Dr. William Rice at St. David’s HealthCare Discusses Health Tech Innovation
But what does it mean to be truly innovative? And more importantly how can physicians and health systems evaluate the health tech innovation claims of startups and measure their impact?
In his role, Dr. Rice supports a portfolio of informatics initiatives focused on usability, variation, analytics and modeling, and works to deploy a formalized innovation infrastructure across the St. David’s HealthCare system. St. David’s is part of the HCA healthcare network.
He is also board chair of the newly formed Austin Healthcare Council and member of the CPRIT Oversight Committee.
His concern is for both the physician and the healthcare system who are both held (or going to be held) accountable for improving performance and driving down costs.
Dr. Rice understands the difficulties that entrepreneurs face in trying to bring innovation to market. He himself has participated in the formation and initial work of a number of early-stage health care companies.
In the following conversation, Dr. Rice challenges companies to pressure test their claims and ask themselves whether their solution is an incremental change or wholesale improvement.
Defining Health Tech Innovation
Innovation is generally a positive thing, but it can be overused as a marketing term. As Sr. VP Clinical Innovation, St. David’s Healthcare, how do you define health tech innovation as it relates to short term and long term benefits.
William Rice, MD: When it comes to health tech innovation, long term benefits are not the question; it’s easy to have a long term vision. The challenge is to figure out the path to get there from here.
Part of the art of innovation is to fold changes into the current way of doing things. That may sound like an excuse to avoid moving quickly, but it isn’t. Certainly in healthcare, processes are intertwined. It’s an orchestra of things, so moving or changing one thing can impact other things down stream. Things need to be actively integrated.
The biggest challenge is that innovation is often based on the wrong paradigm. Companies come up with innovations for the current paradigm that itself may be outdated or replaced, True innovation is a discontinuous improvement in a process or product. It’s about creating a new paradigm that is more responsive to current healthcare needs.
Take EHR.It’s based on 1990’s technology. Iterations on a clicking and typing data entry approach are not innovative. We need to focus on natural language processing which does away with clicking and typing and makes input easier and less time consuming.
Health Tech Innovation’s Value Proposition
Can you share any insights into how you determine the value proposition of an “innovative” health tech service or product when evaluating need?
William Rice, MD: First and foremost, innovators need to understand the market well enough to know who the right customer is.
This is particularly challenging now, as physician practices and healthcare systems across the country are trying to transition from volume-based revenue models to value-based revenue models. Many, many physician practices and health systems still have 90% of their revenue derived from fee-for-service (volume-based) revenue models.
For example, an innovator who has a product that reduces the need for a certain service needs to identify the entity along the healthcare service chain who will benefit from its use. This may be an insurer today, a health system plan tomorrow, and a physician-led ACO in 3 years.
If a health tech company (new or established) were to come to you with their new product or service, what are the key criteria in evaluating their claims?
William Rice, MD: First, does the solution address a strategic challenge for the organization? Second, what is the experience of the management and third, what are the details of the solution?
Put another way, does the organization have a deep understanding of the current processes and its value proposition? How easy it is to pilot? Do they have a champion? A champion is physician or nurse or experts. It gives instant credibility.
What kinds of services or products are good candidates for a pilot program to test its value and viability?
William Rice, MD: Let’s consider the spectrum of care. It can be divided into “population health” (which is what happens in your daily life) and health episodes that can generally last up to 90 days (like when someone needs an operation).
In our system, we are now in the “episode business.”
In the “old days” and (until recently) most hospitals were in the “hospital business,” doing their best to provide excellent care to patients while they were in the hospital.
With changes in Medicare and CMS payment models, hospital systems are now strongly incentivized to work on quality and efficiency not only during the hospitalization, but also during the 90 days following hospital discharge (known as post-acute care).
Most hospital systems do not own the post-acute providers who deliver care to some patients during the time following hospital discharge. There is a need for products and services that help all parts of the system of episode providers better communicate, transition patients, measure quality, and demonstrate value.
In managing health episodes, I am particularly interested in pilots that can address issues in post-acute care and recovery.These costs can be very high. For many Medicare patients 50% of the overall cost of their episode occurs in the post-acute care setting (after the patient is discharged from the hospital). Post-acute care is outside a hospital but it’s still tied to a hospital’s strategic goal of being the best episode provider in the world.
For example, let’s say we are approached by a company who claims it knows all about care. They have software that can help you track your patients’ location and clinical status more easily. And it’s tied to other EHR providers and has a reporting component.
That’s an easy, low threshold pilot because it asks less of me. It’s virtual, outside my system, and it’s essential in helping to manage an episode. I need companies who can build that.
Advice for Entrepreneurs
What advice would you give entrepreneurs?
William Rice, MD: Focus on population or episode health; it’s difficult to do both.
Solutions that build a virtual network or can reduce readmissions are particularly critical.
Identify an inside champion and sell the right thing to the right customer at the right time. Be sure to get an experienced champion for your innovation as soon as possible. They will help you figure out what you don’t know you don’t know!