By Arthur A. Burley 
Healthcare innovation was my first job as a manager of research programs and then as Chief Technology Officer.
Philips is no longer a conglomerate of electronics. It has become a health technology company that focuses on the precision diagnosis and image-guided therapy. What’s more, the way we innovate today has changed from how we did in the past.
Worldwide, healthcare systems are struggling with rising costs and staff shortages. Old innovation methods won’t work if we want healthcare to be more accessible, affordable, and effective.
When I look back over the past 15 years, there are five main ways that healthcare innovation has changed.
The focus of technology for healthcare innovation was once on the product features. Now it’s about creating value-based care solutions
Innovation in medical technology was my first job. It was all about improving the functionality of devices and systems.
One example is the “CT slice war” when Philips and other companies fought for better CT scans. They increased the number of cross-sectional images (or slices) of a specific part of the body from 16 to 32, then 64, and onwards. The objective was simple: Improve image resolution. Radiologists would detect abnormalities in the patient’s body more easily.
Healthcare innovation will soon become more complex. The 2022 North American Deficit Reduction Act caused a major shockwave in the medical imaging industry. Many procedures in the field of medical imaging were affected by cuts to reimbursement. In hindsight, this was a sign that the economics of care would be more important. It was no longer enough to improve the resolution of a CT scanner.
Today, we see a shift towards value-based healthcare, which is about delivering on the quadruple goal of improving health outcomes, patient experience, and cost-effectiveness.
While product features are still very important, they can only be part of a larger solution. Fifteen years ago, we used to go into radiology departments to show off the features and performance of our scanner. A radiology chief might ask, “How can I help my department become more efficient in order to meet growing patient demand?”
Healthcare innovation must focus on integrated products, software, and services to answer such questions. It is time to shift from a product-centric approach to a solution-centric one.
One example of improving the efficiency of a radiology section is to analyze equipment usage and the time it takes for an image to be read and benchmarked with other hospitals. This data can then be used to make informed decisions about quality and productivity.
Innovations will only succeed if they have a tangible impact on customers. Or, as we have come to call it: “It is only a solution if the customer’s KPIs are met.”
To transition to value-based care, aligned incentives are crucial
Misaligned incentives are a major obstacle to adopting technological innovations that value-based care.
As an example, take hospital readmission management.
Patients discharged after a high-risk event such as heart disease or pneumonia are at the highest risk for relapse within the first thirty days. The Agency for Healthcare Research and Quality (AHRQ) estimates that over $41 billion annually is spent on patient readmissions within the first 30 days.
Telehealth technology allows patients to connect with their caregivers outside the hospital walls. It uses a combination of remote monitoring, education, and self-management. This can reduce costs and improve patient outcomes.
Legacy reimbursement models could still be tied to patient visits or procedures, creating an incentive to keep the status quo.
We are seeing a shift from pay-for procedures to pay-for outcomes with the rise in value-based care.
In the US, accountable healthcare organizations may be subject to a penalty for discharged patients who are readmitted within 30 calendar days. This creates an incentive to provide care at home.
The first pilots of telehealth and hospital readmission management showed promising results, with up to 49.5% fewer hospitalizations and a 34.5% lower cost of care [1].
New technologies are essential to healthcare innovation. They must be paired with new business models, outcome-based incentives, and new technology. This will allow for opportunities for long-term collaboration that is based on shared goals and risk.
Innovation on open digital platforms is key to solving problems
The healthcare IT landscape has become more complicated over the past 15 years. There is an increasing number of devices and systems, and there is a greater need to ensure that all components work safely and coherently.
Technology vendors must be able to see the larger picture.
It is no longer possible to assume that hospitals or health systems will only source components from one vendor. Philips must be open to integration with third-party products. Our solutions must be tailored to the specific needs of each customer. This will allow us to reuse standard building blocks as efficiently as possible.
This is why it is necessary to have a common digital platform. This approach reduces the duplication of building blocks between business silos and makes innovation more efficient. This makes innovation more efficient by allowing interoperability of solutions and integration with existing hospital information systems and third-party offerings.
Next, we will open our platforms to third parties in a safe and controlled manner.
There are a lot of apps being developed by universities and start-ups as a result of the rise in AI. Hospitals may have difficulty putting these apps to work if there isn’t an integrated platform that integrates with their workflow.
One CIO from a large hospital network stated during the recent AI Startup Program that he runs about 10,000 applications on 150,000 different terminals. I don’t want to manage more applications.
Companies like Philips can help. Hospitals are increasingly asking us to be an integrator and brokers of tech. This is exactly what the Philips Marketplace will do – help healthcare providers embed third-party applications into their workflows via a common deployment platform.
Patient data used to be stored in systems of records. We need a system for engagement that brings a 360-degree view into clinical workflows
The importance of connecting data across care continuums has increased as healthcare systems and devices become more interconnected.
Healthcare data has been traditionally stored in different silos. It is not often annotated or curated. It does not capture the entire clinical context.
The Electronic Medical Record (EMR), which has been more widely used over the last 15 years, has led to a system of record that supports billing and keeps track of clinical decisions. The EMR does not allow for patient data to flow between caregivers or provide them with any actionable insights.
Instead, we need a system for engagement that connects and interprets patient information from multiple sources to provide caregivers with relevant insights at their point of care.
The development of patient monitoring in the general ward is a great example. Each patient’s vital signs, such as heart rate and pressure, were manually tracked in the past. These data can now be automatically compiled and interpreted using smart algorithms. This allows nurses to respond to patients in need quickly. According to one study, this can result in a decrease in cardiac arrests by more than 86% according to one study [2].
As data is connected across departments, devices and episodes of care, our ultimate goal is to create a digital twin for a patient. This model will integrate all pertinent information about the patient and be updated as needed.
Already, digital twins are useful in diagnosing and treating heart diseases. They can offer a 360-degree view at the point where the patient is being treated. As a result, healthcare will be more personalized and precise.
Research is now at the forefront of innovation, working closely with customers and across companies
Our research organization has evolved to reflect the changing nature of innovation in health technology. This is why it looks quite different than 15 years ago.
Innovation used to be a sequential process, with central research labs working in relative isolation on concepts for new or improved devices or systems, following a technology roadmap. We would then transfer these concepts to product divisions in Philips, who would develop them further and push them to the market in a one-size-fits-all manner.
Nowadays, innovation is a more parallel process that collaborates with customers. For example, we are working with researchers from Karolinska University Hospital in Sweden on innovations in minimally invasive surgery, prostate cancer care and stroke care. We have similar research partnerships around the globe.