If you’ve been following our series, you’ve now heard the phrase ‘innovation at scale’ a couple times. This means focusing on solving healthcare’s biggest problems, thereby moving the needle with respect to healthcare cost, clinical quality, and patient or provider experience, or as they’re known in healthcare, ‘The Quadruple Aim’. Everything we do in Providence St. Joseph Health’s (PSJH) Digital & Innovation team is aimed at innovating at scale and moving the needle for our organization. Building a cool digital experience is great, but in healthcare with increasing downward pressure on reimbursement and mounting strategic and operational challenges, for a digital team the fastest path to irrelevance is to focusing on solving problems that won’t move the needle. This sounds obvious, but it’s frequently the case that health systems don’t start with a transformational strategy, don’t focus on the customer or caregiver’s most important problems, and they don’t integrate digital as well as they should into their strategic plan.
Our organization, since the coming together of Providence Health & Services and St. Joseph Health, has been working towards building a transformational strategy under the leadership of our CEO Rod Hochman. The PSJH Digital and Innovation team has dual roles to support this transformational strategy; 1) to digitally enable the transformational strategy, and 2) to transform the way we do business by bringing in new thinking drawn from outside of healthcare, from the technology industry. So that we can play these two roles, at Providence St. Joseph Health, we have implemented a framework and process that begins with tying industry trends in healthcare and technology to our enterprise strategy, identifying and breaking down problems we seek to solve, and putting a disciplined structure around how we use technology to solving these problems.
The Strategy and the Digital Journey
We start with the enterprise strategy. As a large, complex $22B organization, PSJH has a core strategy that includes 15 initiatives we’re pursuing over the next 5 to 7 years. Digital could arguably power all of these initiatives, but it will have a bigger impact on some and not others. We don’t have the resources as a health system to engage digital with all of them. We’ve therefore organized our digital priorities around six Digital Journeys, that will take 5 to 7 years to complete, that support these strategic initiatives which we’ll share in depth in future posts. These Journeys are then disaggregated and sequenced into Problem Statements then Opportunity Areas that we believe can be meaningfully impacted by technology over the next 12-18 months.
Always Start with Defining the Problem
In the words of Albert Einstein, “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” We can all probably admit we usually do the opposite of what Einstein recommends. We all like to leap to solutions. That said, we’re trying to achieve this discipline, starting with a clearly articulated definition of the problem that a caregiver or patient is experiencing and the economic and/or clinical impact it is having on them and the organization. These Problems Statements are disaggregated into specific and addressable Opportunity Areas, each opportunity is sized in terms of its financial or clinical impact, and are prioritized according to a set of criteria which inform whether we’ll address them and how we’ll sequence them. We arrive at these problems through close engagement with executive, clinical, and operational leadership and deep quantitative analysis. The quantification is important. There is a cultural impact that sizing an opportunity has in terms of its economic and/or clinical impact. Sizing the opportunity helps people understand the value of solving the problem to patients and caregivers to the organization, and rallies support and prioritization by the organization.
Be Frugal: Leverage Existing Resources First, then Buy & Integrate Best of Breed
Once we’ve defined the Opportunity Area, we begin the technology evaluation process. The first step is, through a combined customer discovery and internal technology portfolio evaluation, to determine if we already own the digital tools that meet business and customer requirements. If we do own the tools, we work with business partners to integrate, scale, and implement them across the organization. If we do not own the tools internally, we look externally into the market at the range of large technology vendors who we already work with, early-to-mid-stage startups, and open source solutions to determine if there is something out in the market that can solve our customer problem. The Best of Breed solution should be the solution in the marketplace that most perfectly addresses the problem we’re trying to solve.
Finding the Best of Breed is not easy. This is where Providence Ventures, our phenomenal PSJH Information Services team, and our innovation partner AVIA all work together with our business partners to get a comprehensive scan of the market. The AVIA innovation network also allows us to tap into the collective wisdom of twenty-three other forward-leaning health systems when selecting the best of breed. If AVIA’s other health system partners agree on a single solution, the likelihood of that solution succeeding in the health IT ecosystem over time goes up dramatically. These technology solutions are also evaluated for their ability to integrate into existing systems and our ability to innovate with them as partners over time.
Build Technology as a Last Resort and then Commercialize
If we do not own a technology that may solve our problem or cannot find a best of breed solution in the market, we evaluate the potential to build the technology ourselves. It may sound odd for a health system that has the scale of software development resources PSJH has to say that we build technology only as a last resort, however, building technology is very expensive both in terms of software development as well as owning the lifetime cost of maintaining that technology. Therefore, we only build when there is true whitespace in the market or we gain a unique strategic advantage from building ourselves.
When we evaluate building a new solution or technology, we always ask ourselves three questions:
- If this product were being sold by an outside vendor, would our health system buy it?
- Does this product only solve our problem at PSJH, or is it generalizable to other health systems? How common is this problem with other health systems? Would another health system buy this solution?
- Would an outside investor invest in this solution?
If the answer to all three of these questions is ‘yes’, then the solution goes into the roadmap for development by our Digital Innovation Group.
An example of this approach is our spin out of Xealth in June of this year. The founding team from Xealth, who had built several successful companies in the past, worked with us as Entrepreneurs in Residence to define a whitespace problem we needed to solve. The problem they found was pervasive in our health system: “Caregivers can prescribe pharmaceuticals to patients from their EMR but little else. We need a solution that allows caregivers to prescribe content, digital apps, services and products just as they do pharmaceuticals today. This will extend our care for patients beyond the clinic.” The Xealth team then sold their solution to another health system, UPMC, which met our second test of validating that the problem we’re solving exists beyond just PSJH. Finally, in June, the Xealth team closed their first round of funding with DFJ leading the round with Providence Ventures and UPMC participating in the investment. So, the Xealth solution met the third test of external validation by one of the leading VCs in the industry, DFJ, who has invested in athenahealth, Box, Twitter, Tesla, and many other iconic companies.
Building technology internally coupled with commercialization is important because commercialization yields three primary benefits:
- Generates incremental value for our health system from the technology we incubate or create.
- Exposes our technology to market competition to ensure it gets better with time rather than becoming stale.
- Forces us to think not only about a technology solution, but also about a sustainable business model and value add that will perpetuate the solution over time.
The reason for the preference toward commercialization of solutions we build is that technology built by large corporations in any industry will get stale if not exposed to competition and therefore will not be sustainable. This is because the needs and priorities of the organization will shift over time making it harder to keep up if a market forms around the problem. We see this in all industries, but especially in health care. Think about all of the “home grown” EMR systems that were state of the art when they were built by health systems but then lagged in capabilities or were too expensive to maintain relative to competitors in the marketplace.
Once we have decided to build a technology, we use a customer-centric lean innovation product development methodology. The first step is to create a minimally viable product (MVP) which is the simplest product we can test with customers. Once the MVP is built, extensive customer testing is done to modify and improve the product around ways in which it can better serve customer needs and solve their problems. This is a very quick but iterative process focused on getting to customer value. When the product is ready and is delivering the solution to the problem, it goes out into system for scaling and for commercialization outside of the system.
Digital Will Not Transform Health Care but Powers the Transformational Strategy
As industries have begun to make the transition to becoming digital or digitally enabled, many go through a period where digital capabilities exist off to the side of core operations. This sub-optimizes the impact digital can have. As a first step to overcoming this, we believe that for maximum impact, digital strategy must be tightly integrated with a core business strategy that is in itself transformative. Digital is simply a tool to enable strategy that is transformational for the business. The digital problem solving cascade ensures our work in digital is relevant by focusing on the biggest problems with the greatest impact to our health system and ensuring they’re solved in a disciplined way.
Aaron Martin is Executive Vice President and Chief Digital Officer for Providence St. Joseph Health (PSJH), and Managing General Partner for Providence Ventures (PV). Aaron is responsible for the digital, web, mobile, and online marketing channel for PSJH.