Innovation in healthcare: Issues and future trends☆
a b s t r a c t
Despite the fact that there has been significant improvement in the healthcare industry, inefficiency still exists
and little accomplished in understanding how to overcome those inefficiencies using innovation in
healthcare. This study seeks to answer the following research questions. How do executives and practitioners
define the term innovation in healthcare? How do healthcare organizations come up with innovative ideas
and how do they make those innovative decisions? How do healthcare executives and practitioners roll out
those innovative changes in their organizations? What strategies do these organizations apply toward the
formulation of innovative decisions? What role does information technology play in the innovative process?
The researchers conducted in-depth interviews to answer several research questions. The respondents
included 21C-level healthcare executives from 15 healthcare units. Results of the decision-making processes
used by these executives concerning innovation conclude with a practical model. Finally, implications for
practitioners and policy makers and future trends complete the paper.
1. Introduction
Why and how do doctors and administrators in healthcare
organizations implement innovation? Is adoption of innovative
ideas in healthcare organizations due to attributes of environments,
organizations, leaders, members and/or innovations themselves
(Meyer and Goes, 1988)? Or, does the adoption of innovative ideas
benefit the healthcare organization by minimizing the error rate that
is due to complex interactions between different players in healthcare
organizations (Sobrio and Keller, 2007; Kimberley and Evanisko,
1981) thus making healthcare organizations less prone to catastrophic
consequences, such as high medical costs, infections, injuries and
even death — key indicators of a successful healthcare organization?
Besides the above queries, other research questions that boggle the
minds of healthcare executives, practitioners and scholars are: what
are the essential characteristics and associated requirements underlying
innovation in healthcare service provider firms? How do
healthcare service providers generate new ideas and put those ideas
into practice? What role does information technology (IT) play in
innovative strategy in order to make those strategies successful? Indepth
interviews conducted with C-level healthcare executives help
answer these questions.
In the literature, success, often defined in terms of low incidence of
bad results, happens frequently (Kaplan, 2002). Organizations, such as
healthcare provider firms, are supposed to be high-reliability
organizations (HRO) where managers make decisions in an extremely
unpredictable and dynamic environment. In addition, organizations
have to rely on complex interactions between patients (e.g., patient
advocacy groups), payers (e.g., health insurers), providers (e.g.,
physicians) and suppliers (e.g., pharmaceuticals). The success of
those organizations depends on “the accurate, timely description of
process and conditions” (Nemeth and Cook, 2007, pp: 3408).
While understanding the success of HROs is important, it is also
Innovation in healthcare: Issues and future trends☆a b s t r a c tDespite the fact that there has been significant improvement in the healthcare industry, inefficiency still existsand little accomplished in understanding how to overcome those inefficiencies using innovation inhealthcare. This study seeks to answer the following research questions. How do executives and practitionersdefine the term innovation in healthcare? How do healthcare organizations come up with innovative ideasand how do they make those innovative decisions? How do healthcare executives and practitioners roll outthose innovative changes in their organizations? What strategies do these organizations apply toward theformulation of innovative decisions? What role does information technology play in the innovative process?The researchers conducted in-depth interviews to answer several research questions. The respondentsincluded 21C-level healthcare executives from 15 healthcare units. Results of the decision-making processesused by these executives concerning innovation conclude with a practical model. Finally, implications forpractitioners and policy makers and future trends complete the paper.1. IntroductionWhy and how do doctors and administrators in healthcareorganizations implement innovation? Is adoption of innovativeideas in healthcare organizations due to attributes of environments,organizations, leaders, members and/or innovations themselves(Meyer and Goes, 1988)? Or, does the adoption of innovative ideasbenefit the healthcare organization by minimizing the error rate thatis due to complex interactions between different players in healthcareorganizations (Sobrio and Keller, 2007; Kimberley and Evanisko,1981) thus making healthcare organizations less prone to catastrophicconsequences, such as high medical costs, infections, injuries andeven death — key indicators of a successful healthcare organization?Besides the above queries, other research questions that boggle theminds of healthcare executives, practitioners and scholars are: whatare the essential characteristics and associated requirements underlyinginnovation in healthcare service provider firms? How dohealthcare service providers generate new ideas and put those ideasinto practice? What role does information technology (IT) play ininnovative strategy in order to make those strategies successful? Indepthinterviews conducted with C-level healthcare executives helpanswer these questions.In the literature, success, often defined in terms of low incidence ofbad results, happens frequently (Kaplan, 2002). Organizations, such ashealthcare provider firms, are supposed to be high-reliabilityorganizations (HRO) where managers make decisions in an extremelyunpredictable and dynamic environment. In addition, organizationshave to rely on complex interactions between patients (e.g., patientadvocacy groups), payers (e.g., health insurers), providers (e.g.,physicians) and suppliers (e.g., pharmaceuticals). The success ofthose organizations depends on “the accurate, timely description ofprocess and conditions” (Nemeth and Cook, 2007, pp: 3408).While understanding the success of HROs is important, it is also
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