Innovation road map
Innovation Roadmap at University of Michigan.
Although United States leads the world in health care spending, it lags behind its peers in many quality measures. To ensure a sustainable future for health care, it needs to be proactive, predictive, hyper-personalized, digical (seamless interplay of digital and physical), decentralized, continuous, integrated, people-powered and value based.
The transition for reimbursement from volume to value is inevitable, and disciplined innovation can drive it forward. Organizations that succeed in adopting to this landscape need to draw from diverse perspectives, including patients, families, caregivers and payers and continually innovate to deliver high value care.
Few healthcare organizations perform this in an orderly and reliable way. Innovations in healthcare typically occur in silos lead by faculty and staff champions armed with specific expertise who are uniquely positioned to innovate within their environment. These projects rely on luck and incredible efforts by innovation champions to succeed. Therefore, many innovative projects remain captive in the minds of the employees and ideas that are developed are not the consistent with the highest strategic priorities of their organizations. For innovation to succeed, there is a need for new organizational structures combined with substantial investment to ensure innovation occurs consistently and at scale.
The University of Michigan Frankel Cardiovascular Center (CVC) Value Innovation Program is an example of such successful initiative that leverages informational technology to engage the community within the cardiovascular center and develop innovation projects that maximize value within our institution. The program is supported by a generous foundation grant which allows for hiring a dedicated staff. The dedicated staff will develop a core modular educational curriculum that can be tailored based on the needs of the innovation project (innovation academy). The dedicated team will also help execute and implement the selected projects over the year following the innovation challenge.
What is Value in Health Care?
Value in healthcare should be centered around the needs of patients. Value is defined by healthcare outcomes achieved per dollars spent (value=outcomes/costs). Therefore, value in healthcare is defined by results (health outcomes) and not inputs (volume, process of care used). Health outcomes for each patient are condition-specific and no single outcome captures the results of care. When measuring outcomes, we will utilize measures that assess health status achieved or retained, patient/provider experience, process of recovery, and sustainability of health. Cost refers to the total costs of the full cycle of care for the patient’s medical condition, not the cost of individual services. We will utilize time-driven activity based costing to assess the cost of each innovation project.
What is innovation?
There is significant emphasis on ideas in healthcare and that is often mistaken for innovation. Innovation represents the implementation of new or significantly improved products, services or processes. The ultimate measure of success for innovation is the development of new products with a sustainable and profitable business model. A business model is sustainable if the products deliver value to customers (the product is desirable by customers) and are profitable (some value is captured by the institution).
We use a rigorous definition of innovation that emphasizes the ultimate goal of innovation which is creation of value for patients.
We will define healthcare innovation as the implementation of new or altered products, services, processes, systems, policies, organizational structures, or business models for the purpose of creating value for customers and financial returns for the institution.
Innovation= invention (ideas) X commercialization (create value in the world)