The Challenge of Innovation in Healthcare – A Complex, Evolving Market with Misaligned Incentives

  • CMU Swartz Center for Entrepreneurship
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The big challenge in selling innovation to healthcare is the misalignment of payment incentives exacerbated by a period of transition from fee-for-service to value-based care.  Design a system to deliver better patient care at a lower cost – you may have just reduced hospital revenue.   Target the insurers who realize the savings – they cannot always influence care delivery.

All of this is complicated by the time required to prove innovation in this market – the clinician who values the innovation is not the financial decision maker who can approve adoption.  The CFO wants evidence of savings – from proposal to white paper can be a 3-4 year cycle. Many healthcare innovators burn through their funding before the puzzle is solved.