Innovation in Healthcare

Mr. Neil Seeman, Director and Primary Investigator, Health Strategy Innovation Cell at Massey College, University of Toronto.

Innovation in Healthcare – an interview with Mr. Neil Seeman, Director and Primary Investigator, Health Strategy Innovation Cell at Massey College, University of Toronto. The mission of the Health Strategy Innovation Cell is to make sense of online patient conversations around the world to better understand patients’ real needs, wants, and preferences. The Cell works with e-patients, researchers, health delivery organizations and private sector partners around the world. Mr. Seeman says we need new out-of-the-box measurement tools that recognize “successful failures”.

In healthcare, in particular, we talk a lot about our “success stories”. We don’t like talking about our failures. The challenge to admitting to failure has to do with our organizational culture in healthcare. There is a lack of understanding in healthcare that patients are leading what Steve Case calls a “bottom-up Reformation”. We are witnessing a generational shift in healthcare. Younger people recognize that real innovation is a function of radical collaboration using social media. They are not going to accept a top-down approach that reveres experts in the same way that the previous generations did.

Innovation in Healthcare- What does it take to innovate?

Arcus Consulting Group has launched a major initiative to explore growth and change as key elements of corporate and business unit strategy. The majority of executives say it involves achieving technological leadership, a change in organizational culture and a realistic strategy that will enable an organization to define major trends regarding products, systems and services, and to offering its customers important added value. They say such steps reduce costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovations really be part of a strategy plan? Arcus’ multi-industry survey of senior executives found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “climate for innovation”.

As Arcus research indicates, doing so means that you need to be surrounded by highly talented people. It also means finding a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like “a culture of innovation” into their assessments of a company’s long-term value.

An interview with Mr. Neil Seeman, Director and Primary Investigator, Health Strategy Innovation Cell at Massey College, University of Toronto.

Arcus: What are the three drivers of change in healthcare?

Mr. Seeman: First, we need a stronger emphasis on measurement that is tied to a transparent strategy and higher purpose. We need to incorporate a robust set of impact measurement tools. Today, it is a big challenge to measure and monitor the key drivers of success and failure, and of so-called “successful failures” (aka learning events). We need to learn from our measurements while recognizing the limits of measurement. We need to create a set of drivers of change in an easy-to-use repository that would allow organizations to learn and deploy new ideas quickly and efficiently.

Arcus: What is the second driver of change?

Mr. Seeman: Second, we need to learn from our failures — in order to recognize, in principle, that one successful venture out of one thousand attempts will more than compensate for the effort of all the “failures” combined. We need new out-of-the-box measurement tools that recognize these “successful failures”. We need to increase our focus on learning from our mistakes.

“I see two challenges (in healthcare)- a disproportionate emphasis on success and not enough communication about failures.”

Arcus: The second driver indicates an aversion for risk. What is your third driver of change in healthcare?

Mr. Seeman: Effective management of risk can be a significant driver of change. This is what the Health Strategy Innovation Cell celebrates. The way risk management enters into the problem is that in any management setting we often tend to cling on to a project no matter whether it is “sticking” or not. There are incentives in both the private and public sector for managers to hold on to projects with little chance of success. We are called the Innovation Cell after a concept coined by Hella, a German automotive supplier to BMW. Hella awarded employees on the line for coming up with new business models to improve productivity for BMW. The approach was distinctive because these self-organizing teams would disband quickly if their ideas were not translating into success, and managers were rewarded for trying. As a result, managers were not overly resistant to killing ideas.

In Canada, our measurement tools around innovation need to be improved. But instinctively, I feel we are doing better in innovation than most would have you believe in the mainstream media and in popular culture. I see two challenges, then, to innovation — a disproportionate emphasis on success and not enough communication about failures. As a result, outcomes are driven more by learning from our few, isolated successes. We don’t spend enough time in sharing our failures and the reasons for our failures. This is particularly endemic in healthcare. We have all sorts of incentives to talk about our perceived successes and very few incentives to talk about our perceived failures. There are many reasons for this. It is innate in healthcare to work in silos and not partner as much as we should using social media in particular. This has resulted in a lack of sufficient understanding of the new world of collaborative innovation.

Arcus: Does culture change have a role in your observations? What is the third driver of change?

Mr. Seeman: The third area would be lack of meaningful collaboration and an opportunity to drive innovation by changing the way we communicate. That goes beyond the rhetoric of “partnering”. We are witnessing a generational shift with younger people under thirty-five who recognize that real innovation is a function of collaboration using social media. We also call ourselves the Innovation Cell because we are organic: we work together with others and try to break down barriers. Meaningful partnerships are very important.

Partnerships should be about outcomes, not processes. A lot of people in healthcare talk about “partnerships” superficially. In many ways, it is rhetoric and not a reality. The way we traditionally measure partnerships in healthcare is flawed. We tend to measure partnerships in crude ways, such as the number of meetings we have with other organizations or the number of presentations we make to other stakeholders. But we need to take partnerships a little more seriously and actually look at the outcomes of those partnerships and whether or not those outcomes have been fruitful or not.

“There is a lack of understanding in healthcare that patients are leading a bottom-up reformation and they are driving the agenda.”

Arcus: There seem to be three broad themes — lack of measurement, greater emphasis on success rather than failures and, third, lack of meaningful collaboration. Are there any new specific unique insights on healthcare in the context of these observations?

Mr. Seeman: There are a number of industries that are resistant to the imperative for transparency and the absolute necessity for aggressive collaboration and I include healthcare as an industry in that bucket of resistant sectors. There is a lack of understanding among researchers and the broad innovation community, which is very large and goes well beyond the university sector, about emerging practices such as collaborative IP, or how privacy laws need to be interpreted in a shared, transparent model. The technology, privacy and legal implications of commercializing innovation need to be discussed in open forums. There is a lack of accurate information surrounding perception vs. reality of the new world of transparency. For example, there is a perception that when you share your ideas in open space with other “competitors” you necessarily give up all proprietary rights that you have over that intellectual property. This is not necessarily true.

The varied interpretation of privacy laws in this country in each jurisdiction is a huge challenge. There is a lack of clarity in the legal and medical community about how these laws impact competition. There is also a lack of understanding in healthcare that patients are leading a “bottom-up Reformation” and they will increasingly drive the agenda. They are demanding transparency and aggressive collaboration. There is also a lack of understanding that unless we embrace what patients want, we are not going to innovate as quickly and aggressively as we need to in this country.

Arcus: It seems change is being driven by the needs of patients rather than by a top-down movement to drive innovation. What is driving this movement?

Mr. Seeman: There is a new world in healthcare. For example, the increasing emphasis on collaboration is changing the way clinical trials are conducted. Websites like www.patientslikeme.com show in real time how it is possible to change the system. Patientslikeme.com is dedicated to making a difference in the lives of patients diagnosed with life-changing chronic diseases. The site is a community of patients that inspires, informs, and empowers individuals. Patients provide other patients with access to the tools, information, and experiences that they need to take control of their disease.

New ideas around priorities in healthcare are important to drive transparency and collaboration. These changes are driven by patients who are talking about personal illness issues online. So-called “e-patients” have enormous power in this new world. In many pockets of healthcare, there is a lack of understanding that this new patient-driven, bottom-up movement will be a powerful new driver of change over the next decade.

“There is a lot of misinformation about the profile of consumers that are demanding change. The predominant forces of change tend to be early boomers on the verge of retirement.”

Arcus: The concept seems to relate to peer-to-peer and social media collaboration. Does this stem from the broader movement that is taking place on the World Wide Web?

Mr. Seeman: There is a lack of recognition among senior decision makers in healthcare of the “bottom-up Reformation” movement. It is referred to in many ways: as peer to peer collaboration, online patient conversations and bottom up innovation. The nomenclature is less important than the generational and attitudinal change among patients who are not going to accept a top down approach that reveres experts in the same way that the previous generations did. And fortunately, the “digital natives”, people who have been born in the new information revolution, are going to drive the most change humankind has ever seen amid this new knowledge revolution.

Arcus: Could you share an example of how this bottom up movement has impacted on specific decisions around innovation and change?

Mr. Seeman: You have places like www.mystarbucks.com with ideas on how to better introduce more environmentally friendly coffee cups, to Dell computers, where Michael Dell has a site called www.directtodell.com which solicits ideas from the public in real time. Another example is a new initiative from GE (www.tellfritz.com) where the CEO responds in real time to consumer concerns, to www.pleasefixtheiphone.com, which receives tens of thousands of ideas daily, where technicians respond immediately to ideas and suggestions that are feasible. There are initiatives in healthcare where individuals are thinking of transparency along these same lines. However, healthcare has been slow to adopt thus far but I think things are going to change very rapidly.

Arcus: Canada has a unique healthcare system that is run by each province. Have you seen any provinces take a lead in this area or do all provinces have similar processes?

Mr. Seeman: Across Canada, organizations have started to embrace concepts like “crowd-sourcing” on the Web and are rolling out new ideas to their customers and partners. The leaders in Canada are individual Chief Executive Officers who have embraced social media such as blogs. An example is the President & CEO of the Ontario Hospital Association, Mr. Tom Closson. He has launched a blog and interactive portal with an approach that is open source, allowing the public to view any number of performance indicators of how hospitals in Ontario are performing.

Arcus: There seems to be a significant opportunity for innovation and change with a heightened level of transparency, but I guess there is a long way to go?

Mr. Seeman: There is a long way to go but that is going to change very quickly. The reason it’s going to change is because of the bottom-up Reformation movement, where patients and the electorate are going to demand it. A natural organic series of events is taking place that will result in patients demanding increasing change rapidly. For example, a “blogstorm” takes place when you have thousands of patients who are upset over a hospital’s new initiative or a government’s lack of attention to a particular initiative. So these bottom-up blogstorms will increase transparency very quickly. We are talking weeks or months from now, not years.

“We need to have a consistent and complete understanding of reality vs. the rhetoric regarding privacy fears.”

Arcus: Do you feel the nature of engagement of an i-Pod is very different from other products out there? Healthcare is essentially a service. The motivations are obviously different. Do you feel there is a gap across age groups in healthcare and how does that translate into a movement?

Mr. Seeman: There is a lot of misinformation about the profile of consumers who are demanding change. The predominant forces of change tend to be early boomers on the verge of retirement. They are technologically savvy and have high expectations about quality of service. Early boomers are the consumer group that demanded fluffy pillows at Four Seasons. They are likely to demand better quality in healthcare as they enter retirement. The other group that is increasingly engaged are about thirty-five and under. They don’t understand why it isn’t possible to get an email or text message from their clinician that explains to them what the meaning of the lab results are instead of having to visit the clinic. The barriers, in my opinion, do not have to do with technology or regulatory frameworks. They have to do with reimbursing the clinician to communicate online. That is a key driver to overcome resistance to communicating online. Resistance to change has to do with mis-perceptions about privacy and the effective control of data.

Arcus: Is technology the most important driver of change in healthcare today?

Mr. Seeman: I would define technology a bit more narrowly. A big driver of change is low-cost or zero-cost technology. When I say technology, I am not talking about multi-million dollar projects related to electronic health records. I am talking about free online tools, such as Twitter.

The most searched for word on the internet is “free”. Young people are demanding free products and services. Hospitals are spending a lot of money on technologies that are available for free. They should be leveraging social networks where patients are already active, such as Facebook, Twitter and Ning. They should not be spending millions of dollars to compete with already successful communities or platforms because they are likely to fail to build new communities and waste a lot of money along the way.

We need to define technology differently. We instinctively default to thinking of technology as a big-bucket expense. Fortunately, the global slump has forced organizations to think of technology in new ways as a low cost or no-cost solution to building applications from content management systems to file sharing or video conferencing tools and crowd-sourcing to social networking tools that can be harnessed for free or close to free.

“We have to think more seriously about making sure that incentives align with broader systems strategies.”

Arcus: What are the other pillars in healthcare that will drive successful change?

Mr. Seeman: This complements the technology piece. In Canada, we need to have a consistent and complete understanding of reality vs. the rhetoric regarding privacy fears. The real issues relate to sharing data online. For example, concerns arising from electronic health or medical records have little to with “privacy”. The nub of the issue is control of one’s data. That’s what patients care about. Privacy is a spectrum issue. It matters to some more than others. Black and white interpretations of privacy impede innovation.

Arcus: Can some of the innovations in online banking be applied in healthcare?

Mr. Seeman: Everyone banks online. The migration to online banking has had a significant positive impact on our lives. Banking came in much earlier than healthcare did and transformed the technology horizon. The pace of change was influenced by consumer demand for higher levels of interaction. Healthcare can certainly learn from the banking industry.

Today, everyone uses an ATM machine to get their money. We often stand in line and get frustrated if the person in front of us takes more than 20 seconds to get their money. In about 20 seconds, the electronic signal reaches over broadband a very long distance to process the single transaction. We have this extraordinary expectation from banking that we cannot dream of in healthcare. But things are changing, in large part due to the emerging retiring boomer generation and the under-thirty five group.

Arcus: Do you think the concern about patient records has been driven by organizations rather than patients?

Mr. Seeman: Every patient differs and has a legitimate and different threshold of acceptability around how comfortable they are in sharing their electronic records. That’s why the game changing event is not about electronic healthcare records but rather about the personal health record (PHR) that the patient owns and can share with whomever he or she wants. That is a game-changing innovation because through that technology, the patient defines the level of security and data control.

Arcus: There is a lot of discussion around technology that is required to secure patient records. There is a robust existing infrastructure with credit cards. Why hasn’t healthcare tapped into this infrastructure to step-change communication of patient records. Most organizations have secure credit card terminals. Instead of creating a standalone line of communication between healthcare professionals, why hasn’t healthcare explored this option?

Mr. Seeman: It’s a difficult question to answer. There may be industry resistance to change and radical concepts. A big part of the answer has to do with incentives. There are different incentives in play in healthcare. We see differences where physicians are essentially independent entrepreneurs in large part. They generally are not salaried employees of hospitals and they are people in whom we invest our trust in healthcare and yet there is very little accountability for outcomes and performance for these individuals who historically have been driving the agenda in healthcare.

Let’s be clear: physicians are absolutely indispensible. They are arguably the most important people to deliver superior performance and quality in healthcare. However, they have different incentives. They are incented to file their billing codes and deliver quality service by virtue of their training. And yet they are less incented to aggressively push forward the priority for a sharable electronic health record. That is changing because of this bottom up revolution from patients.

Arcus: It seems we are incenting the wrong things…

Mr. Seeman: We have to think more seriously about making sure that incentives align with broader systems strategies. If system strategy says we need electronic health records because it matters to patient safety then we have to ensure that reimbursement tools for physicians who control the agenda in healthcare are aligned with that strategy.

Arcus: We have primarily talked about monetary incentives to drive change vs. a deeper understating of what drives physicians motivations for action. Are incentives always the best practice strategy or should there be a better understanding of alternative approaches to motivate physicians to change behaviour? For example, could added convenience in practice management drive change?

Mr. Seeman: I think they are deeply intertwined. It’s harder to figure out the second piece because often times what people will say their cultural barriers to adoption are may be different from reality. Clinicians, just like lawyers or accountants, understandably don’t want patients to impede their quality of life through 24-hour electronic PDA access. I do think we need a learning process that incorporates best practices from other countries like Spain and Denmark. Part of the process is to get inside the heads of physicians and try to identify the true cultural barriers to change. I think this is often-times challenging but can be done if we meaningfully engage physicians in dialogue.

A parallel is with the green movement. You can incent people to drive cleaner vehicles or you can get them to behaviourally change without incentives by make better choices for the environment and their future. The science of behavioural change is extraordinarily complex. What appeals to one person is different from what appeals to another person. In public health, the biggest drivers of change seem to be a direct correlation with the interests of the physician’s practice. By looking at the electronic health record as an example, the change would be driven by aligning the broader health system’s strategy with the interests of the physician’s practice.

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