Healthcare Innovation and Entrepreneurship

Sustainable healthy life is basic human necessity. We all want to live healthy, stay health and to be healthy.

Healthcare is one of the aspects that can help us achieve the healthy living we look for as civilized modern citizens. We all imagine a healthcare system that is accessible, affordable, efficient with less human errors, less medication errors, better treatment / diagnostic methods and better ways of personalizing the whole healthcare experience for us as individuals.

That been said, the reality differ from the expectations! The healthcare systems today has many challenges that may seem paralyzing and very hard to overcome, but from an innovators point of view we need to see the elephant in the room, we need to see the opportunity for innovation in healthcare from the lens of these challenges, as always, the bigger the challenge, the bigger the return will be!

The Healthcare Innovation and Entrepreneurship Massive Online Open Course (MOOC) aim to assist individuals and/or small teams in the identification, development, and promotion of products, processes, and procedures that address the healthcare system needs, by providing a framework for innovation and entrepreneurship in healthcare.

The course started by highlighting the current obstacles existing today in the United Stated healthcare system, providing a basic framework to understand and think about healthcare and laying out a foundation for innovation that can be applied within this healthcare system.

This blog post is an attempt to summarize this interesting course and shade the lights on the key concepts provided in it, so let the healthcare journey begins!


What is healthcare?

“… The diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers. It refers to the work done in providing primary care, secondary care and tertiary care, as well as in public health” Wikipedia.

From the definition above we come up with the eight components of healthcare, which are: Assessment, Prevention, Diagnosis, Intervention, Recovery, Rehabilitation, Administration and Integration.

The eight components of healthcare

The eight components of healthcare


The healthcare dilemma in the United States

Before trying to understand how innovation can be applied to the healthcare system, its very important to understand some context about this system, the challenges it has and the delimiting factors its that may limit the innovators when pursuing innovations in this domain. This off course as per the course where done of the united states, but it can be applied to any healthcare system in the world by taking the key elements and localizing it for the intended market.

Some numbers about the healthcare in the United States

For the United States, the spending per capita for the healthcare is the highest in the world, where 17.3% of the US GDP in 2012 is spent on healthcare (up from 7% in 1970).

Despite that, the US rank in the 37th place among world nations based on World Health Organization (WHO) study. Adding to that, the US ranks as number 39th in infant mortality, 43th in female adult mortality, 42th in male adult mortality and 36th worldwide in life expectancy!

Factors limiting innovation in the healthcare in the United States

The introduction of new innovative healthcare product and / or services in the US is defined and delimited by the interplay of certain conditions as Marilyn Lombardi the course instructor said. These conditions are fragmentation, specialization, regulation and reimbursement.

Following are the delimiters as Marilyn Lombardi talked about:

  • Fragmentation: the US healthcare system is a fragmented system because there is no one has an enough ownership to strongly influence the whole industry outcome. This results in high administration costs as many capital costs need to be cared about by each player alone, as found by America Hospital Association.Fragmentation also result in the ignorance of the problems faced by the industry as each segment of sector of the healthcare ecosystem see that the problem in the healthcare system comes from other segments. Therefore, every one should fix there own house first before starting any industry wide efforts. This may give some grounds for innovators to test there innovation on a silo level, but they may face some issues when they try to propagate it later on the whole industry level due to this fragmentation.
  • Specialization: looking at healthcare industry, one of the key elements it preserve as an industry, is the speciality it has in each of its sub-domains. Healthcare is a big ocean of research, but each island in it needs its own skills and its own knowledge.But with that, specialization can be looked as a way to control complexity and the fear it comes with, where dividing complex problems into into small, reduces manageable parts is the only way to find optimum solutions. Therefore, innovators need to find the right sweet spot in this domain that match the capabilities and the knowledge they are grounded in within this domain.
  • Regulation: pressures that comes from the regulator as the healthcare system is highly regulated in the US need to be observed by the innovators. This can be both a positive and negative point, positive in a sense, if innovators find a way to convince regulators with some kind of a solution, it can be pushed as a standardization by the regulator. The negative part is that environments where regulators exit are harder when it comes to innovation and has more procuration.
  • Reimbursement: innovation is all about finding value for the innovators and the intended market. Therefore, innovators need to have a seizable return on innovation within the healthcare system especially when it comes to the US marketplace. This is to assure that the innovator have a sustainable income that can support the businesses and future innovation pursuing efforts.
Healthcare innovation delimiters

Healthcare innovation delimiters in the US

Global trends in healthcare costs

Marilyn Lombardi also highlighted some of the global trends when it comes to healthcare cost based on the WHO report “Primary Health Care, Now More Than Ever” and the “Global healthcare expenditure on diabetes for 2010 and 2030” report, as follows:

  • From the total world population, 5.6 billion people pay out of their own pocket for over half of the healthcare costs, mostly these people are located low- and middle-income countries
  • 100 million is the number of people who fall into poverty each year because they must pay for catastrophic healthcare care costs
  • 490 billion (in US Dollars) in the year 2030 is the expected cost of diabetes care alone, among people aged 20-79

Just looking at the numbers we can foresee the size of the challenge the global healthcare system will face in the near future if no measures are taken to prevent and fix these situations. This is where innovation comes to foreground as means to find the light in the end of the tunnel and promote ways that not only to fix whats broken, but also transform and find new ways for the global healthcare to fulfill its main objectives, which is more healthy humans.


Disease fundamentals and treatment options

After understanding the healthcare system on a high level, its very important to as innovators in the healthcare domain to know more and understand how do physicians see and interpret the patients. As this is the basic fundamental process that happens within any healthcare system.

The physician in many times sees the patient through a cloud at the beginning as the patient presents their current conditions. What happens next is that physician who are trained strongly in anatomy and physiology, look at the patient in terms of the the human systems and how they are working (ex: organs).

Afterwards, physician try to understand what have changed in the patient in terms of the anatomy, in terms of physiology, in terms of how there body’s systems interact with each other. Then physician try to assess the frequency of the conditions and what are the possible outcome on the patient when it mortality or morbidity. Finally, the physician try to assess the possible outcomes of the patient conditions on a broader level on the patient family, the society and even on how the patient can be treated.

Disease Fundamentals

After all this disease fundamentals phase, the physician has identified the disease, identified the
problem, narrowed it in terms of scope or what we want to focus on. The physician is then ready is better prepared to provide interventions, or intervention assistance to the patient to help overcoming his current conditions. This is where treatment analysis comes to place. Treatment analysis can be defined as:

“… involves detailed research to understand what established and emerging therapies exist, how and when they are used, how and why they work, their effectiveness, and their economics …”

The physician try to find the best treatment based on the patient conditions and the available options the physician has. On a high-level, this is how physician do diesis and treatment analysis in the aim of finding a better care for the patient and its important to understand this process when trying to find innovation that are patient centric.


Defining
 innovation

The course instructors have defined innovation as: 

The process where creative ideas are translated to practice.

Looking at the definition we can see is not about just creating or finding something new (which is creativity), but its about find sustainable value out of it.

Innovation also has stakeholder. Stakeholders in innovation is everyone effected by this new introduction in way, as it fulfill a need or a want they are seeking for.

Innovation can be thought of as a controlled chaos. Innovation is driven, first of all, by organizations and or individuals, that are need-oriented. They recognize that the ultimate way to innovate in the healthcare is to recognize the complexity, find the potential / opportunity and see how we can achieve that with capabilities that are available.


The process of innovation

Innovation also has a process that it can be pursued with. This process has four stages as per the definitions of the instructors:

  1. Discovery phase: discovery phase is focused on, first of all, immersing ourselves in the, in the particular area we’re working in the healthcare domain. From this phase, we find the needs for the stakeholders and document it somehow in a needs specification.

  2. Design phase: in the design phase we start finding solution grounded to the insights that we gathered from the discovery phase. In this phase, we try to find solutions taking in mind the current capabilities and context we work in. It’s also very important in this phase to understand the viability of the business ideas we are looking it at a high-level, does it make sense from a financial perspective or not?
  3. Development phase: at this state we bring the subject expert matters to table and we try to develop the offerings on a form that we can test with the stakeholders, its also the phase we try to create detailed business plans for the offering we are creating.
  4. Deployment phase: in this phase we come up with the final offering we try to bring to the market, at this phase we also take in mind introducing our innovation in complainant way with the regulators
The innovation process

The innovation process


Approches to innovation

Based on the instructors point of view, there are two types of innovations when it comes to healthcare that can be pursued:

  1. Blue ocean type of innovations: radical policy-level innovations that reconfigure the whole system by the value it creates where these new ideas challenge the exiting processes, products, or services.These type of innovations comes when the innovator starts thinking beyond the current organizational structures, beyond current billing practices, and beyond current care processes.
  2. Focused, pragmatic innovations: incremental value-added changes in processes, products, or services but don’t not disrupt the industry at the systems level. These type of innovation can happen by finding cheaper, faster or better ways of delivering an aspect of the healthcare industry, compared to what its on today.

Its worth mentioning that the rest of the course materiel focus on the first type of innovation with the blue ocean type, where the aim to have an industry wide, radical and disruptive effect on the healthcare system.


Value innovation in the healthcare system

What does value in the healthcare means? This important question was answered by in the article by Michael Poter in titled What is the value in healthcare as follows:

“Patient health outcomes achieved relative to cost of care ….. in a well-functioning healthcare system, the creation of value for patient will determine rewards for all system actors.”

The key thing about innovating in the healthcare system is to find value and to find the innovation that ticks within the industry, this is where the maximum benefits for all the stakeholders is guaranteed.

When innovation happens without value, it tends to be technology-driven in some sense and may go beyond the patient comfort zone, if we looked at innovation from patient centrality lens.

Value without innovation may encourage the type of changes that are not sufficient to make a company
or organization stand out in the marketplace.


Value innovation in action

To explain how value innovation can happen in the healthcare system, the instructors listed this dilemma currently in the US system and then tried to show how can we find the opportunity in this dilemma:

Patients with a single chronic disease, or multiple chronic conditions, represent in the United States, 20% of all patients. And those 20% of patients, the ones with chronic conditions, incur 80% of all healthcare costs.

The above example shows a typical example of the 20/80 rule where we have these chronic patient populations, each requiring different bundles of services and those services are delivered by different teams of providers. The example also shows a typical case where care is so fragmented and so specialized that the left hand doesn’t know what the right is doing.

So how to tackle this problem from the a blue ocean innovation point of view mentioned earlier?  

First, by having a patient-driven centered value search, where the shift of focus to the actual health outcomes to the patients value, so instead of looking at the value from system point of view, we look directly at the patient, and when we are at the patient, you look to at full cycle of that patient’s care and then try to identify where we can find, create and enrich value. That means we have more of a whole system thinking but with the patient at its center.

Patient centered approach

Patient centered approach

Secondly, and due to the speciality of this dilemma, we also try to have an integrated team approach where local health providers band together (due to the market fragmentation conditions in the US), seeing first of all, it was economically feasible to do. Then seeking to get specialists from across the board, nephrologists, dermatologists, nutritionists, social workers, mental health professionals, all of dedicated to preventing or ameliorating conditions that are associated, comorbidities that are associated with diabetes. The aim of this is to reduce the cumulative cost of healthcare by first finding preventive measures to the healthcare problem and for exiting patient, to find better, cheaper and more efficient healthcare value innovations.

In the two methods taken above for innovation, an inside-out and outside-in perspectives are taken when looking for innovation, which will make us assure we achieve the best outcome for the innovations we are pursuing.


Qualities of healthcare 

Innovation in the healthcare can be also looked at from the view point of the healthcare elements we have mentioned before. In this view we look at which elements we want to address and by which qualities. The qualities are: safety, effectiveness, patient centricity, timed delivery, efficiency and equitably.

Lets say we need to assure having a “safe assessment”, how can we come up to this using the innovation process? This framework help us pinpoint and have a clear focus about what is the general innovation theme we are look at and at which component of the healthcare system.

Target qualities of the healthcare system

Target qualities of the healthcare system


Healthcare Entrepreneurship / Intrapreneurship:

Bob Barnes started to look at the innovators, or the people who take the innovation from an idea to reality.

For any innovative idea there is this basic triangle of human actors, which are:

  • The ideator: who comes up with the idea.
  • The innovator: who takes and idea from its conceptual form to be something that is ready for the market
  • The customer: who is actually benefiting from this idea to satisfy a need or to solve a problem

Its work noting that the human triangle can consist of one or many persons, but for the simplicity and clearance we mentioned it in its basic for above.

The idea human triangle

The idea human triangle

Taking a focus on the innovators or people who take ideas to reality, these people are normally people who have passion, self confidence, commitment, risk taking and last but not least the motivation.

Innovators can be classified into two categories:

  • The entrepreneur: is a person who organizes and manages any enterprise by his / her own
  • The intrapreneur: an employee of large corporation who is has the needed support to create new products, services, systems

Both the entrepreneur and the intrapreneur they have the same traits of the innovator but the main difference, where they are located.

Entrepreneur vs. Intrapreneur

Entrepreneur vs. Intrapreneur

Final thoughts

This content of the course when it comes to innovation may be very familiar to SID Laurea blog members, but based on instructors vision its something that is hardly present in the healthcare market space.

The knowledge of how to start with the customer (aka patient), understand the needs, find the insights and then build from there is somehow is taking in opposite manner in the healthcare field, where its more of a provider centric type of innovations that are present there.

My point of view is that the instructors have done a good job in bring the two world together, the healthcare and innovation in one plate, that can be easily taken by entrepreneurs to the next level.


Conclusion
   

Healthcare is a very important aspect in our life’s and for that innovation is a way to unlock new potentials in it. As innovators we need to understand the healthcare system and its process and how human centric it’s and try to innovate within its ecosystem and stakeholders.

Innovation is always a systemic process that can help us remove the uncertainty and the barriers we have mentally built over time. We need to understand that innovation always starts with the human and ends with the human, its not about the technology, its not about the money its about the value it can bring to the human first and then everything follows.

I hope this summary shaded a light on this important field for innovation, welcoming any feedback and discussion in the comments.

About the Healthcare Innovation & Entrepreneurship course

The Healthcare Innovation & Entrepreneurship course was provided as a Massive Online Open Course (MOOC) on the Coursera platform and provided by Duke University in 6 weeks timeframe.

The course was designed to provide a foundation in the innovation and entrepreneurship process tailored to the healthcare industry. Providing practical tools and techniques you can use to discover and prioritize unmet healthcare needs, conceive solutions, prepare useful need specifications and effectively pursue opportunities within the complex, highly competitive global healthcare marketplace.

This course was instructed by Marilyn Lombardi & Bob Barnes and for more information about the course and its future schedules, kindly visit the course Coursera page.

I have successfully finished this course in June 2013 and the following still image provide a verification of my course completion.

Mussab Healthcare Innovaiton & Entrepreneurship Certifcaton


About the 
author

Mussab Sharif, an innovation manager and practitioner in a leading Middle East telecom operator. Having a major of computer engineering and in the process of finishing my MBA specialized in Service Innovation & Design from Laurea university for applied sciences in Espoo, Finland.

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