This fall we’ve been sitting down with healthcare experts from across the industry to talk to them about the future of innovation. Today I want to share with you our initial findings from those conversations, as well as a couple of insights about the state of healthcare innovation. This blog is the second in our ongoing Future of Innovation series—you can check out our first innovation blog post, register for our free Future of Innovation webinar, and stay up to date with upcoming research by visiting our website.
We are having wide-ranging conversations with leaders from health systems, plans, life sciences companies, financial services organizations, technology vendors, and more. But we kick off every interview with the same two questions:
What innovations do you think will be most impactful in the next two to five years?
What innovations do you think are overhyped?
These were the top responses:
Perhaps unsurprisingly, the most frequent response to the question of impact was artificial intelligence. Tellingly, it was also the most common response regarding innovations that are currently getting more attention than they perhaps deserve. The sentiments are of course not mutually exclusive, with many experts citing AI as their top choice for both questions. This ambivalence underscores the notion that AI will likely play a key role in healthcare innovation, but that there are caveats and limits to its near-term power.
While not an ‘innovation’ in the technical sense, many experts shared a belief that care in the home—and the technologies and delivery methods that facilitate it—is going to reshape healthcare in the coming years. The few detractors cited an uncertain path to profitability as their main source of skepticism.
Precision medicine in general, and genomics specifically, are the clinical innovations that garnered the most interest among our innovation experts—a theme that extends to the broader industry. But questions remain about whether the effects of these medical advancements will be felt outside a few cutting-edge health systems and wealthy patients.
Automation frequently came up in conversations about workforce optimization, as a means of streamlining back-office functions and reducing the burden of highly repetitive tasks. Distinct from artificial intelligence and machine learning in that automated programs do not adapt and instead produce a predictable output every time, automation is sometimes seen as a precursor for future AI process augmentation.
Digital health is a broad category—one that has only gotten broader in the wake of the virtual care boom following Covid. Several of our interview subjects were optimistic about the potential for this well-financed segment of the industry, specifically the expansion of condition-specific virtual care and digital therapeutics. However, as with AI, an equal number of experts expressed skepticism that the digital health, and virtual care startups in particular, could live up to their promised potential.
Outside of funding, data access is perhaps the largest barrier to innovation today; thus, data sharing advancements—like federated learning programs and universal interoperability standards—are not only pioneering in and of themselves, but capable of supercharging other innovations.
Virtual and augmented reality
Virtual and augmented reality devices have to overcome several barriers to achieve widespread adoption, including conventional challenges associated with hardware development plus a perception among investors that they are too ‘futuristic’ to be practical. However, if innovators can match the right use case with effective technology, VR/AR could become powerful tools to drive patient behavior change.
The innovation landscape
We’ll be exploring some of these innovations more deeply in a series of reports across the next quarter. In the meantime, let’s take a step back to discuss the nature of healthcare innovation today and better understand what’s driving these investments.
Insight #1: In response to growing existential pressures, proactive innovation leaders have shifted their focus from sourcing and developing novel ideas to selecting and scaling high-impact innovations.
The focus of healthcare innovation is always evolving. In the aughts, all eyes were turned to clinical innovation, exemplified by the mapping of the human genome and advancements in stem cell therapies. Then, like so many industries in the 2010s, healthcare became enamored with technological transformation, instigated in part by the 2009 passage of the HITECH Act mandating the use of electronic health records.
We’ve reached another inflection point, where the tide has once again shifted. Interest in clinical and technological innovation of course remains strong. But underlying that interest is a sense that healthcare is changing on a fundamental level, and that leaders need to be prepared to change along with it. A feeling reflected in conversations we’re having about innovation. Intensifying margin pressure, crises of affordability, demographic shifts, and stakeholder scrutiny—among other forces—have brought us to a point where there could be tectonic shifts in how healthcare functions. Soon we may see significant changes to who is working in healthcare, how money flows through the system, and what care delivery looks like.
This notion of foundational tipping points likely influenced a theme we observed as we spoke to our experts. In contrast to several years ago, the primary concern for innovation leaders across healthcare stakeholders is not to identify emerging ideas for their organization to adopt. There is a plethora of validated tools available—if anything the wish list for most Chief Strategy and Chief Innovation Officers is too long. The challenge now is making the case and creating the right conditions for those innovations, and any future ones, to be adopted and integrated successfully.
A refrain we heard often is that healthcare is extremely slow to adopt new innovations for a variety of reasons including regulation, resource constraints, bureaucratic decision-making processes, and reputational concerns. But leaders with an eye toward the future, who are seeing the cracks start to form, feel increasing pressure to accelerate their organization’s responsiveness to technical, clinical, and operational advancements.
Insight #2: The innovations most likely to achieve wide-spread adoption in the near future are those that address existing industry priorities.
To avoid the ‘shiny objects’ mentality that so often laces innovation research, we didn’t want to merely list the innovation categories that are getting the most attention. Rather we’d like to home in on the actual problems healthcare organizations are facing now and connect those to viable solutions. This is an inclination we heard echoed by many of our interview participants, who are often the ones trying to make the case to an overwhelmed C-suite about why innovation should remain a priority. Several experts, when asked which innovations they thought would be most impactful, first outlined the top concerns for their organizations before connecting them to specific innovation opportunities.
Thus, the innovations receiving the most interest from people in positions to operationalize them are those that tackle specific industry challenges head-on. Below we’ve outlined the top strategic priorities for healthcare organizations in 2023 and 2024 and the four main domains of innovation—technological, clinical, care delivery, and payment. Onto that we plotted many of the top responses to the question of the most promising innovations for the next five years.
This snapshot of tools is by no means exhaustive, but as you consider the vast ecosystem of healthcare innovation, try to keep these industry priorities in mind.
Where do we go from here?
The innovations we’ve plotted above are still quite general. Across the next few months, we’ll be sharing research that explores many of these in greater detail, outlining which subsets are most likely to find success and the conditions necessary for wide-spread adoption. We will also be publishing what we’ve learned about what leaders are doing to make innovation part of their organizational DNA. To keep up with our research you can visit our website and register for our free Future of Innovation webinar on November 16th. For questions about our resources or membership, you can always reach out to firstname.lastname@example.org.