Innovation in Healthcare
Lecture 1:
Why innovation in healthcare organizations?
1. Health is important to people
2. Healthcare expenses keep growing as a consequence of:
- Aging society
- Medical knowledge developments
- Technological developments
- Well-informed, demanding patients
- Health-related behaviours (incl. welfare- & climate-related)
- Tight labour market hc professionals
Affects solidarity among people; affect on the willingness to pay taxes and pool risks through
insurance. Young/old, rich/poor, healthy/unhealthy.
Innovation as one response to HC challenges:
- Improve cost-effectiveness/rationing/value-based healthcare
- Shift healthcare to private sector
- Invest in prevention (long-term)
- Look for managerial innovations
Managerial innovations to achieve the ‘Triple Aim’ of healthcare, in terms of
1. (Improving) health
2. (Higher) quality of care
3. (Equal or contained) costs
decreasing overhead costs by managing HC smarter
Risks involved?
- limits to self-managing
- not burden clinicians
Why focus on managerial innovations?
- New technologies can be exploited for constructing more effective and efficient
ways of organizing
- Exploiting a new hard technology implies changing the soft technology; e.g. roles
of hc organizations, professionals, patients, informal carers, insurers, government
and the way their roles are co-ordinated.
Innovation = translating an idea/invention into value creation in a way that is new to the adopting
entity.
Three ways to classify an innovation:
- By its scope; new for market or organization?
- By its form or application: product, service, process
- By its innovativeness: novel component/re-combination/whole system; more incremental or
more radical?
,Managerial innovation = new approaches to devise strategy and structure of tasks and units, modify
hc’s management processes and administrative systems, motivate and reward hc workers, and
enable hc organizational adaptation and change.
Process/service innovation
Managerial HC innovations fuel fierce debates on strategic trade-offs:
- Deductibles (in Dutch: own risk –threshold)
- Hospital specialization
- Fee-for-service, pay-for-performance, budgeting, or…?
- Screening programmes, e.g. colon / breast / cervix cancer:
=> prevention or medicalization?
Alignment between levels and stakeholders:
Complex implementation requirements for managerial HC innovations:
Lecture 2: Key debates
Debates, tensions, conflict and controversy over healthcare issues and direction of change, including
innovation. Conflicting views on the aims,
organization and processes of healthcare.
Different world views affect views on healthcare
issues: how it should be provided, covered and
adapted.
Debates are related to stakeholders, where does
power reside, who makes decisions, who
contributes and who benefits.
,Three parts:
I Politics of provision: who should provide healthcare: state (1), private (3) or voluntary sector (4)
II Setting priorities, pressures on health budget; requires tough choices: ration, prevention/care,
patient rights.
III Patients and health professionals
UK state provided system
NL more mixed system
Part I: politics of provision:
What is health/illness:
- Subjective: depends on individual, stage of life, history, social circumstances
- Different views on health (age/social class/country). Views shift over time.
- Illness is about how we feel, subjective experience.
- Illness is dysfunctional for individual and society.
- Sick is a role and allows a person to withdraw temporarily from labor and seek help to
improve health.
Definition of health:
- Absence of disease (disease oriented, before world war II)
- State of complete physical, mental and social wellbeing’. (WHO, 1948)
- Ability to adapt and to self-manage. (Proposed definition of BMJ paper of 2011 ‘how should
we define health’)
Definition has implications for the health system
Health has social, cultural, economic, historical context:
Objectively/subjectively:
Man made ‘Blue Zone’ in Groningen town: 1. Active citizenship, 2. Accessible nature, 3. Active
relaxing, 4. Healthy transporting, 5. Healthy building, 6. Healthy food
, Alternative directions for health policy makers and HC organizations depending of view on health
- Advancement of health care provision innovation
- Efficiency of health care system cost reduction
- Prevention e.g. life style, anti smoking campaign lower demand
- Social policies: education, employment, housing, social activities lower demand
State vs. private sector
Conflicting views of how far the state should intervene in healthcare:
- If the state is responsible for directing healthcare, this raises issues about the right of
individuals to organize their own health needs and set up independent practices.
Streams of thinking for state intervention:
- Egalitarian: Enhance equality or compensate for inequalities. Tends to humanize capitalism.
- Civic: Equal access to healthcare is a necessary condition for economic freedom. It serves
democracy and encourages citizens to be more active in their communities. In the
Netherlands is argued that citizens have a collective responsibility to provide healthcare for
all. Does not challenge capitalism or market economy.
- Social: Pools risks and share costs. For individual and social benefit. What is good for the
community is good for the individual.
Against state intervention:
- Health is an individual responsibility. People should assume own responsibility for healthcare
- State healthcare is inferior to private care
- Relieving tax burden and reduce state control government small and unobtrusive
- Competition rather than cooperation
Arguments in support of the private sector:
- Problems with state health care: ‘NHS is a politically controlled state monopoly that is
institutionally unresponsive to the needs of the patient’ (p48).
- Slow to adapt new technology, low attention for patients needs and desires. Cumbersome
and outdated. Waste.
- Economic benefits of private health care. It provides choice for patients.
- Forces healthcare organizations to be innovative and entrepreneurial. Motivates providers
and patients to be more frugal in the resources they consume.
Problems noted with health care on a for-profit basis:
- Affective - Extrinsic rewards lessen intrinsic ones
- Normative - May sit uneasily alongside professional ethics
- Cognitive - Not all services will be provided anymore; only the lucrative, and only to those
who can afford it
- Offers inadequate cover by for-profit insurance providers (In US part of employment
packages): no free choice for consumer after all
- Motivates HC professionals doing unnecessary things and not refer to others when indicated
Arguments against the private sector:
- Undermines solidarity and extends injustice
- Quality of treatment is related to ability to pay
- Profit and self-interest can be socially harmful
Lecture 1:
Why innovation in healthcare organizations?
1. Health is important to people
2. Healthcare expenses keep growing as a consequence of:
- Aging society
- Medical knowledge developments
- Technological developments
- Well-informed, demanding patients
- Health-related behaviours (incl. welfare- & climate-related)
- Tight labour market hc professionals
Affects solidarity among people; affect on the willingness to pay taxes and pool risks through
insurance. Young/old, rich/poor, healthy/unhealthy.
Innovation as one response to HC challenges:
- Improve cost-effectiveness/rationing/value-based healthcare
- Shift healthcare to private sector
- Invest in prevention (long-term)
- Look for managerial innovations
Managerial innovations to achieve the ‘Triple Aim’ of healthcare, in terms of
1. (Improving) health
2. (Higher) quality of care
3. (Equal or contained) costs
decreasing overhead costs by managing HC smarter
Risks involved?
- limits to self-managing
- not burden clinicians
Why focus on managerial innovations?
- New technologies can be exploited for constructing more effective and efficient
ways of organizing
- Exploiting a new hard technology implies changing the soft technology; e.g. roles
of hc organizations, professionals, patients, informal carers, insurers, government
and the way their roles are co-ordinated.
Innovation = translating an idea/invention into value creation in a way that is new to the adopting
entity.
Three ways to classify an innovation:
- By its scope; new for market or organization?
- By its form or application: product, service, process
- By its innovativeness: novel component/re-combination/whole system; more incremental or
more radical?
,Managerial innovation = new approaches to devise strategy and structure of tasks and units, modify
hc’s management processes and administrative systems, motivate and reward hc workers, and
enable hc organizational adaptation and change.
Process/service innovation
Managerial HC innovations fuel fierce debates on strategic trade-offs:
- Deductibles (in Dutch: own risk –threshold)
- Hospital specialization
- Fee-for-service, pay-for-performance, budgeting, or…?
- Screening programmes, e.g. colon / breast / cervix cancer:
=> prevention or medicalization?
Alignment between levels and stakeholders:
Complex implementation requirements for managerial HC innovations:
Lecture 2: Key debates
Debates, tensions, conflict and controversy over healthcare issues and direction of change, including
innovation. Conflicting views on the aims,
organization and processes of healthcare.
Different world views affect views on healthcare
issues: how it should be provided, covered and
adapted.
Debates are related to stakeholders, where does
power reside, who makes decisions, who
contributes and who benefits.
,Three parts:
I Politics of provision: who should provide healthcare: state (1), private (3) or voluntary sector (4)
II Setting priorities, pressures on health budget; requires tough choices: ration, prevention/care,
patient rights.
III Patients and health professionals
UK state provided system
NL more mixed system
Part I: politics of provision:
What is health/illness:
- Subjective: depends on individual, stage of life, history, social circumstances
- Different views on health (age/social class/country). Views shift over time.
- Illness is about how we feel, subjective experience.
- Illness is dysfunctional for individual and society.
- Sick is a role and allows a person to withdraw temporarily from labor and seek help to
improve health.
Definition of health:
- Absence of disease (disease oriented, before world war II)
- State of complete physical, mental and social wellbeing’. (WHO, 1948)
- Ability to adapt and to self-manage. (Proposed definition of BMJ paper of 2011 ‘how should
we define health’)
Definition has implications for the health system
Health has social, cultural, economic, historical context:
Objectively/subjectively:
Man made ‘Blue Zone’ in Groningen town: 1. Active citizenship, 2. Accessible nature, 3. Active
relaxing, 4. Healthy transporting, 5. Healthy building, 6. Healthy food
, Alternative directions for health policy makers and HC organizations depending of view on health
- Advancement of health care provision innovation
- Efficiency of health care system cost reduction
- Prevention e.g. life style, anti smoking campaign lower demand
- Social policies: education, employment, housing, social activities lower demand
State vs. private sector
Conflicting views of how far the state should intervene in healthcare:
- If the state is responsible for directing healthcare, this raises issues about the right of
individuals to organize their own health needs and set up independent practices.
Streams of thinking for state intervention:
- Egalitarian: Enhance equality or compensate for inequalities. Tends to humanize capitalism.
- Civic: Equal access to healthcare is a necessary condition for economic freedom. It serves
democracy and encourages citizens to be more active in their communities. In the
Netherlands is argued that citizens have a collective responsibility to provide healthcare for
all. Does not challenge capitalism or market economy.
- Social: Pools risks and share costs. For individual and social benefit. What is good for the
community is good for the individual.
Against state intervention:
- Health is an individual responsibility. People should assume own responsibility for healthcare
- State healthcare is inferior to private care
- Relieving tax burden and reduce state control government small and unobtrusive
- Competition rather than cooperation
Arguments in support of the private sector:
- Problems with state health care: ‘NHS is a politically controlled state monopoly that is
institutionally unresponsive to the needs of the patient’ (p48).
- Slow to adapt new technology, low attention for patients needs and desires. Cumbersome
and outdated. Waste.
- Economic benefits of private health care. It provides choice for patients.
- Forces healthcare organizations to be innovative and entrepreneurial. Motivates providers
and patients to be more frugal in the resources they consume.
Problems noted with health care on a for-profit basis:
- Affective - Extrinsic rewards lessen intrinsic ones
- Normative - May sit uneasily alongside professional ethics
- Cognitive - Not all services will be provided anymore; only the lucrative, and only to those
who can afford it
- Offers inadequate cover by for-profit insurance providers (In US part of employment
packages): no free choice for consumer after all
- Motivates HC professionals doing unnecessary things and not refer to others when indicated
Arguments against the private sector:
- Undermines solidarity and extends injustice
- Quality of treatment is related to ability to pay
- Profit and self-interest can be socially harmful
