Creating Value from Health Innovation

This blog post was written by Christina Manng, an intern with ACCESS Health United States. Christina supports research on innovative elder care, age friendly cities, and the integration of healthcare systems across disciplines.

The United States ranks eighth in innovation globally.[ref]These are the World’s Most Innovative Economies (2016). Bloomberg.[/ref] The annual Bloomberg Innovation Index methodically defines innovation as six tangible activities contributing to the creation of goods and services that increase the standard of living.[ref]Bloomberg Innovation Index- Interactive Chart (2015). Bloomberg.[/ref] While the US lags behind in several areas, we soar above all other countries and rank first in high tech density. The increasing number of high tech companies signals the growing opportunity to create economic and social value from innovation. More specifically, the healthcare industry has a great deal to gain from innovation and technology.

The goal of healthcare innovation is to increase access to higher quality and more affordable healthcare. Access to new health technology is already increasing at an exponential rate. Telehealth services are expected to rise from 350,000 to seven million between 2013 and 2018. Patients, providers, and insurers are engaging in telehealth when they use medical devices and communication technology together to monitor diseases and symptoms.[ref]Global Telehealth Market Set to Expand Tenfold by 2018 (2014). IHS.[/ref] An example of telehealth is as simple as monitoring the average number of steps you take per day and sending that information to your physician, or as complex as the Full Circle America model studied by Jean Galiana of ACCESS Health US. Full Circle America allows relatives and providers to monitor the health of their elderly loved ones from a distance. Telemedicine is the remote delivery of healthcare services and is also on the rise. Telemedicine services are expected to lower healthcare costs by decreasing the number of office visits and the use of urgent care centers and emergency rooms. This shift is projected to save healthcare companies six billion dollars a year.[ref]Current Telemedicine Technology Could Mean Big Savings. Towers Watson.[/ref] The use of health information technology is already promising to raise the quality of services by increasing patient engagement and communication with providers.[ref]Putting Doctors and Patients on the Same Page (2016). The Commonwealth Fund.[/ref] We have only begun to scratch the surface of the promises of health innovation.

History, Opportunity, and Challenges of Health Information Technology

Building a Digital Infrastructure

meaningful-useThe transition to electronic health record systems was one of the first initiatives to incorporate health innovation and information technology. A report by Modern Healthcare described the growth and development of healthcare information technology as coming in waves. The federal government has led the way in legislative and financial incentives. In 2009, Congress passed the Health Information Technology for Economic and Clinical Health Act. The policy incentivized healthcare providers with more than thirty billion dollars to build a digital infrastructure and adopt meaningful use electronic health records. Meaningful use is a set of objectives outlined by the Centers for Medicare and Medicaid Services. These objectives are intended to guide providers to a specific set of health goals. More information on the specific guidelines and end goals of meaningful use can be found in the accompanying infographic. As of 2015, approximately ninety five percent of eligible and critical access hospitals have adopted meaningful use of certified health information technology. Unfortunately, only fifty four percent of the office based physicians surveyed have done the same.[ref]State of the Healthcare IT Market: 2016. Modern Healthcare Custom Media.[/ref] Transitioning from paper based to electronic health records is expensive. It is important that smaller provider offices are afforded extra resources to make the transition. Primary care physicians are more often in an office based setting. Their full engagement in coordinating care for patients with long term care needs is critical to the overall success of health innovation.

Coordination and Interoperability

New technologies are critical to encouraging better care coordination. Greater coordination across the continuum – among all of the healthcare professionals providing care for an individual – is one of the first steps toward a higher quality healthcare delivery system. Studies have shown that care fragmentation is extremely costly, and at times, dangerous. These studies assert that poor coordination across providers without a single entity centrally coordinating care may lead to poor patient outcomes that raise costs and lower quality.[ref]Care Fragmentation, Quality, and Costs Among Chronically Ill Patients (2015). The American Journal of Managed Care.[/ref] I highly recommend Jean Galiana’s blog on interoperability that addresses the need and highlights some of the challenges of breaking down information silos.

Tying Health Information Technology to New Payment Systems

In April 2015, Congress passed the largest healthcare reform measure since the Affordable Care Act of 2010, the Medicare Access and CHIP Reauthorization Act of 2015, nicknamed the Permanent Doc Fix. This reform signaled a shift toward a focus on delivering high quality, evidence based care. The Permanent Doc Fix replaced the Sustainable Growth Rate formula with the Merit Based Incentive Program System. Provider reimbursements are now being explicitly tied to patient outcomes. The new payment system combined three quality incentive programs: the electronic health records incentives program, the physician quality reporting system, and the value based payment modifier.[ref]10 FAQs About the Merit-Based Incentive Payment System. SA Ignite.[/ref] Combining these three programs is a strong signal that encourages the incorporation of health innovation and information technology when measuring patient outcomes and quality of care delivery. The carrot and stick payment system will award bonuses and impose penalties on physicians, depending on where they score on quality measures.[ref]What the SGR bill’s merit-based pay means for health IT incentives (2015). Modern Healthcare.[/ref] It is extremely important that the US Department of Health and Human Services creates meaningful and fair quality metrics. There is great opportunity to address the quality gap of care delivery, as well as to cut out a substantial amount of the waste plaguing the current system.

Creating Performance and Quality Metrics

The second wave of health innovation technology focused on adding performance and quality reporting metrics into electronic health records. Quality metrics are essential to driving healthcare improvement. The 2010 Affordable Care Act prompted this second wave by shifting the payment paradigm. Revenue is now being tied to value and expected patient outcomes, a shift from fee for service to value based care. The shift from a fee for service to value based care model is one of the first steps in closing the quality gap. There are large variances in the quality of health services because providers lacked incentives to prescribe the most efficient and effective treatments. For example, the most common inpatient surgery for Medicare beneficiaries is hip and knee replacements. In 2014, the total cost per person of surgery, hospitalization, and recovery ranged from nearly seventeen thousand to over thirty thousand dollars, depending on geographic region.[ref]Comprehensive Care for Joint Replacement Model (2015). Centers for Medicare and Medicaid Services.[/ref] The new model incorporates stronger accountability for providers and addresses the greater challenge of health inequity.

This shift from volume to value has also encouraged the development of new technology to gather, share, and analyze large amounts of data that can manage and analyze the health outcomes of an entire patient population. Researchers and providers have an opportunity to study and analyze population health data. A reliable study could potentially assist insurers and policymakers in creating more fair and accurate quality metrics. The US Department of Health and Human Services recently announced that thirty percent of Medicare payments would be based on the quality of patient care, beginning in 2016. That percentage is expected to rise to fifty percent by 2018. New technology during the transition to value based care will be critical to addressing a great deal of the challenges during this time.

Something to Keep in Mind Moving Forward: Privacy and Security

Earlier this month, Tim Cook, chief executive officer of Apple released a statement informing the public that the government is requesting a master key to unlock the encryption protecting the valuable information between the walls of our smartphones. Cook asked the public to discuss the greater implications of this request and the precedent it sets for future actions. He explicitly stated that these actions could threaten our security.[ref]Tim Cook: U.S. government wants ‘something we consider too dangerous to create’ (2016). The Washington Post.[/ref] An annual survey conducted by Modern Healthcare found that forty two percent of respondents believed the threat of cybersecurity breaches would have “considerable impact” on security spending for information technology at their healthcare organizations. This followed one of the worst years in history for data breaches.[ref]Cybersecurity rising as health IT concern (2016). Modern Healthcare.[/ref] Mr. Cook has provided us the opportunity to have a thorough and transparent discussion of the important role of security when implementing any form of health information technology, from wearable technology and electronic health record systems, to the massive data collection currently being performed as an impetus of the Precision Medicine Initiative.

Massive data collection is a slippery slope. The Obama administration has publicized efforts to protect the privacy and security of individuals participating in the cohort study of the Precision Medicine Initiative. The final framework and guiding principles of privacy security can be found here. Prior to announcing the final framework and guidelines, the Health Information and Management Systems Society and the Association of Medical Directors of Information Systems made several recommendations. The most notable recommendation pinpointed the need to address better the “confidentiality, integrity, and availability” of data. Data from the Precision Medicine Initiative will be exchanged through many hands. It is important to have procedures in place to prevent the data from being compromised. The Precision Medicine Initiative promises to be a major step in healthcare innovation, but it is important we hold it, and all other health innovations, to high standards of privacy and security.


The US may look to other countries to address the challenges it faces in implementing health innovations. Jean Galiana of ACCESS Health US has interviewed several trailblazers, including leaders at Full Circle America, as mentioned earlier, and the linkAges time banking model. These organizations are using new technologies in innovative ways to improve care. Sofia Widén of ACCESS Health Sweden has published a substantial number of interviews and case studies of health innovation throughout the region, including Swedish eHomecare and the future of eHealth services. The ACCESS Health programs Modern Aging Sweden, Singapore, and China are also inspiring innovation and social entrepreneurship. As the US moves forward in our initiatives to improve the quality of care delivery through health innovation, it is important to have a thorough, evidence based, and quality focused discussion on creating value from future innovations.