Necessity is mother of invention. Innovation, or advancement in practices has helped us achieved what could not have been imagined a century ago. Some technologies or inventions are led by competition, others are driven by need of an hour. In recent times there has been a lot of focus on reduction in the cost and improvement on quality of services provided, gauged and opinioned by renderer of the services (Patient) in US healthcare. That led to the invention of Value based Care or also known as Pay for Performance (P4P) model with Medicare setting target to implement this model completely by 2030.

But technology comes with cost (Research, Training and coaching, IT infrastructure installation, Digital technologies, EHR, Patient management tools to record patient outcome). “Quality of services”, as it being the subjective matter, or in given circumstances, if defined in “terms of quality” or judged against any “benchmark” but most importantly Health care innovation Centre’s efficacy will be judged against the outcome of patient, their's satisfaction level and the cost imparted on achieving it. This means, there is associated risk with it as how it is going to be beneficial for service providers and would the investment required by health systems into Innovation Centre convince them to go fully with it, or implement partially. This further means Risk for financial loss for health systems investing in innovating centers and providers can be greater in this financial Model since it is based on patient outcome rather than Services provided but that does not mean that we should not expect any favourable outcomes from Innovation centers.

Why Innovation Centers And Innovation?

The need for continuous improvement, making processes more efficient, reliable, dependable, efficacious, cost effective, Revenue diversification, is requirement for every industry in this global world due to competition it find itself in. But sometime it needs of an hour such as in days of Covid which yielded in Digital patient Portal which helped virtual appointment booking and expanded on Telemedicine which has itself very much potential to grow in future.

Innovation centers, about 110 came into being in last 11 years due to investment by Health systems. The bet on them by Health system is that they will make the business models which will help achieve quality care for patient, will make it more affordable (Cheaper than existence Models) and will diversify their revenue stream. The methodology of innovation center, unlike normal business models, is to employ different set of skills. For example, to challenge the present health models, the innovation centers will go with user-centered, Quick development with Novel IT based tools to improve on health care services with modifying internal cost structure or Revenue streams. It is believed that breakthrough in technology will help innovation centers come up with Business models which are affordable with higher level of patient satisfaction.

Innovation Centers And Their Goals : Quality Of Service

Innovation is not the goal itself, rather a stepstone in achieving the goal. The objective of innovation center is to cut cost while improve on the quality of service. Although all innovation centers share the same goal but can adopt different strategies to achieve them. Some can focus on back end improvements, Cost reduction or Revenue generation, while other might focus on increase in Clinical performance with IT. These different strategies require different course of action. For examples, Virginia Mason Institute focus on clinical quality within the organization by chasing Toyota production system – Totally business model outside healthcare. Their innovation center is located within the organization Quality improvement department. While NewYork-Presbyterian Innovation Center, also focus on their internal operations, but they are more IT focused and their innovation center is located in their IT department. Although both innovation centers share same goal but approach to achieving them is different. One is more focused on improving internal quality practices, while other has dedicated it’s intention on improvement via IT in bringing the quality care and cost reduction.

Modern approaches to innovation are more user focused, putting more emphasis on the staff, whether to hire new one or train and coach the existing staff, taking feedback, asking them to vote for different strategies. This means, there is more focus on building internal capacity, employing some of the business models, like iterative testing and lean startup to improve on exiting models.

Level Of Risk And Reward

New Technology means cost increase, especially the initial cost or set up cost to start with as in the case of Value based care objective model – which more or less all innovation center are there to achieve with even higher yielding results. Health centers, focused on innovation center, to give higher yield will depend upon how greater the risk they are willing to take. Higher risk means Higher reward in terms of improved core activities, Cost saving infrastructure, improved quality of services in terms of patient satisfaction, different Revenue generation mechanism. But the one intending to keep towards the low level of risk may want to improve on core activities and become unreceptive to other infrastructural change may lead to low end yield in terms of cost saving, high quality patient care, patient satisfaction and outcome.

This also means, where more investment is made and higher risk is taken, for research, staff training, old/new staff, etc. this does not guarantee will yield the intended high quality results on all the parameters or KPI since some of them are subjective to patient understanding and level of satisfaction.

Innovation Center Yields And Provider Financial Benefits

Value based care model is a prime example as innovation center yield. Although, it is not widely popular yet with many insurance companies, but it will likely to replace more traditional models, such as FFS, Capitation etc. Another prime example of innovation center is the development of time reduction from 6 hours to 30 mins from the onset of Sepsis with refinement of internal clinical protocol. Reduction in time means less provider input which means cost of procedure reduced, one of the main objective for innovation centers. This also means less amount of billing for the service provider, but since Value based care models are not capitation or DFFS (Discounted Fee For service) based, and if the patient outcome is satisfactory or exceed the expectation, the provider is likely to incentivize for services provided. Also, the 5 hours and 30 mins saved, provider can see other patients and can have the financial benefits.

Conclusion

As with every business, innovation is to key to stay competitive. Healthcare is no different. Since the focus has been shifted towards high quality services with affordability among other KPIs, although Quality comes with cost, the innovation centers is step in right direction. There might be initial risk of high level of investments to bring about the change and will that change see the day of the light due to compliance or other regulatory reason is other question. However, main question is whether it will be as beneficial as it is intended and would the investment worth it, it is yet to be seen but results so far are bright and encouraging. Not all innovation Centre will come up with technological breakthrough, but to improve on quality of services and affordability Innovation Centre are the right approach unless any other model/scientific approach comes about.