Few industries in America are as storied, sprawling, and structurally complex as healthcare provision. Riddled with systemic challenges—such as soaring costs, staffing shortages, and labyrinthine regulations—the sector is ripe for innovation, if only those doing the innovating can navigate the many organizational and cultural barriers in their path.
Recent efforts at Advocate Health, a large integrated health system spanning multiple states, shed light on how healthcare providers can begin to build a robust innovation ecosystem.
A Broader Approach to Health System Innovation
At its simplest, “innovation” can conjure images of hackathons, smartphone apps, and advanced medical devices. Yet in health systems, the work often runs deeper. “In a rapidly evolving environment with expanding pressures, teams who can think creatively, critically, and expansively are core to how we chart the road ahead,” says Alicia Bowers, Senior Vice President of Innovation & New Ventures.
As an example of its commitment to innovation, the system declared that “Innovative Partnerships Ecosystem” would be a core differentiator for its future strategy. An Innovation and New Ventures team, built up over time in part through mergers, has expanded its initial foundation of human-centered design and business model innovation to encompass innovation partnerships, placemaking through innovation districts, collaboration with health startups and accelerators, strategic investment funds, and learning programs to equip leaders with tools to design or redesign their business models.
The system also leveraged tech transfer expertise gained through integration with Wake Forest Baptist and the Wake Forest School of Medicine, to support inventors and researchers more broadly as they take discoveries to market.
Other systems are embracing similar approaches. Sutter Health, a large system on the West Coast, has also pursued innovation expansively. For instance, a new innovation center boasts a simulation lab, innovation events, physician training and partnership development.
This broadening scope is not unusual. As consolidation continues among healthcare providers, systems that once confined innovation to pilot projects in a single academic medical center or service line are now scaling their ambitions to the entire enterprise. In doing so, they must reconcile creativity—testing new business models, launching digital-first care solutions—with the decidedly conservative nature of a sector that literally deals in life and death.
Lessons from Innovators
What, then, can aspiring health system innovators learn?
First, there is a need to invest in leadership development that embeds innovation mindsets across the enterprise. Advocate Health’s approach has been to partner with other departments to create learning opportunities for leaders. For example, the team has equipped some emerging leaders with tools such as the business model canvas, human-centered design, and Jobs to be Done, then asked them to apply those methods to pressing internal challenges.
“We know that innovation happens everyday across the Enterprise,” said Elizabeth Watson, Director of Enterprise Innovation at Advocate Health. “Our learning experiences and resources focus on helping teammates solve problems and see opportunities in new ways.”
Conventional wisdom suggests that healthcare is brimming with corporate antibodies, eager to destroy new ideas. In reality, while individual attitudes matter, the real obstacle is more often embedded in processes, committees, and layers of approvals that harden over time. One must figure out how to navigate these labyrinths—or alter them incrementally.
Second, successful innovation units identify the “struggling moments” within current operations. Whether the issue is an underperforming vendor contract or a growing backlog in the emergency department, these pain points can serve as catalysts for change. Rather than imposing flashy new technologies that solve only superficial problems, the teams at Advocate Health look for places where patients, clinicians, or administrators are truly struggling with pivotal issues. A new, more efficient business model or digital product is then designed to address the root cause.
Third, bridging the gap between fresh ideas and real-world impact often requires forging tight alliances with operational leaders. In some cases, as with Advocate Health’s move to develop an in-house kidney-care program, convincing them that a different approach to patient engagement or care coordination could yield superior outcomes was critical. Helping these stakeholders see themselves as co-designers—rather than reluctant participants—paves the way for smoother adoption of novel practices.
Finally, big systems benefit from cross-pollination with external partners. Advocate Health’s broadening focus on partners and ecosystems aims to keep the organization plugged into emerging solutions that might otherwise take years to reach mainstream medicine. In a heavily regulated environment, well-crafted pilot programs and collaborations with industry disruptors can drive controlled explorations that, if successful, scale up across the network and positively impact health care.
Creating Momentum
Health systems in the United States are entering a new phase of financial stress, labor shortages, and intensifying competition from integrated payer-providers and digital-first startups. For a time, many systems tried to weather these forces by doubling down on core operations.
But the next frontier may be for innovation methods to become as embedded in healthcare organizations as the X-ray or electronic health record. One day, the notion of having a central innovation office—just like the bygone “Chief Electricity Officers” of the early 1900s—may seem quaint, because these capabilities will be woven into every line of service.
Until that day, concerted efforts like these toward health system innovation may play a key role in re-shaping organizations where change is both resisted and required.