Innovation in healthcare: Issues and future trends

Abstract

Despite the fact that there has been significant improvement in the healthcare industry, inefficiency still exists and little accomplished in understanding how to overcome those inefficiencies using innovation in healthcare. This study seeks to answer the following research questions. How do executives and practitioners define the term innovation in healthcare? How do healthcare organizations come up with innovative ideas and how do they make those innovative decisions? How do healthcare executives and practitioners roll out those innovative changes in their organizations? What strategies do these organizations apply toward the formulation of innovative decisions? What role does information technology play in the innovative process? The researchers conducted in-depth interviews to answer several research questions. The respondents included 21C-level healthcare executives from 15 healthcare units. Results of the decision-making processes used by these executives concerning innovation conclude with a practical model. Finally, implications for practitioners and policy makers and future trends complete the paper.

Introduction

Why and how do doctors and administrators in healthcare organizations implement innovation? Is adoption of innovative ideas in healthcare organizations due to attributes of environments, organizations, leaders, members and/or innovations themselves (Meyer and Goes, 1988)? Or, does the adoption of innovative ideas benefit the healthcare organization by minimizing the error rate that is due to complex interactions between different players in healthcare organizations (Sobrio and Keller, 2007, Kimberley and Evanisko, 1981) thus making healthcare organizations less prone to catastrophic consequences, such as high medical costs, infections, injuries and even death — key indicators of a successful healthcare organization?

Besides the above queries, other research questions that boggle the minds of healthcare executives, practitioners and scholars are: what are the essential characteristics and associated requirements underlying innovation in healthcare service provider firms? How do healthcare service providers generate new ideas and put those ideas into practice? What role does information technology (IT) play in innovative strategy in order to make those strategies successful? In-depth interviews conducted with C-level healthcare executives help answer these questions.

In the literature, success, often defined in terms of low incidence of bad results, happens frequently (Kaplan, 2002). Organizations, such as healthcare provider firms, are supposed to be high-reliability organizations (HRO) where managers make decisions in an extremely unpredictable and dynamic environment. In addition, organizations have to rely on complex interactions between patients (e.g., patient advocacy groups), payers (e.g., health insurers), providers (e.g., physicians) and suppliers (e.g., pharmaceuticals). The success of those organizations depends on “the accurate, timely description of process and conditions” (Nemeth and Cook, 2007, pp: 3408).

While understanding the success of HROs is important, it is also important to understand that these organizations face certain challenges. Understanding the challenges faced by healthcare organizations (e.g., multiple medical records of patients, incorrect doses, wrong medication, etc.) and how to overcome those challenges using innovation in health and healthcare are major concerns for healthcare executives and practitioners. Despite the fact that there has been significant improvement in the healthcare industry, inefficiency still exists (Prada, 2008) and scholars that will help practitioners understand how to overcome those inefficiencies using innovative methods in healthcare have done not much. Fragmented views about innovation also exist among healthcare practitioners.

These trends suggest that investigation is a necessary step in applying and advancing theories to answer the following research questions that emerge from this paradox. How do healthcare executives and practitioners define the term innovation in healthcare? How do healthcare organizations come up with innovative ideas, and how do they roll out innovative changes in the organizations? What strategies do these organizations apply toward the formulation of innovative decisions? What role does information technology (IT) play in the innovative process?

Organization of the paper follows: First, we provide a literature review with a brief discussion of concepts based on management, sociology and marketing literature. Next, we present the related literature that answers the above research questions relative to healthcare organizations. A summary of results from semi-structured interviews conducted to understand the decision-making processes used by different types of healthcare executives and providers in providing innovative healthcare services, including those using IT, is provided. Based on the literature review and summary of the results, a practical model that showcases the interactions in healthcare organizations and information exchanges between various components during the decision-making processes develops. Finally, empirical results, along with related implications for practitioners and policy makers and future trends, conclude the paper.