Innovation and digital transformation of the healthcare industry

April 25, 2018
7 mins

Innovation in Healthcare

People understand that innovation in healthcare needs to become routine. That’s not the issue. High costs, no access to quality healthcare, and the dearth of committed medical professionals: those are the issues.

Quick fact check

According to this report, high-income countries are expected to spend $9,019 per person on health in 2040, compared to the projected $1,935 for upper-middle income countries, $507 in lower-middle income countries, and $164 in low-income countries.

Fundamental redesign through innovation

How can we change this fragmented space to significantly better outcomes and cut costs? Innovation. With technological advances that often beggar belief, achieving breakthroughs are within the realm of possibility.

  • Innovation and digital transformation can improve the quality of healthcare while keeping costs in check. Experts predict that up to US$ 300 billion can be saved, especially where chronic diseases such as COPD and asthma are involved.
  • Innovative healthcare technologies can help optimize health services, reduce threats to public health, make the diagnosis of life-threatening diseases more efficient, offer effective clinical services, and facilitate communication between doctors and patients.

Focused efforts at meeting common needs will require diverse perspectives and adequate funds. It is to be noted that designing a healthcare innovation plan (community/company) will depend on cultural and economic factors as well. (For valuable information about the kinds of healthcare innovation, factors affecting innovation, barriers to innovation, and solutions, read Regina E. Herzlinger’s article titled “Why Innovation in Health Care Is So Hard,” which appeared in the May 2006 issue of Harvard Business Review.)

Let’s look at a few examples of how innovative solutions are transforming the healthcare sector.


Also known as e-health or telehealth, telemedicine is an innovative healthcare system that allows patients, particularly from rural and/or underserved areas, to access quality medical care using telecommunications technology, obviating the need to visit a doctor. Remote patient monitoring, mobile health, asynchronous transfer, and live video conferencing are examples of telemedicine. The global telemedicine market is poised to grow at 18% CAGR.

For instance, a home telehealth program at Partners Healthcare in Boston saved more than US$ 10 million in costs and reduced readmissions by 50 percent because a team of 3-4 nurses were able to care for 250 patients. The patients used monitoring devices at home to send medical data to the clinic, which used special software to identify patients who needed interventions. This reduced the frequency of unnecessary hospitalizations. Another encouraging example is the telemedicine center at Dr. Balabhai Nanavati Hospital, Mumbai, which has created a network of 78 peripheral centers in India and 35 centers in Africa.

Telemedicine mobile apps such as MDLIVE, LiveHealth Online, Express Care Virtual, Amwell, First Opinion, MyTeleMed, and Lemonaid provide access to board-certified doctors via live video, private messaging, voice calling, or chat options. Rise is an app that provides access to professional nutritionists.

Telemedicine has much value in mental healthcare. A study conducted in 2013 at the University of Zurich found that more long-term efficacy was found in patients suffering from depression who were given online therapy compared to those who attended counseling in person. ThriveOn is a mental healthcare app which provides programs based on cognitive behavioral therapy (CBT).

Several health startups harness today’s high-speed Internet connectivity and ubiquitous smartphone usage to offer various healthcare services such as booking doctor appointments, accessing fitness regimes, consulting alternative medicine practitioners, and ordering medicines.

Innovation Strategy playbook Ebook

Cloud-based Electronic Health Records (EHR)

Health data is being migrated to the cloud instead of being stored on paper or on immovable digital records. Cloud data is instantly accessible to clinics, hospitals, insurance companies, and patients, thus reducing mistakes, preventing unnecessary treatment, and ensuring necessary care. This is important because medical error is the third leading cause of death in the United States, behind heart disease and cancer. The cost of medical errors is estimated to be as much as US$ 19 billion per year.

Cloud-based electronic medical records software systems such as NueMD, PrognoCIS by Bizmatics, eClinicalWorks, and AllegianceMD are helping transform healthcare delivery. A 2014 study on the benefits of EHR adoption in the United States reports enhanced overall patient care (78%), ability to remotely access patient charts (81%), and receiving alerts of potential medication errors (65%) and critical lab values (62%).

However, due to the extremely sensitive nature of the data involved, there is an increased focus on data security

The Internet of Medical Things (IoMT)

The Internet of Medical Things (IoMT): Innovation and digital transformation of the healthcare industry

Source: Nexeon

According to an Allied Market Research report, the IoT healthcare market is predicted to reach US$ 136.8 billion globally by 2021. Currently, there are 3.7 million medical devices in use by patients to monitor different body parts that help doctors make informed medical decisions. A new term, the Internet of Medical Things (IoMT), is described as “the connected system of medical devices and applications that collect data that is then provided to healthcare IT systems through online computer networks.”

It is now possible to remotely monitor a person’s health via actuators, embedded devices, or a network of sensors. Such IoT-enabled devices find the greatest use in chronic disease management, elderly care, pediatric care, fitness management, and personal health. For example, AdhereTech’s smart wireless pill bottles help patients take their medicines on time. The bottles have sensors and built-in cellular chips that transmit real-time data about the patient’s health. on the bottle. Vitality GlowCap is another way to ensure patient adherence. The smart cap with a built-in wireless computer tracks doses and sends reminders about the next dose.


Wearable technology includes electronics that can be worn on the body, either as an accessory or as a part of one’s clothing. Most consumer wearables now have Radio Frequency Identification (RFID) tags and Near Field Communication (NFC), so they can communicate with IT systems.

Examples are aplenty. Health Care Originals has developed an intelligent asthma monitoring device called Automated Device for Asthma Monitoring and Management. Quell offers a drug-free wearable device that relieves chronic pain. Google developed Google Smart Contact Lenses along with Novartis to help patients manage diabetes. Activity trackers like FitBit and the Asus Vivo Watch track things like heart rate, calories burned, and steps taken to provide a picture of one’s activity levels.

Artificial Intelligence Applications

A 2016 report from CB Insights revealed that around 86 percent of healthcare organizations, technology vendors, and life science firms were using artificial intelligence technology. Healthcare platforms are being developed that help patients manage chronic diseases, take their medications on time, and determine if a physician’s visit is required.

Here are some popular applications of AI. A digital nurse developed by, Molly, uses machine learning to help monitor a patient’s condition, especially those with chronic illnesses, and follow up with treatments between doctor visits. The AiCure app, developed by NIH, uses AI to monitor medication compliance in patients by harnessing the webcam of their smartphones. U.K.-based startup called Babylon launched an AI-powered app that listens to the patient’s symptoms and medical history and offers medical advice (but not formal diagnoses). It uses speech recognition and compares the symptoms against a database of known diseases. Boston Children’s Hospital created KidsMD, an Alexa skill on Amazon Echo to help parents decide whether their children’s symptoms require a visit to the doctor. Atomwise developed AtomNet, a program powered by deep learning technology, which speeds up the process of molecule discovery, and has helped find potential drug candidates to treat Ebola infections and multiple sclerosis. Vectis Intelligence, a Dutch company, uses AI to find errors in digital healthcare systems, prevent unnecessary hospitalizations, reduce workflow inefficiencies, and discover errors in treatments.


While there is no argument about how technology will drive healthcare innovation, there are several other factors evolving and powering novel models of care.

In an industry where the journey of new drugs or processes typically takes years (development, trials, approval, widespread adoption) and billions of dollars as investment, making innovation happen is not a walk in the park. Organizations in the healthcare sector need a well-structured plan to address global healthcare challenges.

Take a practical approach to innovation

Organizations must have a practical approach to boost innovation such as “creating R&D incentives for industry in areas of high patient need and developing initiatives to promote rapid uptake by clinicians,” says Dr Marisa Miraldo, Associate Professor in Health Economics at Imperial College Business School, UK.

Appoint a chief innovation officer

Firms working in the healthcare sector recognize they need dedicated chief innovation officers just like any other company (say, Brian Barnes at Tenet or Karen Murphy at Geisinger).  “In many cases, healthcare organizations want executives who will discover and mobilize other entrepreneurs or intrapreneurs to explore new clinical, operational and financial models and test fresh value propositions. They want executives who champion the idea of risk, but who are willing to take only calculated risks,” said Curt Lucas, President and CEO, InveniasPartners, a Chicago-based healthcare executive search and talent advisory services firm.

Create a culture of innovation

What’s also imperative is creating a culture of innovation. When there is a real desire to make a difference, there can be no shortage of ideas. But not many organizations have a system to support these ideas or manage them successfully. Good ideas must go to good places! Companies would do well to invest in idea management platforms or other innovation campaigns. Remember though that brainstorming without a step-by-step methodology will make no sense. Understand what the real problem is.

Open up innovation

“We need approaches to the solutions that aren’t just arithmetic and additive but are in some sense logarithmic. This will require us to reach across historic boundaries and unlock the potential of collaboration across the usual disciplines.” Jeffrey S. Flier, MD – Dean of the Faculty of Medicine, Harvard University. Some are going the open innovation way. For example, pharmaceutical giant Eli Lilly has the Open Innovation Drug Discovery (OIDD) program which involves academia, research institutions, and drug companies. Through acquisitions, licensing agreements, and promising collaborations, Eli Lilly deploys innovation.

 Healthcare companies world over are seeking “strategic clarity” to add more value and identify new revenue sources. The Health Care Advisory Board’s Annual Health Care CEO Survey 2017 revealed some key insights from 350 respondents, who rated 26 issues on a scale of A (indicating greatest interest to know more from the Board) to F. The results show that 57% assigned A grade to innovative approaches to expense reduction and 48% to exploring diversified, innovative revenue streams. (Although it seems to be all about money, there are people who do really care.)

To innovate in the right direction, solving the right problem is key. Understanding customer needs, finding different ways to ask (and answer) the same question, not being afraid to challenge the status quo, and keeping the innovation unit autonomous should help.

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About the Author

Satabdi Mukherjee
Satabdi Mukherjee is a freelance writer with a special interest in business and technology. She likes to stay informed about the latest developments around the world and considers herself an information junkie.

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