healthcare services spent less than one tenth what banks and other industries spent on technology investments to create better information flow and cross-boundary collaboration. Various studies have yielded this alarming picture:

• Every year medical errors cause 98,000 deaths (some studies suggest the number is twice that) and one million injuries.
• Medical errors kill more people each year than breast cancer, AIDS, or motor vehicle accidents.
• Thirty to forty percent of the money we spend on health care – more than half a trillion dollars a year – is spent on costs associated with “overuse, under-use, misuse, duplication, system failures, unnecessary repetition, poor communication and inefficiency.”
• One-fifth of medical errors are due to the lack of immediate access to patient information.

Eighty percent of medical errors were initiated by miscommunication, including missed communication between physicians, misinformation in medical records, mishandling of patient requests and messages, inaccessible records, mislabeled specimens, miss-filed or missing charts, and inadequate reminder systems.

• Three out of every 10 tests are reordered because results cannot be found. Patient charts cannot be found on 30 percent of visits.

The problem is that vital information is missing through out the entire supply chain.  What information is available must be transferred laboriously by paper; databases in hospitals and doctors’ offices are often unable to talk to each other, because there are no data standards.

In some settings doctors and nurses spend as much time on paperwork as they do treating patients. Did you know that the 130,000 pages of Medicaid and Medicare rules and regulations are three times the size of the Internal Revenue code? Did you know that a Medicare patient arriving at the emergency room must sign eight different forms?

When all of this is resolved, and we think it will be eventually, the real innovation will not be about new healthcare technology. It will be how the medical community rewires the way it works and collaborates by innovating business models with streamlined organization, processes, and automation.

Business innovation for healthcare delivery

We have to start believing that patients should have access to their medical records and be full participants in the health care process. This means that healthcare services must maintain systems that provide full accessibility to physicians, clinicians, and patients respectively.

As Americans have learned through the health care reform debates over the last several years, achieving this level of transparency isn’t easy.

Legacy health records and medical delivery systems were never designed for transparency and portability. Actually, they were designed precisely with the opposite intent. The result has been a collective system that isolates information from the people who need it to make faster, better decisions. This chaos literally costs billions of dollars annually in bloated health care expenses.

As an example, today, a hospital can easily develop better patient information management that gives better control over the dissemination of patient data and expediting decision-making.  And that will:

• Reduce patient errors through electronic physician order entry.
• Eliminate of transcription errors.
• Reduce pharmacy errors because all prescriptions are sent electronically.
• Reduce dosing errors in pediatrics, where dosing is calculated by weight and age.

Fewer patient errors means lower costs and better outcomes. Administratively, the same data can be used to measure and manage the hospital’s delivery of services.

A real-life case study 

Dr. Richard Salluzzo is a double board-certified physician and the former CEO of Wellmont Health System, a thirteen-hospital system with 7,000 employees and facilities in Tennessee and Kentucky. He discovered the need to change the application of technology after changing his organization’s objectives to focus on customer service. More significantly, he discovered that people approached technology differently when the mission objectives changed.

 “By concentrating on customer service excellence, we increased our patient volume, and in turn our revenues. I used tools to measure and to benchmark the quality of our services against other hospitals in the U.S. Our emergency department went from 60,000 visits annually to 92,000 annually,” Dr. Salluzzo said in an interview with the BTM Institute. “ER patients saw a doctor within forty minutes. We had a 90 percent or better score for our ER customer service.”

Dr. Salluzzo doubled the company’s revenues and made it profitable. He explains:

 “We track metrics on everything we do. That is one of our cardinal principles and part of our business strategy. We strive to get reasonable benchmarks wherever possible. For example, we try to answer every call light within thirty seconds. We look at the number of falls. We put in room service so patients can order food from 6 a.m. to midnight. This process has empowered our staff to speak with patients and to manage their diet as part of a team with a clinical nutritionist. Our price per meal decreased from $1.80 to $1.60 with room service. Room service has taken a lot of work off nurses. We now provide better meals at a lower cost and with less waste.^”

Technology enables all of this, of course. The important lesson here, however, is that technology alone accomplishes little. The real value comes in how people work.

“I’m all for technology automation,” Salluzzo says. “Many doctors and administrators view business technology as a panacea. If you automate a bad pharmacy process, for example, then you’ll have a hard time correcting it. We decided to clean up many of our processes before we automated them. We couldn’t manage our finances without technology. Here it creates process in and of itself.”

 The promise of tomorrow

I like tomorrow.  I’m betting on the future of the quantified self.  But let’s not forget about managing an inclusive system of health that includes technology and business innovation that, together deliver on the promise of improved healthcare.