Health IT Companies Should Focus on Innovation, Report Finds

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Health IT companies need to focus on innovation in order to create new services and business models, according to a new report from PricewaterhouseCoopers' Health Research Institute, Healthcare IT News reports (Manos, Healthcare IT News, 10/7).

Details of Report

For the report, HRI:

  • Interviewed more than 30 top executives at health care technology companies; and
  • Conducted a survey of more than 35 health technology companies.

Respondents included companies focused on:

  • In-vitro diagnostics;
  • Disposable medical products;
  • Medical equipment;
  • Diversified life sciences;
  • Implantable devices; and
  • Other health care sectors (PwC Health Research Institute report, October 2013).

The report also includes a Web-based interactive innovation scorecard based on companies' innovative practices.

Findings

Researchers found that only 14% of medical technology executives have formally managed innovation activities. Meanwhile, 17% of such respondents said they believe their companies are "innovation pioneers," according to Healthcare IT News.

The report also found that:

  • At least 18 new companies are driving innovation in the health IT sector;
  • A device's value is now measured by the company's ability to help customers solve broader problems;
  • Integrated services and business models are becoming more important;
  • Health care technology companies have been slower than other businesses to use new social, mobile, analytic and cloud technologies; and
  • Such companies are relying on open innovation to drive future growth.

The report found that while health care technology executives lack formal processes to achieve greater innovation, they expect a higher level of innovation over the next three years.

Reaction

In a news release, PwC Managing Director Christopher Wasden said, "Historically, medical technology innovation has relied on incremental improvement ... [b]ut 'innovation' needs redefining for an environment that rewards value -- measured in affordable patient outcomes and customer satisfaction -- over volume."

Wasden said that health care technology leaders "need to change their business models, their corporate DNA, to embrace lean innovation beyond their core operations."

Ed Yu -- principal at PwC -- outlined three factors that are "essential to transform today's medical technology companies," including:

  • Embracing failure;
  • Embracing the disease; and
  • Measuring innovation with forward-thinking metrics (Healthcare IT News, 10/7). 

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