Technology’s Role in Healthcare: Innovation Lessons From Other Industries

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By Joel French, CEO of SCI Solutions

Healthcare is ripe for disruption. It is one of the last major U.S. industries to be transformed by technology advancements and business model innovations. Most other industries and market segments have completed at least one cycle of transformative technology and structural business model change, with market position and attendant capitalization level shifts favoring those willing to aggressively innovate ahead of demand. Examples abound in banking, retail, music, transportation, energy, government, education and entertainment.

Healthcare, however, seems intractably tied to technologies, processes and implementation models that are highly organization-centric rather than community-centric. Said differently, many healthcare IT systems are designed for use only within the walls of hospitals or health systems, and do not help connect to the network community outside of the hospital. To affect change, organizations must rethink existing market-based value chains and demand fundamentally different information technology systems. Vendors must become more innovative and develop better business models.

Fortunately, true electronic community care coordination can be achieved using technologies that have been repeatedly modeled in multiple other industries. In what is perhaps the most common yet enduring example, the disruptive technology-driven transformation that’s emerging in healthcare is analogous to what the retail book industry has experienced with the arrival of Amazon. In recent years, brick-and-mortar giants such as Barnes & Noble have struggled while Amazon’s domination accelerated as customers recognized the advantages of shopping online with a trusted merchant that consistently delivered quality, convenience and price advantages by electronically choreographing a complex supply chain.

Take Uber as another good example. While the company is having its share of challenges, it still changed history with its ability to elegantly connect supply with demand, in a way that delighted customers and distinguished itself from existing services. Nearly overnight, calls to cab companies died and you saw fewer arms raised in the streets to hail rides. The technology platform changed the way people moved around cities and paid for it. More importantly, it shifted power from cab companies to cab drivers by streamlining workflow digitally and creating new efficiency paradigms useful to both cab driver and consumer. Cab companies now must embrace similar platforms to meet new consumer demand, or die.

No industry analogy can be perfectly applied to U.S. healthcare, but health system executives would be wise to consider lessons learned by their industry counterparts. Amazon’s investment in customer relationship management technologies has been essential to the company’s success. The technologies have allowed Amazon to electronically and economically integrate business processes across a worldwide supply chain of merchants while consistently maintaining low pricing, wide selections of quality merchandise and convenience. Amazon studiously records data on customer buying behavior, then recommends additional items based upon a consumer’s demonstrated preferences. Healthcare organizations require similar capabilities if they wish to accumulate and sustain long-term competitive advantages.

Healthcare CIOs, are you seeing an appetite for IT innovation in your organizations? CFOs, are you looking for technologies to help grow your business? Do you think high costs and criticality of services make healthcare ripe for disruption, or allergic to it? Most importantly, how can organizations leverage technology to positively impact the bottom line? We’ll explore these questions and more in next week’s post.

4 Comments

  1. Stop bringing Jell-O salad to the health care potluck | Parley
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    […] Health care is begging for innovative solutions to propel the industry forward. Information technology is frequently cited as a key tool for reducing health care costs and increasing the quality and safety of care, but to date the benefits have fallen short of expectations. Despite significant capital investments in electronic health record (EHR) technology, health care remains an astonishingly fragmented industry – with islands of information spread across independent providers, health systems and payers alike. Hospitals and health systems can’t just install an EHR and call it a day; they need additional tools to bridge their infrastructure to their wider health care community. EHRs were designed to operate within the four walls of their health system, and affectively capture data in this heterogeneous environment. Sharing it is not what these systems were built for – but the sharing of information is exactly what is required to effectively coordinate care. […]

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  2. Population Health Management is a Verb: Part III | Parley
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    […] Entire industries and market sectors have been either vanquished or transformed by technology and bu…. One only needs to think of Kodak, which dominated consumer photography for more than a century, only to see its business erode with the introduction of digital cameras. What should leaders do when they know years in advance that the entire way their organizations have operated to earn revenue for decades will be turned upside down? They have to question doing business as usual and consider if their resources are focused around the best priorities. 2016 will be a pivotal year for health systems as the pace of consolidation continues and reimbursement shifts from fee-for-service to value-based care requires a fundamental reordering of priorities. […]

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