Capitalizing on Creativity: Insight Into Better Innovation Centers

Brainpower is one of health care’s most valuable and abundant resources, but harnessing that power is a constant struggle. Attempts can become bogged down in the quagmire of competing priorities, unclear direction, uncertain leadership and outdated technology transfer.

Recently, the country’s leading institutions have seen a massive renaissance in innovation investment—and the rewards are starting to justify the risk. However, hospitals do not exist in an industry that functions like Silicon Valley—simply infusing more capital is not a solution. Instead, organizations capitalize on creativity by building more efficient systems and developing a personalized approach to innovation. Sg2 recently conducted a series of interviews with the organizations leading this renaissance and have identified the core competencies that most frequently translate into innovation success. Read on to reveal how the best innovation centers have evolved and how you can establish or expand your own.

Step 1: Discover Your Innovation Style
The most successful programs are led by leadership champions, especially clinical and c-suite stakeholders. As a steering committee they can determine program direction by utilizing tools such as the Sg2 innovation spectrum. The 3-zone spectrum consists of:

  • Foundation: Creates new solutions to problems within a hospital’s 4 walls
  • Extension: Pushes ideas into the community, stimulating engagement and alignment as hospital ties tighten
  • Disruption: Results in truly novel products and companies that target global markets and generate revenue independent of traditional streams

Step 2: Declare an Innovation Mission and Vision
Lasting investment in innovation aligns well with a system-wide vision and mission. A pediatric hospital might create an innovation strategy that ultimately involves improving the health of all children; a community hospital might plan to impact the overall wellness of locals. Whatever the vision, combining the spectrum with the Sg2 System of CARE™ helps envision tangible program results and provides targets by which you can define success.

Step 3: Select Your Innovation Playmakers
Invest in dedicated, passionate people to run the innovation program. The majority should be full-time employees, including individuals with research, business and analytical skill sets. Gold standard programs feature at least a part-time medical director, 1 to 2 project managers and data-savvy decision support staff to carefully monitor outcomes and metrics of success. A health system on the West Coast sought playmakers outside of the organization, integrating the experience and industry knowledge of external consultants into its highly disruptive, independent company.

Step 4: Create an Innovation Culture
It is not too late to catalyze a culture of creativity if your institution doesn’t have one yet. The ability to submit new ideas should be open to all providers and staff. An ambitious physician might research a new therapy with global implications, and a floor nurse might improve an operational issue—both can have important returns for your institution down the line. Integrate innovation center staff into the day-to-day operations of the hospital and encourage frequent meetings between clinical innovators and technical executors. A nationally recognized academic medical center in the Midwest holds an annual pitch competition open to all employees and hospital affiliates, and a community hospital in the Midwest holds innovation courses open to community leaders and entrepreneurs. Both have cultivated a culture in which submitting ideas is common at every organizational level. Innovative institutions like these benchmark their idea creation capacity and understand that it may take years to stabilize.

Step 5: Prioritize Your Projects
Focus on ideas that align with the innovation center’s core mission and vision. Assess market viability through research, risk/reward analysis, concept maturity and coverage by existing competencies. Quickly identify which ideas meet your predetermined criteria and advance them, objectively navigating a field of competing priorities and a limited budget. A technology center in an East Coast academic medical center filters ideas as early in the process as possible, requiring that new technology solve a current business need and benefit every patient in its target category.

Step 6: Plumb the Pipeline
Priority projects should be pitched before a governing board, typically an evolution of the original steering committee, which draws on industry experience to find diamonds in the rough and invest. After successfully shepherding an idea to the investment stage, the team should establish clear pilot timelines and investment tiers contingent upon attaining goals. Some immature ideas can be incubated instead of discarded, returning for another round of evaluation. A pediatric institution in New England relies on a volunteer advisory board made up of leaders from a variety of industries; the group selects and subsequently mentors the best and brightest ideas from the pipeline.

Step 7: Launch the Most Promising
The final stage for fledgling products and solutions is leaving the nest. Well-established targets and timelines are critical to ensuring that pilots find success in the market and that these wins clearly communicate return on investment to steering committees and governing boards. An existing technology transfer office can be a help or hindrance here, and institutions must assess their own exit routes.

While providing a useful skeleton, this guide is not comprehensive. Innovation is as much an art as it is a science, and developing culture and competencies like those outlined above is a challenge for every hospital. It will take perseverance and a large, sustained capital investment to advance innovation at your institution. It will take continuous adjustment and course correction to achieve success. But as competition for patient loyalty steepens, innovative institutions will find themselves ahead in delivery, doctors and dollars, all of which are critical to traversing the new roads in health care.

Need assistance determining the scope and goals of your innovation center? Want to ensure you spend your money wisely? Or do you simply want to better understand if developing an innovation program is a timely option for your organization? Contact your Sg2 account team to learn more.

Sg2 Analyst Alexander Matelski contributed to this post.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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