Health care stakeholders are seeking disruptive innovation to transform the U.S. health care sector in the years ahead. In NEJM Catalyst’s most recent New Marketplace survey, our Insights Council members — comprising executives, clinical leaders, and clinicians — make it abundantly clear they believe innovation will come from beyond traditional health care organizations. Only outsiders can overcome the limitations of the current landscape, from better technology to creative payment models. For instance, in the area of primary care, 65% of survey respondents say the most promising new entrants are likely to emerge from focused start-ups.
Let’s first consider where respondents feel disruptive innovation in health care is most needed. Hospitals and health systems top the list, with nearly two-thirds of respondents putting this among their top three sectors in need of innovation. These results are particularly notable because Insights Council members are themselves based at organizations directly involved in health care delivery. Executives, clinical leaders, and clinicians are roughly equal in assessing the need for innovation at hospitals and health systems.
Health care IT (for vendor technologies such as EHRs and clinical decision support) and primary care register second and third among sectors most in need of innovation, at 47% and 36% respectively. Specialty care lands much farther down the list, with only 18% of respondents placing it among their top three sectors.
A dichotomy emerges when respondents consider whether buyers are willing to pay for solutions. Most notably, health care IT shoots to the top of the list, named by half of respondents. Hospitals and health systems are second (46%).
Only 23% of respondents think that buyers are willing to pay for primary care innovation. Pharmaceuticals, which is fourth among sectors most in need of disruptive innovation in health care, ranks third when willingness to pay is added to the calculation. The juxtaposition between primary care and pharmaceuticals is noteworthy, potentially demonstrating the markets’ tolerance of increasing drug pricing, but less accepting of the costs necessary to innovate in primary care.
Whether talking about disruptive innovation in hospitals, health care IT, or primary care, respondents say focused start-ups will lead the way. Respondents believe this most strongly for primary care. Some leading examples of primary care start-ups include Iora Health and Oak Street Health. Both companies have developed greenfield sites to deliver care that is centered on patient needs and supported by innovative payment models.
Surprisingly, 63% of respondents say change in health care IT will come from focused start-ups, not the many established companies in this sector. And 54% of respondents say that disruptive innovation for hospitals and health systems will come from start-ups.
Insights Council members responding to the survey also volunteer some areas where innovation would be welcome — requesting interventions to reduce paperwork, enable clinicians to pay more attention to patients, and promote healthy behaviors among patients. One respondent notes that a focused health care start-up could help with “the huge amount of lost time in physician EMR documentation that adds no real value to the patient experience or the physician experience.” Another comments that a focused start-up could develop more innovative uses of out-of-hospital, home-based Internet monitoring of chronic conditions with easy access and rather quick feedback.
Who has the most influence in driving adoption of these new products, services, and approaches to patient care? Provider executives/clinical leaders and payers are tied at 92% in the survey. Interestingly, just over half of executives rate the influence of clinicians as extremely or very influential, compared to one-third of clinicians who give themselves this rating. This disparity is consistent with widespread reports of physician burnout and sentiments of disenfranchisement.
Patients, who arguably will be most impacted by these changes, are ranked last in influence (63%). Yet respondents say it is more important for innovation in provider organizations to improve patient outcomes/patient experience (99%) than it is to lower cost growth (96%).
METHODOLOGY AND RESPONDENTS
In December 2016, an online survey was sent to the NEJM Catalyst Insights Council, which includes U.S. health care executives, clinical leaders, and clinicians at organizations directly involved in health care delivery. A total of 519 completed surveys are included in the analysis. The margin of error for a base of 519 is +/- 4.3% at the 95% confidence interval.
The majority of respondents were clinicians (45%), with executives (27%) and clinical leaders (28%) nearly evenly split. Most respondents described their organizations as hospitals (40%) or health systems (16%). These hospitals were predominantly midsized (38% had 200–499 beds) or larger (49% had 500 or more beds).
Only 9% of respondents indicated that their major affiliation was with a physician organization. Those physician organizations tended to be big — 49% had 100 or more physicians.
About three-quarters of the organizations (74%) were nonprofit, with the remainder of respondents coming from for-profit organizations. Every region of the country was well represented.