eHealth Innovation: Puny IT budgets stifle innovation

CAMBRIDGE, Mass.—“There’s a bandwidth limitation,” said Ray Campbell, Esq, MPA, executive director and CEO of the Massachusetts Health Data Consortium, speaking March 14 at the inaugural eHealth Innovation Conference and referring to the limits facing healthcare technology innovation.

He named the change to fee-for-service healthcare as the most important change to hit healthcare. Half of healthcare is funded by the private sector and half by the public sector, he said, so the industry “functions neither as a market or as a government program.” That makes it difficult for the stakeholders to know how to react to innovation.

Another challenge, Campbell said, is that the median size of organizations in healthcare is just three. This means that healthcare “is by and large delivered by micro-organizations.”

Campbell discussed one last figure that significantly impacts healthcare and technology innovation: 2 percent is the typical IT budget of healthcare organizations. That figure is far below the standard in other industries, he said.

These figures are the fundamental reasons why innovation hasn’t yet occurred in healthcare, he said.

Naomi Fried, PhD, senior vice president and CIO of Children’s Hospital Boston, discussed her facility’s efforts to foster innovation, such as partnering with small groups to enhance grass roots innovation. The hospital has a fund designed to help innovators move forward with such tasks as building a prototype, finding resources and gathering enough data to determine whether the product will be a success. Dedicated software developers also help struggling innovators.

“We’re trying to build up the innovation community so they can learn from each other,” she said. “We don’t want them to feel isolated. We make an effort to recognize their work because innovation can be a lonely and frustrating process.”

Innovation “is going to be a team sport,” Campbell said, noting the $25 billion healthcare industry forces the question of how to effect change on a much larger scale.

The transformation of healthcare is “politically uncomfortable and unpopular because it means changing how you do things,” he said. However, organizations that approach transformation as an opportunity to be strategic and proactive are the ones that make the most progress.

Fried said start-up companies need to offer solutions that enhance safety and efficiency but don’t disrupt clinicians’ workflow. She also recommended that innovators find a champion within a large organization. “You’ll get a lot farther a lot more quickly if you partner early on in the process.” The ability to pilot a product or solution within a facility will help in gathering the data necessary to prove value. She suggested partnering on both macro and micro levels. “It’s absolutely critical to partner with those who will use your materials and your ideas.”