What do we know about innovation in healthcare?

We know that there is a gap between growing care needs and shrinking available resources to meet them – and that innovation has to be part of the solution to bridging this gap.

We know that innovation is especially hard because healthcare is such a complex and often highly politicised system.

We know about the barriers to commercialising new health technology products such as the so-called ‘valley of death’ between the R&D stages and before commercial finance starts to flow.

And we know all about the barriers to technology adoption and diffusion – the challenges associated with organisational, funding and leadership factors, and the part played by the evidence base for healthcare innovations.

But I believe there are four big issues that we need to start thinking about more seriously when discussing innovation in healthcare, especially in developed countries.

The first is the question of technology-induced demand. Technological innovation in healthcare allows us to do more – to treat more people or identify new conditions. This helps to raise the potential demand for healthcare. So not only is healthcare in many countries facing pressure from an ageing population and increasing incidence of chronic disease, at a time of severe resource constraints, it is also facing growing pressure from technological innovation. How do we make choices about how much innovation to adopt and how to pay for it?

Second, we need to become much better at applying what we know works – good evidence-based innovation and best practice which hasn’t spread beyond small pockets in health systems. While technological innovations can deliver great benefits, a far greater improvement may often be achieved simply by ensuring all hospitals perform as well as the best in their class.

Third, over the next couple of decades we will need to coordinate the inevitable decline in demand for hospital beds. The inexorable trend is towards more integrated models of care, supported by new technology and diagnostic equipment outside the hospital. We need to find new ways of planning and financing healthcare infrastructure, taking into account the different lifecycles between technologies, services and large fixed assets.

Fourth, fixing acute hospital healthcare model is actually relatively easy – a 10-20 per cent productivity gain, drawing on existing knowledge about what works best, would address much of the cost pressure. The truly ‘wicked’ question, however, is how to fix the rest of the care system – the organization of better primary and social care for elderly people, its relationship with acute health services, and how to pay for it all.

In developing countries the innovation question is very much about how to create affordable, universal and effective health systems without replicating the outdated twentieth century models of the developed world. This means developing appropriate technologies, avoiding high cost and overly centralised hospital-centric models, and creating and spreading organisational and business model innovations.