Innovation in healthcare, especially in care delivery organizations such as hospitals and physician offices, takes time and planning. This post presents unobvious innovation tips that help innovation professionals deploy solutions that achieve patient satisfaction and outcomes goals.

Here are the main topics we’ll be discussing in this post

  1. How is Healthcare Innovation Different and Why is it so Hard
  2. What Healthcare Innovation is NOT
  3. The Healthcare Innovation Lifecycle
  4. Barriers to Successful Innovation in Healthcare
  5. Top 3 Considerations for a Successful Implementation
  6. Conclusion

As more and more challenges are presented to the healthcare industry, leaders and policymakers are looking for ways to meet unprecedented challenges. As a result, innovation is a focus for improving the quality of healthcare delivery and tackling emerging challenges. We are living in the “innovation age for healthcare delivery”[1] but innovating in this sector is not easy.

To improve the odds of finding and deploying innovative solutions in a healthcare system, we’ve put this guide together with some unobvious but practical advice.

How is Healthcare Innovation Different and Why is it so Hard

Deploying innovations in a healthcare delivery context is different from other industries and arguably harder to implement.[2] The key differences between healthcare and other industries’ innovation dynamics include:

Errors and failures are more impactful.

Unlike other sectors, health innovators’ decisions often impact people’s health, safety, or well-being. Innovations in healthcare carry a risk factor[3]. A game developer can tinker with new technologies and run trials with real people and easily go back to the drawing board in case of a glitch – a healthcare innovator might not have that option. Many innovation failures occur due to a ‘top-down’ rather than ‘bottom-up’ approach where stakeholder feedback is of utmost importance in decision making in the latter. A pertinent case study in this regard is the £10 billion disasters at the NHS in 2002.[4]

Intermediated decision-making.

Unlike non-healthcare sectors where consumers make direct purchasing decisions, patients and their caregivers do not always have direct decision-making authority in all aspects of their healthcare. For example, being on a specific medication, requiring a specific medical device, or even something as simple as getting to choose their doctor is often outside their control. We say healthcare is an “intermediated” sector because the decisions of which products and services are offered to patients are made by doctors, insurance companies, and often their employers’ choice of what they’re willing to pay for rather than patient preference or choice. Innovators who understand intermediation will realize that they need to serve multiple constituents – not only are patients an important constituency but, in many cases, their health insurers and employers that pay for the innovation are even more important factors. For example, when Apple sells an iPhone to a customer, they don’t have to worry about whether the buyer’s employer or insurer will pay for it – Apple just needs to convince the customer. But when a hospital or healthcare delivery innovator creates a digital therapeutic, they need to consider not only the needs of the patient but the “buyer” chain between the patient and the innovation that will need to pay for it. A good example is how prescription drugs are sold to patients and HDOs – it doesn’t matter how much a patient wants or needs a drug if the insurance company, which pays on behalf of employers or the government, will not cover the medication in a drug benefit. The Open Decision-Making framework developed by John Ousterhout is also a very relevant tool that can help in reaching the best option and paving the way for a smoother implementation.[5]

Fragmented buyers.

The U.S. healthcare industry is highly segmented, featuring small (less than 3 doctors’) practices, small independent hospitals, and hundreds of digital health companies[6]. Unlike other industries, say the airline industry, healthcare is a completely fragmented show. This makes it a herculean task for any single innovation to penetrate the industry’s thousands of outlets.

Because of this, it’s often really important to make sure that there is a more centralized process for both buying and selling. This is why a centralized procurement process is so important, and one of the things that companies are often going to make good use of. If this is done right, it generally has a way of ensuring that everyone benefits more, including patients as well as businesses themselves. Keeping open to this kind of process is therefore a really good idea.

Higher regulatory burdens.

Healthcare is one of the most heavily regulated industries in the U.S.[7] Bearing the shared regulatory burden created by FDA, CMS, FTC, and other governmental and self-regulating organizations requires innovators to be more creative and innovation purchasers to be more discerning. Compliance with a multitude of regulatory bodies’ growing requirements differentiates the healthcare sector from some other industries. It also increases the costs and lead times to reach the market. Innovating in such a demanding environment is more challenging.

High costs.

Healthcare is a capital-intensive industry.[8] Unlike other industries where creativity alone can be a winning factor, innovations targeting healthcare professionals need sizable investments to take off the ground. It costs almost half a million dollars just to develop one digital health app – and that’s before any money is spent on promoting, sales, or support.[9] Setting up a brick-and-mortar facility or innovating in a large healthcare organization can easily mean investing millions of dollars.

What Healthcare Innovation is NOT

Let’s start with a reasonable definition of innovation in the healthcare context. According to the European Medical Journal, “An innovation must be something truly new or at least significantly different, applicable to healthcare, and provide a benefit to the field, with patients at the center.”[10]

Going a step further, the Future Health Journal stated that innovation is a combination of 3 elements: invention, adoption, and diffusion.[11]

  1. Innovation in Healthcare is NOT a mere random act of creativity. It is important not to confuse innovation with creativity. According to Govindarajan[12], the major difference between the two is execution. Creativity is novel ideation and innovation is the execution of that idea to materialize it into a product, service, or process that aims to improve the “quality, safety, outcomes, efficiency, and costs.[13]
  2. Innovation in Healthcare is NOT just product-related. Healthcare delivery innovation is not necessarily always a flashy gadget. It can also come in the forms of a “new concept, idea, service, process, or product…” as well.
  3. Healthcare Innovation is NOT lead, rather managed through shared leadership. Shared leadership is the opposite of a one-man show. It is the idea of delegating authority to several individuals in their areas of expertise[14]. This concept is even more relevant in the healthcare innovation industry where multidisciplinary teams are formed to catalyze especially an innovation’s ideation and implementation stages.[15]

Now whenever someone tries to pass off something as a health innovation, you can weigh it on this scale and accurately know whether it’s an innovation or not.

The Healthcare Innovation Lifecycle

This is the process that a successful healthcare innovation should go through:

Innovation Expectations

The end goal of every innovation must be the end users’ expectations, and in many cases, the innovation buyers’ expectations (because of intermediation). It must fulfill the target users’ needs and solve their problems but also must prove outcomes to employers and insurers that may be asked to pay for it. Therefore, the first step in the innovation lifecycle is defining measurable patient Innovation Expectations – The end goal of every innovation must be the end users’ expectations, and in many cases, the innovation buyers’ expectations (because of intermediation). It must fulfill the target users’ needs and solve their problems but also must prove outcomes to employers and insurers that may be asked to pay for it. Therefore, the first step in the innovation lifecycle is defining measurable patient outcomes and considering who cares enough about that outcome to pay for it. For example, will a hospital initially pay for the outcome and then recoup the expense through an insurance reimbursement or will the outcome be directly paid for by the patient through their own pocket? Innovators should separate their research and development efforts into technological innovations (things that they build or buy and introduce to their patients and customers) and psychological Innovations which are more focused on how patients and customers feel about your institution[16]. By setting the right expectations around technological vs. psychological innovations institutions can significantly reduce costs while simultaneously improving patient experiences.[17]

Innovation Discovery

With a clear set of target expectations, the next step is to explore and catalog a reasonable subset of the available options in the market that can help you achieve the measurable innovation expectations defined in the first step. . A wider search base affords more options but every option also takes more time to evaluate. Look at discovery sources that support social proof, such as ratings, referrals, and end-user reviews to help with downselecting. Having more options should probably not be the goal – doing minimal discovery with social proof is the goal.

Innovation Intelligence Evaluation

It is important to select the right evaluation facets to pragmatically evaluate all the innovation tools shortlisted in the previous stage. Evaluators should consider both quantitative as well as qualitative tools to uncover the innovation that suits their unique context.

Innovation Pilots and Early Adoption

Before you invest any further into your innovation, it is important to pilot test it and see how it will actually roll out in your organization. Data from your pilot phase will also provide an important input to the evaluation process for even better results. When executing the expectations and discovery steps, pay special attention to sources that help you discover pilotable innovations rather than just listing all available options.

Innovation Decision Support

Using knowledge emerging from Steps 1 to 4, now it is time to evaluate all the options’ value and benefits[18] using established decision-making tools like the IBIS[19], OKRs[20], and Vroom-Yetton decision-making model.[21] If you’ve done your due diligence in selecting the right evaluation frameworks and tools, it will be easier to make objective decisions using a decision framework rather than using consensus-based opinions.

Innovation Procurement

The ever-increasing cost of healthcare delivery has put pressure on the innovation procurement function to bring in the best possible value.[22] The right innovation procurement system can earn many benefits for the healthcare delivery organization, including significant cost efficiencies and a reduced impact on the environment.[23]

Innovation Diffusion, Adoption, and Implementation

After you have finalized the innovation, the next challenge is to ensure that it fits in your existing systems and culture. Your innovation’s success hinges on customer adoption rates and demands concerted efforts by the entire team. There are a number of factors that can have a direct impact on the success of your implementation including management’s support, adequate funding, and a conducive implementation climate.[24] Everett M. Rogers’ Diffusion of Innovations[25] theory is a great resource to help you improve the diffusion rates in your organization. The unparalleled champion of innovation, Thomas Edison once said that

Innovation Insights and Recognition

Once the innovation has been reasonably diffused and starts achieving its objectives, it’s time to glean insights from your success to make it repeatable for future projects.[26] It’s also important to recognize the efforts and commitment of your team as well as your stakeholders.

Innovation Termination

A successful innovator not only knows when to onboard an innovation but also when to terminate it. That termination can be in the shape of exit, retirement, or failure of a certain innovation. A timely termination helps the organization focus only on the significant technologies by dropping the obsolete elements before they become a liability.

Innovation Careers

An innovation manager should stay aware of the individual career development of her innovation professionals if she wants to retain them for future ambitious projects.[27] It is also very important for innovation leaders to invest in their employees’ development in order to keep them committed to the organization’s mission.[28]

Return on Innovation

No innovation can survive unless it is financially feasible for your organization.[29] At this step, you will run detailed financial analyses to make the case to convince your investors and financial decision-makers. After the innovation has been procured, continuous financial analyses will be required to monitor the project’s financial performance.

While discussing the innovation lifecycle process and its steps, it is relevant to put in a soft reminder that sometimes you may be in need of innovating your innovation process. You will need an entirely novel way to look at the way you are managing your innovations. A very good example in this regard is how Harvard Medical School successfully innovated its innovation process and reaped its fruits.[30]

Barriers to Successful Innovation in Healthcare

People often think of innovation as being groundbreaking or novel inventions. Innovators focus on initiatives that might shake up the industry. A large number of innovations, which might be easier to deploy and succeed, come in subtler forms and shapes. Improvements in your procurement process and creating a harmony between your legal and information security functions are two good examples. Onboarding new services and solutions are innovations, too.

Here are 5 innovation roadblocks you need to stay mindful of

Barrier #1: Your procurement and the RFP process is built for a non-digital age.

A healthcare system that plans to innovate needs to have an innovation-friendly procurement process. An outdated procurement system can itself become a hurdle in the innovation journey of the organization. The potential of an innovative procurement needs to be fully realized as it is known to foster innovation and improve the quality of services.[31]

Managing the legal aspects of running a successful healthcare system is a complex task.[32] It is common for healthcare delivery organizations to run into legal issues.[33] As a natural result, legal complexity is a barrier to innovation diffusion in the healthcare industry.

Barrier #3: Focus on information security at the cost of integration.

More than 250 million healthcare records have been breached between 2009 and 2020.[34] Resultantly, healthcare managers have focused their energies on information security. Since integration increases a system’s vulnerability[35], healthcare information security teams are focused on keeping the data safe, which comes at the cost of integration.

Barrier #4: Focus on bespoke development instead of integration.

There’s no need to reinvent the wheel every time. Institutions’ innovation models need to understand that instead of going only for bespoke development, existing innovations can be integrated with the current systems.[36]

Barrier #5: Lack of integration with external stakeholders.

It is important for a healthcare organization to ensure integration with external stakeholders including manufacturers, vendors, distributors, regulators, and government bodies.[37] Lack of integration between your information architecture and external innovators is also a barrier to successful innovation.

On your innovation journey, sometimes the most innovative thing your institution can do is to remove the barriers that are slowing down your progress.

Top 3 Considerations for a Successful Implementation

When you’re planning to implement your healthcare innovation, there are a few things that you should take care of, for increased chances of success. Here are three suggestions that chief innovation officers at multiple healthcare delivery organizations have shared with us:

Quantify the Problems

Successful innovation is always a result of a real problem and attempts to solve it. On your health innovation journey, quantify the problems you’re trying to solve and assign measurable KPIs to each part of the solution. [38] [39] This practice will give you a clear progress chart of what your solution is capable of doing and what still needs more work. Quantification also involves collecting granular analytics for analysis and further improving your processes. An example of how the Malaysian Government Hospital solved a repeated problem of HIS implementation provides input on how quantification of problems can help us reach out to solutions to help those at the frontline of care delivery.[40]

Be Systematic with Your Expectations and Goal-Setting

Pick up a proven goal-setting framework such as Objectives and Key Results (OKRs) that can tie to measurable patient outcomes goals. Quantifying your problems/goals and choosing a systematic framework will enable you to make opinionated, but evidence-backed, decisions about which interventions and innovations to experiment with.

Treat Your Innovations like a Scientific Experiment

The centuries-old scientific experimentation process is the right way to approach your healthcare innovation. It helps you determine whether it is a failure or a success and to what degree.[41] So, just like in a scientific investigation, your problem defines the thesis or subject area, your expectations define the data gathering criteria tied to a specific hypothesis, and the innovation pilot or evaluation phase is the testing of the hypothesis against your expectations to see if it was successful or not.[42]

Having a time-tested innovation system in place is the key to success in this area. For example, here is a short post on how Providence innovates. A closer look will tell you that they have a well-defined process to take up new ideas and follow them through.


Many healthcare innovation professionals opine that our industry is lagging in terms of technological innovations. Gil Bashe, a seasoned Health IT enthusiast, laments the current state of innovation in his article titled, “Cause of Death: Fax Not Delivered”[43]. This post shows a typical case of the stark difference between healthcare organizations’ ambitions and their unwillingness to part from obsolete technologies.

To help you throughout your health innovation journey, we have developed Medigy, a robust crowd-sourced, and peer network-based platform to thoroughly evaluate technology before going into the procurement and diffusion processes. The right decision can save you big time – on cost, time, energy, and efforts.

We have a strong community of clinicians, patients, developers, healthcare vendors, and other stakeholders in the healthcare space to help you vet the innovation vendors’ claims.

So before you go any further in your innovation process, head over to Medigy[] to make the best technology decisions for hitting your organization’s innovation goals.


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  6. Why Innovation in Health Care Is So Hard
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  43. Cause of Death: Fax Not Delivered