Innovation Centers in 2016

How to produce new and improved models of care

Continuing now into 2016, health systems and hospitals across the U.S. are in a state of reform. Among these changes, the healthcare industry is shifting away from a fee-for-service delivery system and moving towards a value-based payment model. Essentially, healthcare providers will be paid upon the outcomes of care they deliver, rather than the number of visits or tests they order for each individual patient.

While still in its early stages, the pressure to migrate from a fee-for-service to a value-based payment model is at an all-time high. Simply put, we are not moving in that direction fast enough. The need for urgency was heightened when the Centers for Medicare and Medicaid Services recently added new components to the Affordable Care Act, effectively forcing hospital organizations to move toward value-based care by 2018. Aside from a restructured payment model, streamlined IT capabilities, electronic health records, tight profit margins, value improvement, quality of care delivery and physician and staff burnout have become top of mind for health systems and hospitals.

Even the most established health organizations can struggle with change and reform. In response to the especially dynamic nature of the industry, innovation centers have been established to tackle transitions head on. There is no one “correct” or “right” approach to creating an innovation center, but the crucial purpose is to produce new and improved models of care for both patients and healthcare staff in preparation of the future. As one might suspect, there are many ways to inject innovation.

Until recently, traditional healthcare organizations and their leadership executives asked physicians and hospital employees to think about how they can improve their processes and what the providers and employees themselves can do differently. When a specialized innovation team is established (typically led by a physician), the responsibilities are separated and, in turn, create a broader and long-term strategy from which everyone can reap the benefits, as opposed to each individual department making minor changes in the hopes of improvement.

Although creating an innovation center has many benefits, there are obstacles a hospital must face in order to reap the full effects. In my experience, when the option comes up to create an innovation center, the question of return on investment (ROI) almost always comes into play. Establishing an “innovation” initiative in any organization–whether it is healthcare, manufacturing or commercial–is a process that requires strategy, a systematic approach and, most importantly, time.

The results are not immediate. It usually takes 12-24 months to see a significant ROI, which tends to make smaller organizations apprehensive. In some cases, innovation is one of the first proactive initiatives cut during tough financial times. For this reason, one of the biggest failures associated with innovation centers is that they are not funded properly. The CEO and leadership team need to be in full support of an innovation center in order for the enterprise to take full effect. This requires a steady stream of funds to make improvements and create long-lasting reform for the organization and its employees.

Innovation teams have had the most success when coupled by a systematic process and led by a physician; simply because they are the most involved in the process improvements. Physicians are wary of burnout and overburdening their employees. They also know where pain points exist within their care delivery model. Since they are still practicing, they are able to experiment in their practice to verify whether or not the proposed changes will have the desired effect. At this point, it is the innovation team’s responsibility to work the physicians and IT leaders to implement new technologies, such as virtual visits or mobile apps that may also improve the care across the continuum. Too often, organizations inject new technologies before understanding the overall impact on the continuum of care.

Looking ahead, the focus of innovation in 2016 will be to support population health initiatives, thus providing value to patients in an impactful and affordable way. Also, there must be a focus on reducing burnout for physicians and staff as a primary outcome. Effective development of innovation centers, and thus, a culture of innovation, will only continue to grow as the year continues. It represents the progression of the healthcare industry with a focus on tangible care delivery improvement.

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