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Innovation in healthcare: Where it’s coming from and where it’s going

In the past decade, emerging technology has brought about drastic changes in just about every area of the economy. Innovation in the healthcare industry, however, stands out as particularly disruptive and complex.
Innovation in Healthcare: Where It's Coming From and Where It's Going


  • Innovation and change in healthcare are long overdue. Costs throughout the healthcare spectrum continue to rise.  Without serious, cost-effective change, the situation could become worse. 
  • The importance and potential impact of big data and predictive analytics in healthcare are impossible to overstate.  Big data in healthcare is already capable of saving lives. 
  • Future innovations in healthcare will depend on today’s stakeholders. They should be willing to navigate industrywide challenges—taking incremental steps in the right direction. 

In the past decade, emerging technology has brought about drastic changes in just about every area of the economy. Innovation in the healthcare industry, however, stands out as particularly disruptive and complex.

There are several complicating factors in healthcare — whether it’s a diverse supply chain, shifting payment structures, or heightened patient experience and involvement — and these can cause new technologies to have unforeseen secondary and tertiary effects. New innovations in healthcare information technology (cloud implementation for electronic health records, for instance), could create new challenges in data management the industry has never had to grapple with.

Innovations in healthcare technology also bring about additional opportunities to accelerate and evolve. Having more data, for instance, means you can develop tools that demand even more of that data. Perhaps that’s why healthcare is projected to outpace any other industry in data spending over the next five years.

After all, there’s plenty of opportunity (and money to match it) for those looking to gain an edge in the healthcare space. Look no further than the tech behemoths rushing to be the first to use new solutions — artificial intelligence and machine learning among them — to solve some of the industry’s most vexing problems. But for the stakeholders on the front lines of this disruption, innovation in the healthcare industry takes on a new dimension. It represents both an urgent problem to solve and a fresh chance to deliver better value, care, and outcomes.

This innovation and change in healthcare is in many ways overdue. Costs throughout the entire healthcare spectrum continue to rise, and without serious, cost-effective change, the situation could become significantly worse. The Centers for Medicare and Medicaid Services projects that if patterns continue, healthcare spending in the United States will rise by 5.5% each year through 2027 — reaching almost $6 trillion in that time frame. For reference, that number is larger than the 2019 gross domestic product of every country in the world except China and the U.S.

There’s a reason why healthcare tops the list of Americans’ most pressing concerns: The people and organizations that can figure out what innovation in healthcare is and how it can change people’s lives for the better will create positive change. They’ll impact people of all ages, incomes, and political leanings.

Despite the factors that make it difficult, innovation in healthcare is worth pursuing because of this unprecedented opportunity for change.

Why is innovation in healthcare so difficult?

It’s no secret that providers, payers, manufacturers, and nearly every other healthcare stakeholder has their fair share of inefficiencies. Innovation in the healthcare industry can potentially cut back on those problems, but it can also do something even more important: drive better patient outcomes.

It’s easy for these outcomes to get lost in the litany of data and documentation accompanying day-to-day patient care. And with more of that data on hand than ever before, it seems that the easy solution would be to throw more information at it. Despite this, one of the biggest barriers to innovation in healthcare is this deluge of information itself.

When patients are confused about their healthcare, the problem isn’t usually a lack of information — but rather too much of it. There’s often so much to take in that patients have a hard time being active participants in their care. Communication breakdowns can make the treatment process longer and more expensive (as well as create additional costly downstream impacts), and this could eventually lead to a deterioration in patient outcomes.

For example, even though some incredible innovations in cancer detection and treatment have recently gone into practice, one study found that the time to initial treatment (essentially, the time between diagnosis and treatment) has lengthened significantly. Sadly, this raises the risk of mortality by 1.2% to 3.2% per week.

This is why achieving truly disruptive innovation in healthcare can be so challenging. Even if you apply advanced technologies, fresh insights, and new research to solve a complex problem, there’s another closely related issue right around the corner. If you can solve for something on the treatment side, for instance, there might be an obstacle on the reimbursement side you didn’t account for.

These barriers to innovation in healthcare are more present than ever, but the incentive behind developing better solutions is only becoming more and more urgent. Hospitals with fewer resources to invest in emerging technologies and solutions find it more difficult to keep their doors open as the market begins to demand more resources.

Confusion and inefficiencies clearly stall the innovations needed to improve patient care. To solve this problem, the industry has started to shift its view toward encouraging better outcomes, mostly in the form of value-based care. Under this model, providers are reimbursed based on the “value” reflected in patient outcomes rather than based on the services provided. Although the first implementations of value-based care haven’t yet solved the problem of too much complexity, they have given innovators something to focus on – delivering value.

Value, of course, comes in many shapes and forms. For some, it’s an intricately designed precision medicine treatment course for their disease. For others, that value might simply be the ability to get to doctor’s appointments on time. Disruptive innovation in healthcare can help solve both needs, but it’s up to industry stakeholders to navigate the system and develop the necessary solutions.

How will we demonstrate innovation’s benefits in healthcare?

One of the more challenging aspects surrounding the healthcare industry is its structure. Essentially, it’s made up of many smaller industries that are connected to one another, and each one focuses on different priorities. There’s the medical manufacturing industry, whose priority is to develop solutions that are effective and popular enough to lead their respective markets. There’s also the hospital industry, whose goal is to treat complex or threatening conditions quickly and effectively. Then, there’s the insurance industry, whose aim is to help patients access healthcare, manage costs, and experience better outcomes.

Blanket statements don’t address the distinct motivators of this diverse group of stakeholders. An innovative payment model for healthcare might help insurers and patients, but it could also make work more difficult for providers and manufacturers. For innovation that truly makes a difference, there must be input and collaboration between these different groups.

There’s also something to be said for the fact that each stakeholder has some accountability to the patient. Deloitte found that today’s patients are open to new channels and forms of care. Taking their lead could be a great way for players across the healthcare spectrum to coordinate efforts. If each sector could work toward the common goal of meeting patient demand, each could develop a healthcare innovation model that functions most effectively. Regardless of whether players are on the life sciences or payer end of the spectrum, they should work to increase patient engagement to innovate effectively.

There are, however, other forces to be aware of. Many companies across the industry now face choices about scale and stability — they’re weighing the pros and cons of the widespread consolidation in healthcare over the past few years.

On the one hand, this consolidation often reduces patient choice in a given market, making it harder to determine whether a healthcare provider truly meets a patient’s needs. This also makes innovation more difficult for the reasons explained above. On the other hand, joining forces with others in the market often means having more resources and data on hand, which providers have identified as a pressing barrier to delivering innovative, value-based care.

Any innovation model in healthcare must weigh organizational considerations as well as practical ones, and those decisions will likely become more difficult to evaluate. As more industry players consolidate, those who don’t will face increasing pressure to follow suit — and they could be left out of the innovation game entirely if they remain independent. As the industry adopts more advanced technology, those who can’t move quickly will fail.

Predictive analytics in healthcare: how practice differs from theory

It’s difficult to define a specific, patient-centric goal — especially one that’s needed to innovate and get enough industry cooperation to implement something meaningful. With this, it shouldn’t come as a surprise that some of the most promising innovations in healthcare are coming in fits and starts.

Predictive analytics makes a good case study of this dynamic. The importance and potential impact of big data and predictive analytics in healthcare are impossible to overstate: According to Allied Market Research, the market for this technology is set to be worth $8,464 million by 2025. Between predictive analytics for healthcare management and clinical usage, this technology has the potential to be a unifying, innovative force that can truly drive significant change.

Still, the practical adoption of predictive analytics has been slower than you might think. Although 84% of providers believe analytics will be extremely important in three years, just 36% view it as extremely important now. This signals a rocky adoption and implementation process ahead. Other innovative technologies in healthcare could face similar roadblocks; despite obvious benefits and practical applications, widespread adoption might be slower and more incremental than expected.

Like predictive analytics, healthcare wearables and telehealth represent groundbreaking opportunities to revolutionize different facets of the healthcare industry. In fact, the market for wearables alone was expected to grow by 15.3% over the course of 2019. For wearables to truly make a transformative impact, however, providers will also need to develop and adopt treatment systems and protocols that account for the data they create. 

On the other hand, insurers must navigate how to reimburse treatments informed by this data, and manufacturers will have to iterate and improve various products to get a market edge. This might mean that providers and insurers have to reevaluate the work they’ve already completed. After all, innovation doesn’t happen in a vacuum — especially in healthcare.

Still, there are compelling reasons to be encouraged. Big data in healthcare is already capable of saving lives, such as in instances where it helps predict septic shock before a patient’s condition worsens. AI is also improving the patient experience by providing more accessible and intuitive mobile applications and assisted surgery. And predictive analytics in healthcare prove that pushing the envelope can be worth it, even when it’s difficult.

Sustaining healthcare innovation for a promising future

Still, there are ways to lower barriers to innovation in healthcare that are worth exploring.

The medical manufacturing industry has worked actively with the U.S. Food and Drug Administration to try to develop new, more efficient ways of getting innovative medical products to market quickly. Incorporating tools such as real-world evidence and other innovative ideas in healthcare could make future improvements easier to implement. Healthcare companies are even borrowing some tips and tricks from new collaborators in the tech industry to shorten innovation cycles.

Ultimately, determining how to innovate in healthcare is more like crossing a river than running a marathon: Progress comes from figuring out where the most stable place to take your next step is. True widespread disruption won’t happen overnight, but that doesn’t mean it’ll never happen. Precision medicine, for instance, represents an incredibly valuable opportunity to thousands of patients and providers down the line. Right now, however, the innovation process has been expensive to take on — and the resulting price tag has kept adoption at bay.

However, this won’t be the case forever. Future innovations in healthcare will depend on the stakeholders of today. They should be willing to roll up their sleeves and navigate pressing industry-wide challenges, and this requires taking small, incremental steps in the right direction. The end result will be worth it for all parties. 




Life at Pariveda









Marc Helberg Headshot
By Marc Helberg
Managing Vice President
Marc serves as the Managing Vice President for Pariveda’s Philadelphia office. He is an energetic people developer and problem solver, focused on ensuring that the right size solution is brought to organizations enabling strategic progress.

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