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Scale, speed and sustainability: The challenges and opportunities in healthcare IT

January 18, 2013

At MaRS we see innovative healthcare ideas every day. With nearly 27 working prototypes created at last year’s Hacking Health event and over 200 health information technology (IT) and medical device startups working with advisory services, there is no lack of creative ideas addressing the challenges facing Ontario’s healthcare system.

The biggest challenge is implementation. How can IT solutions get to a position in the healthcare system where they can impact patient outcomes, cost efficiencies, quality of care, staff productivity and more?

A CIO’s perspective

At this week’s MaRS Future of Medicine Series event, Lydia Lee shed some light on how innovation uptake can be improved with healthcare IT. Lydia is the vice-president and chief information officer (CIO) of University Health Network (UHN), a leading multi-site teaching and research hospital in Toronto (with a very cool Healthcare Human Factors solutions testing lab).

Lydia’s job as CIO involves leading and strategizing process improvement, as well as facilitating the appropriate use of technology within UHN. Between 3 and 3.2% of UHN’s yearly operations budget is spent on IT.

UHN buys technology via a request for proposal (RFP) process. Evaluation criteria include strength of technology, cost and flexibility of pricing model, and fit within the hospital’s existing infrastructure and culture. Lydia mentioned that while companies often “knock on doors” and demo cool technologies directly to researchers and clinicians, they should also always go through the RFP process. It is far easier for everyone involved to start the process properly than to put agreements into place retroactively.

Lydia identified three themes under which the uptake of healthcare IT innovation is impacted.

1. Scale: When an innovation’s efficacy is solidly proven in one institution, why is it so hard to scale it through the system?

Every institution uses different IT systems and has different teams and focuses of care. Like it or not, you simply cannot assume that because a solution worked in one institution it will work in all of them.

It’s tough to get a large enough cohort of user input to ensure efficacy across the board. However, increased collaboration and intra-institutional alignment on technology usage will help address this barrier moving forward. (See my notes on the ConnectingGTA program below.)

2. Speed: Why does the whole process take so long?

It will come as no surprise that the procurement process is a lengthy one. Lydia gave the following example: A researcher or clinician’s technology might be successfully proven within the hospital and can easily be used throughout the hospital because it was developed in-house. However, as soon as that researcher or clinician develops a NewCo around the successful technology, he or she becomes a vendor. The hospital is then forced to go through the procurement cycle and issue an RFP, which can take 12 to 24 months to be processed.

So if you are a NewCo startup, how can you get around this process? Some suggested workarounds include:

  • pre-negotiating RFPs with the hospital;
  • creating a special licensing deal with the hospital; or
  • sharing intellectual property rights with the hospital (if the hospital owns part of the technology, it doesn’t have to buy it).

While these processes are not yet implemented in IT, these workarounds will hopefully expedite the procurement process in the future.

3. Sustainability: How can hospitals ensure that research projects or tech pilots have longevity?

Healthcare IT solutions often hit a wall with long-term integration into the healthcare system when the grant funding that initially supported their entry into the system runs out and the hospital budget must take over. If the budget can’t support it, the technology is out.

To mitigate a rocky transition between grant and hospital budget funding, companies must consider the following factors:

  • Is the technology aligned with the hospital’s ongoing strategy? Can it be strategically justified in the hospital’s budget?
  • What are the ongoing costs for implementing and sustaining the technology (i.e., training)?
  • How can the technology be aligned with the existing internal IT infrastructure?

ConnectingGTA

One final note about cool healthcare IT stuff going on in the city: the ConnectingGTA program will unite health institutions across the Greater Toronto Area (and later, the entire province) so that electronic patient health information can be instantaneously shared across institutions. The first wave will unite 16 hospitals in the fall of 2013, capturing health information into a clinical data repository. This will be an asset to citizens and patients, and will create many opportunities for entrepreneurs to leverage increased data insights.

Thanks to Lydia Lee for her excellent insights into the space! Join us again on February 13, 2013 for the next MaRS Future of Medicine Series event.

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  • Tara

    Great insights – I would love to see more information about various funding models for health IT projects

    • Caitlin McCabe

      Thanks, Tara! Great idea – I’ll look into pulling something together on that topic soon.

  • http://twitter.com/pbjpaulito Paul Jones

    Great big picture overview of the medical technology and healthcare IT sectors. As an MD and founder of a health IT company we chose to focus our product and energy on the outpatient and ambulatory care market to gain a foothold before trying to approach any hospitals (which we consider enterprise level clients). Navigating a RFP process and developing the capacity so service large institutions like UHN frequently costs substantial sums of time and money. Not to say that there isn’t a reward in servicing these large institutions, because there certainly is, but is a difficult journey from what I am told and have learned through my research.

  • Pingback: How can we support entrepreneurs who are reinventing healthcare? - MaRS

Caitlin McCabe @ MaRS

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Caitlin helps make sure our clients in the life sciences and health care industry have a great experience with our life sciences practice at MaRS.

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