The Value Dilemma: Cost Control vs. Innovation

Dear CSS Members and Colleagues:

Enclosed is a short article which takes a 30,000 view of hospital strategy and priority. For all of us who would want to innovate better treatment for our patients, this will be a growing challenge. Innovation comes in three forms in healthcare according to Regina Herzlinger of Harvard Business School:

  1. Technological Innovation: This might include newer types of implants, application of technology such as robotics, navigation and mixed media (VR, AR, and AI), etc.

  2. Consumer Innovation: This would include newer models of care delivery often requiring restructuring or realignments.

  3. Integrator Innovation: This would include utilizing two or more technologies or care models to improve care.

All of these innovations will, at least initially, require investment and generate costs. Such initiatives will come up against Corporate strategy driving all hospital systems currently. This will impact not only our care in our hospitals, but our ability to introduce new technology and the effectiveness of industry to create these. Hopefully some of you may have solutions which you might share. But here is a thought (one which I learned from Professor Herzlinger at HBS): No innovation can be sustainable and successful unless it improves care while at the same time lowering cost. This is the basis of the concept of Value, where Value – Outcome/Cost. We’ll be considering this at this years CSS Meeting.

To view a discussion between myself and Dr. Ronald Navarro regarding cost control versus innovation, please click here.

Kind Regards,

“JP” Warner, MD

Founder, CSS

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