Key considerations for advancing true innovation at hospitals and health systems

Healthcare leaders face a dilemma: They must innovate to increase care access, improve outcomes, deliver better patient experiences and stem rising costs; at the same time, they also must contend with capital constraints and limited resources to devote to innovations that will move the needle. 

During Becker's 14th Annual Meeting, hospital and health system executives from across the country discussed the need for innovation, challenges that hinder these efforts and best practices to foster necessary advancements within their organizations. 

In an executive roundtable sponsored by Labcorp, three Labcorp leaders—Deborah Boles, PhD, vice president of research and development; Bryan Vaughn, senior vice president of hospitals and health systems; and Megann Watters, vice president of corporate development, new ventures and strategic alliances—led a discussion on Labcorp's investments in new technology and programs to help health systems reduce costs and optimize care. After the session, Ken Cerney, Labcorp's vice president and head of commercial operations, hospitals and health systems, shared his perspective on trends and models related to innovation. 

Key themes are summarized below.

Healthcare leaders recognize that innovation is essential—but key barriers persist

Hospitals and health systems operate in a challenging, competitive and tightly regulated landscape. Further, these organizations are experiencing rising demand, staff shortages, tight margins, and pressures to deliver outstanding patient experiences and meet compliance expectations. 

Success in this environment requires innovation, agility and embracing new strategic opportunities. 

Mr. Cerney said innovation is a widely used term in healthcare. But what he hears from hospital and health system executives is that innovation must have impact—financially, operationally and in terms of organizational performance. Innovation must result in better patient care and better outcomes. Simply implementing a new technology or a new initiative and claiming it is innovation is not adequate; true innovation must drive meaningful impact.

As important as innovation is to the long-term success of hospitals and health systems, it isn't easy. The roundtable participants discussed several barriers that hinder innovation:

• Capital constraints: Investing in innovation takes capital, which is quite limited for many hospitals and health systems currently.
• Resource constraints: There is no shortage of innovative ideas, but due to limited resources, managing the funnel of these ideas and implementing them is challenging. Few innovative ideas become realities.
• Workflow constraints: If innovations don't fit easily and seamlessly into existing clinical workflows and complement existing technologies, such as the EHR, an innovation likely won't be accepted.
• Reimbursement constraints: "Technology and innovation are moving a lot faster than regulation and reimbursement," Mrs. Watters said. “That is certainly a huge hurdle for commercial adoption and new services to patients.” As much as organizations believe in science, technology and innovation, lack of reimbursement creates a critical barrier to adoption.

Healthcare organizations are looking to new models to fund and drive innovation

To advance efforts, organizations are looking to collaborate across the innovation value chain, from early-stage ideas to mature programs and best practices. New models include empowering internal research and development teams, forming close relationships with retailers and non-traditional players, and creating and/or teaming up with venture capital funds. 

Labcorp embodies this vision by investing in innovation—upstream, downstream and internally:

 

Labcorp's investments are based on the company's unique vantage point. "We have an ability to focus on what we know," Mrs. Watters said. Based on experience, the company's knowledge spans operations, customer needs, as well as real-time feedback on gaps and problems that need to be solved. As both an operator and an investor, Labcorp sees the opportunity to accelerate and scale innovation, as well as de-risk strategic initiatives.

Organizations can use innovation to address critical problems

Roundtable participants discussed areas where innovative solutions can help health systems adapt to changing needs from patients, providers and communities.

Improving access to care

Expanding care access through convenient at-home, near-home or point-of-care solutions is a top priority for healthcare organizations that Labcorp collaborates with. "There is a wide range of ways that we are either collecting samples or offering testing at alternative collection locations," Mrs. Watters said. 

This range of options offers value not only to individuals, but also to accountable care organizations (ACOs), clinically integrated networks and other at-risk/shared-savings providers. For example, if a provider is deploying home nurses to check on patients with certain diseases or special needs, having those nurses administer a test while they are in the patient's home can be convenient for the patient and cost-effective for the organization. 

"It's about how we make use of the ecosystem that is already evolving, but in a way that is all use case-driven," Mr. Vaughn said.

Labcorp's focus on working closely with health systems and innovative companies in adjacent spaces also helps to improve access to testing and care. For example, Labcorp and one of its portfolio companies are collaboratively working to support health systems in community settings with limited infrastructure to conduct clinical trials. The collaboration is enabling clinical research as a care option for underserved patients. 

Another Labcorp portfolio company is working with independent pharmacies to help screen potentially high-risk populations for common and chronic health conditions, in connection with local health systems. Many of those individuals are more likely to seek higher-level, more expensive care if they are not preventively screened.

Improving provider workflows

Labcorp is focused on innovations that are easier, more cost-effective and faster, as well as seamlessly integrate with existing technologies and workflows. This focus aligns with needs that roundtable participants expressed; several described the imperative for new innovations to integrate with EHRs, or providers won't use them. In this vein, Labcorp reduces clinician burden by integrating its platform with organizations' EHR systems and feeding patients' lab results directly into the EHR.

"Engagement with all of the different pieces along the patient journey allows us to innovate in areas beyond laboratory reagents or instruments, all the way through report delivery and the actionable content that we're sharing," Dr. Boles said. 

Mrs. Watters explained that, beyond diagnostic testing, Labcorp offers services that provide vital information that helps the entire healthcare ecosystem—patients, providers, health systems, pharma and more—make important decisions and provide data-driven precision medicine.

Adapting to market shifts

Breakthrough technology can also help health systems manage health needs related to large-scale societal trends (e.g., the aging U.S. population, the shift to remote work). 

In some cases, those trends are exacerbated by other tendencies of geographic areas, such as Florida and Delaware, which attract a large number of retirees and remote workers. As a result, local health systems are buckling under the pressure of health demands of growing populations and are increasingly incapable of attending to those needs in ambulatory settings. 

"We are investing in ways to try and meet those needs via telehealth, but also through technologies that allow us to reach people in their homes," one roundtable participant said, offering examples such as devices that provide remote monitoring capabilities.

Roundtable recommendations and key considerations 

Modern solutions that respond to healthcare organizations' current clinical, operational and financial challenges—as well as broader societal trends—can't come soon enough. 

Labcorp's proactive and openly exploratory approach to finding and delivering solutions—often through pilots and iteration—suggests that forward-thinking organizations can expect positive results that fit within existing operations.

For those organizations still unsure of or weighing their options, some recommendations from the executive roundtable included:

• Aim for a laboratory whose back-end technology is interoperable with the organization's EHR system, to show a whole-patient view without overburdening clinicians.
• Borrow best practices from retail and technology companies.
• Balance short-term success with long-term investments.
• Collaborate with other healthcare providers regardless of status (e.g., nonprofit, for-profit, academic, community or industry) to improve the health and lives of patients and communities.
• Create structures that facilitate continuous innovation, such as gamification or patient advisory councils. This is also a sign of highly innovative entities.
• Identify and implement innovations that fit within the organization's existing workflows.
• Don't just focus on technologies and innovations, but on how these innovations are accessed and delivered.