How CEOs are thinking about innovation challenges, interop and tech giants

The COVID-19 pandemic forced the entire industry to speed up the pace of innovation. With a return to normal, or at least semi-normal, on the horizon, leaders are looking for ways to not only maintain, but build on that progress.

Nearly all CEOs (92.9%) described the pace of innovation over the past year as speeding up, according to Modern Healthcare’s Power Panel, a quarterly survey of top healthcare CEOs. The remaining respondents said the pace of innovation was staying the same, while no respondents said innovation was slowing down in the industry.

During the pandemic, health systems quickly stood up telehealth programs and hospital-at-home efforts that tied together devices and analytics to monitor patients, as well as pushing more information to patients about the virus through chatbots, patient portals and texting campaigns.

Some of those innovations will likely stay in place, with more than half of respondents estimating 11% to 25% of patient visits will remain virtual after the COVID-19 pandemic subsides.

Healthcare needs to “emerge from this pandemic with a mindset that we’re not going to go back,” said Tina Freese Decker, CEO of Grand Rapids, Mich.-based Spectrum Health. “We’ve seen the unlocking of what our teams can do.”

But the pandemic wasn’t the only factor at play. There’s been a convergence of many factors that have contributed to the pace of innovation, according to Dr. Marc Harrison, CEO of Salt Lake City-based Intermountain Healthcare. He pointed to technology giants continuing to make moves into the industry and growing expectations for consumerism from patients as two examples.

“They want seamless access,” Harrison said of patients. “They want to be followed through the course of their illness (and) they want us to be affordable and transparent.”

Following are three trends shaping the innovation landscape, according to Modern Healthcare’s survey.

In April, a first phase of interoperability regulations from HHS’ Office of the National Coordinator for Health Information Technology and CMS went into effect—rules some have suggested will lay the groundwork for new innovations in healthcare, such as apps that help clinicians with work in electronic health records or patients with managing care.

The regulations bar healthcare providers, health information exchanges and some software developers from preventing or blocking data exchange—unless they meet specific exceptions. Beginning in December 2022, a new set of requirements kick in that will force some software developers to make specific application programming interfaces available to customers.

The idea is that standard APIs for health IT software will make it easier to exchange data between such software programs, as well as for third-party tools to hook up to those programs.

For providers, “I think the hope—and the expectation—is that EHRs will be a platform that I’m able to add my own set of apps or my own constellation of apps to,” ONC chief Micky Tripathi told Modern Healthcare in April. That “makes my experience better, so that I, as a provider, am not locked into a particular workflow.”

Dr. Donald Rucker, former ONC chief in the Trump administration, last year when the agency issued the rule said that API provisions in the regulations would lay the groundwork for patients to one day be able to manage and coordinate their healthcare with apps—“the same way they manage their finances, travel and every other component of their lives.”

But half of CEOs in Modern Healthcare’s survey weren’t sure how much of an impact the regulations would have on innovation, commenting that they would “maybe” spur new technologies or ways of delivering care.

The other half agreed the regulations would spur innovation, but respondents were split on how much—35.7% said “slightly” and 14.3% said “significantly.”

“I’ve never seen (regulation) drive innovation,” said Brian Gragnolati, CEO of Morristown, N.J.-based Atlantic Health System. But they do set the foundation for innovation by creating an important expectation that providers and payers will share data, he said. “Sharing information is critically important, and I think this gives good guidance on that.”

CEOs in Modern Healthcare’s survey cited a range of companies when asked who they predict will have the greatest success in healthcare innovation—including technology giants like Amazon, Google and Apple, as well as companies already in the healthcare space like Optum and CVS Health.

Half of respondents at least mentioned Amazon in their response.

A company like Amazon has “a lot of horsepower” to make inroads in healthcare, said Dr. Susan Turney, CEO of Marshfield (Wis.) Clinic Health System. “They have artificial intelligence, they have data, they have the technology—they’re really well-equipped to deliver services directly to consumers, because they have a lot of pieces of the puzzle.”

In some cases, that could involve competing directly with healthcare providers—like Amazon’s network of employee health clinics or Walmart’s plans to purchase telehealth company MeMD. In other cases, companies that traditionally work outside of healthcare could be partners that work with health systems to better care for patients, such as by providing cloud or analytics tools.

Healthcare organizations and technology companies have different strengths, which is why partnering can be a powerful driver of new innovations.

Innovating requires three components, Decker said: A “healthy dissatisfaction with the status quo, a strong sense of purpose, and trust.” Tech companies tend to have the advantage in the first factor, while health systems are fluent in the latter two.

And innovation doesn’t always have to be a massive disruption. Sometimes it’s retooling processes to be more efficient and effective.

There’s a multitude of companies working on launching products that aren’t overhauling the entire healthcare system—such as CVS Health’s MinuteClinic and HealthHUB clinics or telehealth startups that attempt to provide care that’s more convenient and accessible than traditional providers. Those companies may end up seeing the most success, compared with efforts like Haven, which had a more lofty vision of revamping the healthcare system but disbanded after three years, despite the hype.

“We tend to get very intense about disruptors and (think) that everything’s going to hit in a short period of time,” even though that might not be the case, said Yale New Haven (Conn.) Health CEO Marna Borgstrom.

While a significant amount of innovation has taken place over the past year, there are still challenges to overcome.

The No. 1 threat to innovation that CEOs identified in the survey was culture, identified by 71.4%, followed by staffing and recruiting at just 28.6%.

Randy Oostra, CEO of Toledo, Ohio-based ProMedica, described innovation as sometimes feeling like “playing in traffic.” It’s “being comfortable in not having answers,” he said.

Innovation can be particularly challenging since new ideas often don’t pay off immediately—it requires an upfront investment that will hopefully result in improved health outcomes or cost savings.

Over the past seven years, ProMedica has invested about $75 million into innovation efforts, including pumping money into startups and developing its own companies and products that will one day, hopefully, create multimillion-dollar businesses.

A few years ago, ProMedica formed an innovation council to bring together senior and executive leaders to discuss ideas for new companies. So far, it’s spun up companies related to healthcare at home and health plan benefits navigation. At any given time they’re discussing two dozen to three dozen projects, with closer to seven or eight that they’re actively working on.

Investors from venture-capital firms like LRVHealth, which ProMedica has invested in, also provide feedback on the council’s ideas and what they’re seeing in the industry.

Payment and finances were also a point of concern among write-in responses.

It can be difficult for healthcare providers to innovate in ways that keep patients healthy and at home, since much of today’s fee-for-service system for reimbursement pays to “put heads in beds,” Harrison said.

In 2019, Intermountain started using an artificial-intelligence tool to identify patients in early stages of chronic kidney disease, with a goal of intervening earlier to improve clinical outcomes and avoid costly hospital admissions.

“When payment models that reinforce keeping people well … are in place, it engenders all sorts of terrific innovations,” Harrison said.

That’s something Atlantic Health has been working on, too, joining programs like the Medicare Shared Savings Program and entering into population health arrangements with local commercial payers.

In its first year, a risk-sharing and value-based care program between Atlantic and Horizon Blue Cross Blue Shield of New Jersey led to a 9% reduction in unnecessary hospitalizations and a 5% reduction in the cost of care, according to results shared in September 2020, in part through more tightly coordinating care and sharing medical and claims data.

“We know that this fee-for-service system is just not set up properly to align incentives,” Gragnolati said. “We have the opportunity to do that.”