Hospitals: Overcoming Barriers to AdoptionJoseph Jankowski, PhD

Director, Henry Ford Innovations

Poised for Digital Transformation

• Healthcare in need of change and digital innovation takes advantage of capital efficiency trend; cost to get software product to market is in constant decline and much lower than a device or drug

• Analytics and AI can reduce/eliminate errors that cost lives and money; >$17 billion spent on measurable medical errors annually in US

• IT can reduce the absurd 25% of healthcare costs that are based on back-office administration

So Why So Slow to Adopt?

Simply, a strong “Yes”

2106 American medical Association survey yielded high interest and enthusiasm for digital health tools

But, there are practical reasons why adoption is slow. In the following slides, we’ll discuss several examples.

Are Doctors Interested?

Workflows

Noise In the System

Procurement Cycle

Costs

IT Issues

Self Interests

Value Proposition

Validation Plan

Payer Inefficiencies

Adoption Barriers

Hurdle 1: Workflows

• Safety and efficacy are requisites, but not sole needs. Practical fit of solution into existing care path is critical.

• Who has to be trained, hired? How do I purchase, dispose, respond?

• “I’ll gladly take $1 dollar today over $2 tomorrow” and “Do no harm” are prevailing mentalities

2106 American medical Association survey yielded high interest and enthusiasm for digital health tools. The top three characteristics physicians find attractive in digital health tools are their capacity to improve work efficiency, increase patient safety, and their diagnostic ability.

Of physicians, 85 percent said they view digital health solutions as being advantageous to improving patient care, so long as they don't reduce face time with patients.

Physicians said quality digital tools must be at least as effective as current methods of patient care, easy to use, have liability coverage and data privacy elements, and they should be paid for time spent using the tools.

Are Doctors Interested? (Remember this slide?)

Hurdle 2: Noise in the System

• Quite simply, there is always a bottleneck.

• Traditionally, it was the time to develop, inclusive of regulatory navigation.

• With emerging digital health, it is the “activation energy” required to consider, test and implement a new solution.

• There are simply too many emerging patient engagement platforms and decision support algorithms to consider

• And many have over-promised.

Hurdle 3: Procurement Cycle

• The sales cycle in hospitals is both, long and disintegrated.

• ‘Health systems are a mosaic of individual hospitals, and hospitals a mosaic of departments.’

• While integrated care is the target, most purchasing is made unit by unit.

Hurdle 4: Costs

• Theoretical cost savings are rarely considered. Rather “accounted” costs dominate.

• Accordingly, preventive value propositions (reduction of errors or downstream costs) are not valued as much as they should be.

• Volume-based care still dominates thinking and economics, while value-based care remains the aspiration

Hurdle 5: IT integration and security

• Once digital solution is viewed as warranting adoption, practical issues of IT administration, redundancy and security are paramount

• Bugs or system failings are death-knells

• Perceived security risks are critical detriments to young firms.

Hurdle 6: Incumbent self-interests

• The existing corporate players do not want disruption

• Lack of interoperability intentional

• High costs to integrate limit adoption (consider Epic’s App Orchard)

Hurdle 7: Practitioner Self-interests

• Automation eliminates jobs in all sectors; not lost of clinicians

• AI for radiology and digital pathology works, but resistance is clear (and logical)

• Automation of triage needed and practical, but it will be fought

• So, “decision support” reigns and this may add costs

• Also, positive self-interest can add features and costs that are not conserved by the decision makers

Hurdle 8: Lack of value proposition

• Digital firms don’t usually “miss the target”, rather, they do not know what the target is.

• "So many companies have overpromised and under-delivered in terms of effective software and solving an underlying problem," he told Healthcare Dive. "You have to know your pain point really well." -- Amino CEO, David Vivero

• What are you selling, why would we buy?

• Ref blood bank example

• Tech-based firms often underestimate or don’t even consider validation protocols

• Lack of understanding risk, cost and current pathways erodes “legitimacy”

• Also, leads to absurd economic expectations: remember healthcare “profit” is about 2-3%

Hurdle 9: Lack of validation plan

Hurdle 10: Payer Inefficiencies

• 3rd party Payer System is inefficient, in that it adds another hurdle that is a “black box”

• A “Chicken and an Egg” paradigm ensues

• Payers may cover once utility is demonstrated; coverage and adoption are needed in order to prove utility.

What Can We Do to Alleviate?

With respect to hospitals

• Partner early

• Align to major current problems

• Focus on system, not product

What Can We Do to Alleviate?

Internally

• Buildout diverse teams

• Utilize retrospective data and in silico modeling to reduce costs and conduct scenario analysis

• Set appropriate expectations internally for time and costs (and garner investment appropriately)

"If you want to disrupt an industry [like healthcare], you have to do it in a non-disruptive way."

– Sami Inkinen

Thank You!