Building an Innovation Engine in Healthcare: Hospital for Special Surgery
How a hospital is distinguishing itself by launching an innovation center and employing design thinking approach
Hospital for Special Surgery (HSS) is an example of a successful hospital that aligns its operating and business models through structured innovation and design thinking methodology.
HSS is a nationally top-ranked academic medical center dedicated to orthopedics.1 By launching the Innovation Center in 2014, HSS has pioneered innovation in orthopedics through research and commercialization of technologies with external partners. In the first few months since its inception, the center has seeded its fund with $1 million and is planning to raise additional funds.2
While academic medical centers have significant advantage for developing innovations with high patient volumes and clinicians with deep understanding of complicated workflows, innovation management is particularly challenging in healthcare due to the high degree of variability and uncertainty. Moreover, there aren’t sufficient incentives and funding available for employees to participate in the innovation process. HSS tackles these issues with the Innovation Center, offering development infrastructure both for its clinicians and start-ups.
In a time of increasing consolidation, HSS has managed to remain independent and to grow by employing innovation as a key driver to distinguish itself.3 The key factors of HSS’ success are its focus on one area of specialty (orthopedics) and systematic innovation approach.4 The hospital has successfully addressed the industry void in identifying and evaluating innovative medical solutions. While the hospital opened Innovation Center last year, it has been collaborating with commercialization partners since 1979.5 As an academic institution, the hospital recognizes that discovery of ideas is an essential outcome of the research performed at the hospital by its physicians and that these ideas have the potential to turn into products with commercial importance.6 The portfolio of products supported by the center encompasses not only traditional biomedical science products such as implants, but also new care delivery process innovations, wearable and digital technology solutions and telemedicine.
Organization structure
The center invites its staff and start-ups to test, pilot and advance ideas that are aligned with the business model of the hospital.8 By having a clearly defined strategy, the right processes, and by building a team of dedicated resources, HSS created an ecosystem of researchers and commercial partners that convert concepts into feasible products. 6
The center is structured around key resources including engineers and business advisories that provide support from inception of ideas to building business plans and ensuring regulatory compliance of products. Governance of the center is supervised by the Innovation Senior Executive Team including hospital CEO, Surgeon-in-Chief and Chief Scientific Officer.
Innovation process
HSS employs lean methodology and design thinking in the innovation process. There are 4 key steps followed in this process:3
- Idea generation: The center engages in ventures and innovators; generates ideas based on unmet needs in the market. Hospital physicians are encouraged to prepare presentations of their ideas and pitch to the innovation team.
- Evaluation of idea: Ideas are assessed based on a standard set of criteria, with evaluation turnaround of 2 weeks. The center brings assessment back to innovator to discuss the feedback and prioritizes ideas that demonstrate greatest potential.
- Acceleration: Development roadmaps and business plans are created for prioritized ideas that include the activities required to bring the value of ideas. Prototypes are built and funding is raised in this step.
- Commercialization: Technology is licensed or start-up creation is supported. The product is scaled up and revenue is shared with the innovator.
The center focuses on rapid cycle of iteration and testing throughout the development of ideas. Senior management emphasizes that rapidly building a prototype to collect feedback early in the process improves the success of innovation.3
As the next steps, HSS is planning to launch an online platform where employees can submit ideas and work with experts to further develop their ideas. The hospital is planning to further expand idea generation process by holding innovation and pitch days.
HSS provides a good example of how innovation can be utilized to not only build products but improve processes and create value even in most challenging industries like healthcare.
References
1 “About Hospital for Special Surgery” https://www.hss.edu/about.asp
2 “HSS Innovation Center Champions New Ideas”, Discovery to Recovery, Winter 2014 https://www.hss.edu/files/DiscoveryToRecovery-Winter2014.pdf
3 Ranawat, Anil S. et al. “Aligning Physician and Hospital Incentives: The Approach at Hospital for Special Surgery.” Clinical Orthopaedics and Related Research 467.10 (2009): 2535–2541. PMC. Web. 9 Dec. 2015
4 Lewis, Carol “How Hospital for Special Surgery helps its superstar patients get ‘Back in the Game’”, Crain’s New York Business, http://www.crainsnewyork.com/article/20151022/HEALTH_CARE/151029948/how-hospital-for-special-surgery-helps-its-superstar-patients-get-back-in-the-game
5 Jayantha, Akanksha, “25 Hospitals with Innovation Centers”, Becker’s Health IT & CIO Review, October 1, 2015, http://www.beckershospitalreview.com/healthcare-information-technology/25-hospitals-with-innovation-centers.html
6 Angelo, Mark “Building an Orthopedic Innovation Engine”, 2015 http://www.orthoserviceline.com/wpcontent/uploads/2015/02/OrthopedicInnovationEngine.pdf
7 Leventhal, Rajiv, “Hospital for Special Surgery Launches Innovation Center for New Medical Technologies”, September 15, 2014, http://www.healthcare-informatics.com/news-item/hospital-special-surgery-launches-innovation-center-new-medical-technologies
8 Shapiro, Luis et al. “Teaching Hospitals are the Best Place to Test Healthcare Innovation”, Harvard Business Review, November 21, 2014, https://hbr.org/2014/11/teaching-hospitals-are-the-best-place-to-test-health-innovation
I enjoyed reading this post in part because it highlights an emerging pathway for innovation within large institutions. It has long been recognized that small companies, funded by venture capitalists, tend to pursue high-risk projects that lead to innovation. Here we see a new channel for innovation, sponsored by a large institution with significant resources and an established business to reduce risk. As shown by HSS, these centers provide a pathway to understand medical needs of patients/physicians, and establish a process to develop technology. The innovation model has been duplicated by many private companies (e.g. Johnson and Johnson, Dupont, Wal-Mart) with varying levels of success. Internal venture arms of large companies (e.g. SR1 at GlaxoSmithKline) are another example of this trend.
I came across this article a while back which provides some broader context for this post: http://techcrunch.com/2015/10/05/why-businesses-back-innovation-centers/
This is a great post, Oyku – thanks for writing about such an interesting organization. I’m not particularly familiar with the healthcare industry, but this seems like such a fascinating application of design thinking in an industry that could really use some disruption. It seems like HSS is also using an entrepreneurial application to promote even more creativity and efficiency in its operations. I’m excited to see how the organization progresses and continues to innovate in this space.
Great post Oyku, I enjoyed reading it and this is the first time for me to know about HSS and its interesting innovation model. I think that the healthcare industry can benefit a lot from adopting standard innovation and design thinking techniques and the results can be wonderful for both institutions and patients.