Why Traditional Healthcare Institutions Should Act More Like Startups
The following is a guest article by Noah Waxman, Co-Founder and CEO at Cactus
A curious paradox has emerged in the healthcare industry. Despite their vast resources and established infrastructure, traditional healthcare institutions often find themselves trailing behind nimble startups in terms of innovation. This disparity isn’t just a matter of perception; it’s a growing reality that threatens to reshape the entire healthcare ecosystem.
While startups capture headlines and venture capital with their novel approaches to healthcare delivery – venture funding to health startups was up 48% quarter-over-quarter in Q1 – established institutions risk being left behind. Fast Company’s list of most innovative companies in healthcare in 2024 is dominated by startups. The solution, however, lies not in competing with startups, but in learning from them. By adopting startup-like agility and embracing innovation, traditional healthcare giants can leverage their unique strengths to not only catch up but potentially leapfrog their smaller competitors.
The Benefits of Traditional Healthcare Systems
Established networks of credentialed providers form the backbone of traditional healthcare systems. These networks encompass a wide range of specialties and expertise, allowing for comprehensive patient care under one umbrella. The collective knowledge and experience of these providers represent a valuable resource that startups struggle to replicate quickly.
Extensive clinical infrastructure in the form of state-of-the-art facilities, advanced medical equipment, and robust administrative support provide another advantage to established systems. Such infrastructure takes years to build and refine, giving traditional systems a significant head start in providing high-quality, multifaceted care.
Existing relationships with healthcare vendors provide established systems with streamlined access to cutting-edge medical technologies and supplies. These partnerships—often built over decades—can lead to preferential pricing, early access to new products and services, and collaborative research opportunities. For startups, building such relationships from scratch can be a time-consuming challenge.
Traditional healthcare systems also benefit from large, diverse patient bases, which offer a wealth of data and real-world experience. This extensive base of patient histories allows for more informed decision-making, better management of a population’s health, and opportunities for large-scale clinical research. Startups often struggle to achieve the same scale and innovate diversity in their patient populations, limiting their ability to draw meaningful insights.
Finally, brand trust, forged over years of service, is perhaps healthcare systems’ most valuable asset. Many patients have long-standing relationships with these institutions, often spanning generations. This trust translates into patient loyalty and a willingness to engage with new services or innovations introduced by their healthcare provider, giving traditional systems a significant advantage in adopting and scaling new initiatives.
Despite traditional providers’ formidable advantages, healthcare startups are often perceived as more innovative. They excel in areas where traditional systems often falter: immediate and timely personalized care, user-friendly telemedicine and online services, and innovative approaches to self-care and self-discovery.
These companies are attracting significant venture capital interest by addressing niche needs and integrating patient experience considerations with clinical care. Their success highlights the areas where established healthcare systems are falling short when it comes to innovation.
To reclaim their position as innovative leaders, healthcare giants should leverage their unique strengths while adopting startup-like agility. One of the best ways to capitalize on the best of both worlds is to leverage cross-disciplinary expertise. This advantage can be used to create integrated, consumer-friendly interfaces that streamline the patient experience across various specialties.
Mt. Sinai’s Lab100 is a prime example of this approach. Mt. Sinai collaborated with Cactus to create a new clinic experience aimed at collecting data and biomarkers for the Mt. Sinai research team. Together, they developed 10 gamified testing stations with interfaces that guide visitors through each activity. Lab100 successfully tested an innovative method for conducting clinical research and offering care, merging the digital novelties of a startup with the foundation of an institution like Mt. Sinai.
Here are other strategies to consider:
Embrace Consumer-Centric Design
Healthcare systems can address unique consumer needs and pain points by mapping out patient journeys and focusing on key moments where health systems can improve the experience. Startups win by paying attention to pain points, not just speed alone.
During the pandemic, healthcare providers in Australia and England created virtual COVID-19 wards. This initiative empowered patients to manage their illnesses at home with the help of technology and trusted information. It not only solved hospital pain points by reducing their demand but also transformed from passive recipients to active participants in their care.
Prioritize Provider Well-Being
Designing workflows with healthcare providers in mind can help combat fatigue and burnout, ultimately improving the quality of patient care and fostering an environment conducive to innovation.
For example, the Mayo Clinic partnered with Ambient Clinical Analytics to develop and implement a real-time clinical decision-support system called AWARE (Ambient Warning and Response Evaluation). This system helps reduce cognitive overload and burnout among healthcare providers by streamlining data presentation and improving the efficiency of workflows.
Foster Internal Innovation Labs
Some healthcare systems are creating incubators for clinician-founded ventures, encouraging innovation from within their own ranks. This approach combines the best of both worlds: the resources of a large institution with the entrepreneurial spirit of a startup.
The Acceleration Lab and Penn Medicine’s Center for Health Care Innovation act as an incubator for clinician-founded ventures. The lab provides resources and support for healthcare professionals to develop and test new ideas, ultimately improving patient care and operational efficiency.
While established systems should be leading innovation, strategic partnerships or acquisitions can still be beneficial. Collaborating with digital health platforms can enhance the patient experience by combining popular branding and digital interfaces with in-person care networks.
The future of healthcare innovation lies not in choosing between the strengths of established systems and the agility of startups, but in combining the best of both worlds. As traditional healthcare institutions awaken to their full innovative potential, we can expect to see a new era of patient care that marries comprehensive medical expertise with cutting-edge consumer experiences.
Noah Waxman is an entrepreneur, brand strategist, and award-winning designer who partners with healthcare visionaries around the globe to design and build the health and wellness companies of tomorrow from the ground up. As the CEO and Co-Founder of the strategy & design firm Cactus, Noah has spearheaded design thinking for global health brands including Advent Health, Mount Sinai, Canyon Ranch, Mayo Clinic, and Blue Zones to create innovative experiences that benefit both provider and patient.
The following is a guest article by Noah Waxman, Co-Founder and CEO at Cactus
A curious paradox has emerged in the healthcare industry. Despite their vast resources and established infrastructure, traditional healthcare institutions often find themselves trailing behind nimble startups in terms of innovation. This disparity isn’t just a matter of perception; it’s a growing reality that threatens to reshape the entire healthcare ecosystem.
While startups capture headlines and venture capital with their novel approaches to healthcare delivery – venture funding to health startups was up 48% quarter-over-quarter in Q1 – established institutions risk being left behind. Fast Company’s list of most innovative companies in healthcare in 2024 is dominated by startups. The solution, however, lies not in competing with startups, but in learning from them. By adopting startup-like agility and embracing innovation, traditional healthcare giants can leverage their unique strengths to not only catch up but potentially leapfrog their smaller competitors.
The Benefits of Traditional Healthcare Systems
Established networks of credentialed providers form the backbone of traditional healthcare systems. These networks encompass a wide range of specialties and expertise, allowing for comprehensive patient care under one umbrella. The collective knowledge and experience of these providers represent a valuable resource that startups struggle to replicate quickly.
Extensive clinical infrastructure in the form of state-of-the-art facilities, advanced medical equipment, and robust administrative support provide another advantage to established systems. Such infrastructure takes years to build and refine, giving traditional systems a significant head start in providing high-quality, multifaceted care.
Existing relationships with healthcare vendors provide established systems with streamlined access to cutting-edge medical technologies and supplies. These partnerships—often built over decades—can lead to preferential pricing, early access to new products and services, and collaborative research opportunities. For startups, building such relationships from scratch can be a time-consuming challenge.
Traditional healthcare systems also benefit from large, diverse patient bases, which offer a wealth of data and real-world experience. This extensive base of patient histories allows for more informed decision-making, better management of a population’s health, and opportunities for large-scale clinical research. Startups often struggle to achieve the same scale and innovate diversity in their patient populations, limiting their ability to draw meaningful insights.
Finally, brand trust, forged over years of service, is perhaps healthcare systems’ most valuable asset. Many patients have long-standing relationships with these institutions, often spanning generations. This trust translates into patient loyalty and a willingness to engage with new services or innovations introduced by their healthcare provider, giving traditional systems a significant advantage in adopting and scaling new initiatives.
Despite traditional providers’ formidable advantages, healthcare startups are often perceived as more innovative. They excel in areas where traditional systems often falter: immediate and timely personalized care, user-friendly telemedicine and online services, and innovative approaches to self-care and self-discovery.
These companies are attracting significant venture capital interest by addressing niche needs and integrating patient experience considerations with clinical care. Their success highlights the areas where established healthcare systems are falling short when it comes to innovation.
To reclaim their position as innovative leaders, healthcare giants should leverage their unique strengths while adopting startup-like agility. One of the best ways to capitalize on the best of both worlds is to leverage cross-disciplinary expertise. This advantage can be used to create integrated, consumer-friendly interfaces that streamline the patient experience across various specialties.
Mt. Sinai’s Lab100 is a prime example of this approach. Mt. Sinai collaborated with Cactus to create a new clinic experience aimed at collecting data and biomarkers for the Mt. Sinai research team. Together, they developed 10 gamified testing stations with interfaces that guide visitors through each activity. Lab100 successfully tested an innovative method for conducting clinical research and offering care, merging the digital novelties of a startup with the foundation of an institution like Mt. Sinai.
Here are other strategies to consider:
Embrace Consumer-Centric Design
Healthcare systems can address unique consumer needs and pain points by mapping out patient journeys and focusing on key moments where health systems can improve the experience. Startups win by paying attention to pain points, not just speed alone.
During the pandemic, healthcare providers in Australia and England created virtual COVID-19 wards. This initiative empowered patients to manage their illnesses at home with the help of technology and trusted information. It not only solved hospital pain points by reducing their demand but also transformed from passive recipients to active participants in their care.
Prioritize Provider Well-Being
Designing workflows with healthcare providers in mind can help combat fatigue and burnout, ultimately improving the quality of patient care and fostering an environment conducive to innovation.
For example, the Mayo Clinic partnered with Ambient Clinical Analytics to develop and implement a real-time clinical decision-support system called AWARE (Ambient Warning and Response Evaluation). This system helps reduce cognitive overload and burnout among healthcare providers by streamlining data presentation and improving the efficiency of workflows.
Foster Internal Innovation Labs
Some healthcare systems are creating incubators for clinician-founded ventures, encouraging innovation from within their own ranks. This approach combines the best of both worlds: the resources of a large institution with the entrepreneurial spirit of a startup.
The Acceleration Lab and Penn Medicine’s Center for Health Care Innovation act as an incubator for clinician-founded ventures. The lab provides resources and support for healthcare professionals to develop and test new ideas, ultimately improving patient care and operational efficiency.
While established systems should be leading innovation, strategic partnerships or acquisitions can still be beneficial. Collaborating with digital health platforms can enhance the patient experience by combining popular branding and digital interfaces with in-person care networks.
The future of healthcare innovation lies not in choosing between the strengths of established systems and the agility of startups, but in combining the best of both worlds. As traditional healthcare institutions awaken to their full innovative potential, we can expect to see a new era of patient care that marries comprehensive medical expertise with cutting-edge consumer experiences.
Noah Waxman is an entrepreneur, brand strategist, and award-winning designer who partners with healthcare visionaries around the globe to design and build the health and wellness companies of tomorrow from the ground up. As the CEO and Co-Founder of the strategy & design firm Cactus, Noah has spearheaded design thinking for global health brands including Advent Health, Mount Sinai, Canyon Ranch, Mayo Clinic, and Blue Zones to create innovative experiences that benefit both provider and patient.
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2024-09-24 19:30
Except for the headline, this story has not been edited by Healthcare Central is published from a syndicated feed.
