The challenge of disruptive innovation in healthcare

by Heather Pierce, FleishmanHillard

Published on
September 26, 2016

This guest post from our global affiliate FleishmanHillard discusses the challenges facing innovation within the US healthcare system. While the players are different, many factors affecting innovation in Australia are the same, including data security concerns, an ever-changing stakeholder engagement ecosystem and complex policy regulations. The risk to reputation when innovation fails is no higher than in the healthcare industry, given the stakes at play. Effective communication will be even more crucial to manage the transition when disruption does occur.

Healthcare has been called the last frontier—the last industry to be truly transformed by technology. With its notorious patchwork complexity, onerous rules and regulations, and political pitfalls, healthcare has developed a reputation for being unfriendly, even hostile, toward attempts at innovation—even when changes are clearly needed to deliver better patient experiences, improved outcomes and lower costs.

Furthermore, the healthcare industry as a whole is incredibly risk averse—and for good reason. People’s lives are at stake. The balance of knowledge, influence and power is often uneven, so protections, protocols and oversight are appropriate and necessary—even if they slow innovation’s progress. Healthcare policymakers and regulators walk a fine line between protecting the public’s health and fostering innovation.

This is true, in varying degrees, across the spectrum of clinical, behavioral, pharmaceutical, device and communications applications of technology and digital health. While hospitals and other care providers have long been relatively eager to adopt breakthrough technology in medical devices, procedures and treatments, far less attention has focused on innovations in networking and communications. This is partly because of concerns about breaches in security and patient privacy, and because healthcare until recently has traditionally been performed locally and in person.

And examples of industry disruptors with grand visions and promising starts falling victim to various pitfalls and scrutiny are starting to mount (e.g., 23andme, Theranos, and most recently Zenefits). On the flip side, traditional healthcare players well understand the system, but face the challenge of being able to see old problems with new eyes—and then actually being able to effect change once a new solution has been identified.

So, what is the risk-reward equation for attempting true innovation? And is change more likely to come from disruptors with outside perspectives, or from inside healthcare players that may share the desire to approach challenges in new and innovative ways, but that also understand the nuances of the system? It’s likely to be a combination of both. Entrepreneurial spirit and a thirst for innovation must be balanced with a deep understanding of the healthcare environment—how it works and why things are the way they are.

In the United States, two of the biggest factors affecting digital health innovation are intended protections afforded by the Health Insurance Portability and Accountability Act (HIPAA), which addresses the privacy and security of patient data, and the U.S. Food and Drug Administration approval process.

HIPAA, which was first signed into law in 1996, was updated in the HIPAA Omnibus Rule required by the HITECH Act of 2010. The update strengthened privacy, security and enforcement provisions, but many people designing mobile health applications say it did not simplify policy and technical language. The FDA approval process also has proven difficult, especially as lines are blurred between medical devices, software and consumer applications. Although the agency released additional guidance around mobile health in 2013, the topic is far from settled.

To be sure, the institutional, cultural and knowledge barriers that confront innovators in the healthcare field are unique. But there are a lot of smart people thinking about these issues. The Healthcare Leadership Council (HLC), a consortium of traditional healthcare players, including representatives from the provider, insurer, manufacturing and technology sectors, recently published a report detailing six recommendations to improve the U.S. healthcare system, including solutions for addressing patient engagement, data interoperability and antiquated regulations.

Ultimately, the winners of this moment will change the way healthcare is delivered and perceived in this country and perhaps globally. I’d argue that success in an environment so full of uncertainty demands a clear story, an ability to adapt to unforeseen changes with conviction and a commitment to transparency with consumers. In short, communicators will be at the center of this transformation.

About the author

Heather Pierce is a health communications specialist, bringing over 18 years of experience to FleishmanHillard’s healthcare sector. She supports clients in strategic communications planning and implementation; issues and crisis management; stakeholder outreach and engagement; and writing and editing for print and digital channels. Prior to joining the agency, Pierce served as director of strategic communications for Palladian Partners, and held positions at MSLGROUP, the National Breast Cancer Coalition, Optum, and the Association of State and Territorial Health Officials.

This article was originally published on FleishmanHillard TRUE.