America has a pretty rich legacy with regard to pioneering clinical methods and devices; but when it comes to delivering care, well, not so much. According to Mayo Clinic's Michael Brennan, M.D., "The way in which we deliver health care has remained surprisingly static over the years. For example, the relationship between physicians and their patients has been largely paternalistic. Exam rooms today look much as they always have. It's odd that in light of the advancements in other parts of the medical process, there's been very little change in these areas."

If we're going to cross chasms and bend curves, we need large-scale innovation in health care rather than years of re-engineering the old paths and curves. Henry Ford once captured the essence of the difference between large-scale and small-scale innovation. "If I asked my customers what they wanted, they would have said a faster horse."

Innovation is purposeful invention. It is applied creativity that results in a significant difference. It is an idea that works for a living. If necessity is the mother of invention, then the nursery ought to be overflowing these days because there sure seems to be a lot of necessity floating about. Dan Wolf, chairman of the board at Munson Healthcare in Traverse City, Mich., has suggested that "Moving from volume to value depends on general and specific changes that are enabled by health care innovation in processes, service lines, networks, science and operations."

Reaching Out

Reflecting on the vast literature that exists related to innovation, it would appear that one source of innovation outpaces the others when it comes to large-scale innovation. It might best be described as a "reach-out." It involves someone in one sector — health care, for example — reaching out for insights in a clearly unrelated sector. According to Scott Berkun in his book, The Myths of Innovation, a recent survey of more than 100 innovators in various fields revealed that more than 70 percent felt they got their best ideas by exploring areas in which they were not experts. "The ideas found during these explorations often sparked new ways to think about work in their own domain. And since they didn't have as many preconceptions as people in that field, they could find new uses for what were seen as old ideas."

A great example of a reach-out was Henry Ford's use of a "disassembly line," the slaughterhouses where cattle were hung on hooks that moved methodically past butchers who then expertly cut them to pieces until the only thing left on the hook was the "moo." Of course, Ford reversed the disassembly process to manufacture automobiles by bringing together key components on an assembly line. When Toyota began to build its production system after World War II, it was Ford they reached out to emulate. Later, Toyota's Taiichi Ohno used American supermarkets to help implement the idea of just-in-time production by watching food items replenished after they were removed by the customer from the shelf.

The da Vinci robot resulted from reaching out into the military research being sponsored by Darpa. (DARPA is an abbreviation for the Pentagon's Defense Advanced Resource Projects Agency.) The technology originally was developed to facilitate surgery on remote battlefields. Among DARPA’s other contributions is the technology underpinning GPS, carbon fiber composites and advanced prosthetics, not to mention much of the stealth technology that has revolutionized U.S. weaponry.

Reaching out often involves bringing disparate ideas and components together to make something new. For a dramatic example of this, recall the scene in the movie “Apollo 13,” where the engineers on the ground found themselves compelled to figure out a fix for rising CO2 levels in the lunar module. One of the engineers brings in a large box of seemingly unrelated parts, dumps them on a table and informs his fellow engineers that the pile represents what the astronauts have available to work with. Creating a fix required repurposing items into a workable bundle. The "steely-eyed missile men" pulled it off by designing a new emergency CO2 scrubber out of the spare parts.

Such repurposing doesn't always involve tangible objects, but can result from imaginative mental associations. Toby Cosgrove, M.D., president and CEO of Cleveland Clinic, initially made his reputation not only as a world-class thoracic surgeon, but as a prolific inventor of medical devices. One of those devices was inspired by a whaler's harpoon.

Proximity can accelerate innovation by making it easier to reach out. Harvard strategy expert Michael Porter has emphasized the importance of geographic clusters that physically concentrate the talent and experience that fosters innovation. Rochester, N.Y., is often cited as an example of a cluster of innovation and entrepreneurship in optics. The corridor running from Minneapolis to Rochester, Minn., has a similar reputation in medical devices.

Business historians suggest that the Silicon Valley emerged out of one company started in the Stanford Industrial Park in 1956. There ,William Shockley, Nobel laureate and co-inventor of the transistor, founded Shockley Semiconductor. Dissatisfied employees then left to found Fairchild Semiconductor. Over two decades, at least 65 new technology companies sprang from a single seed.

Innovation in Health Care Delivery

The early days of American aviation were characterized by a free-for-all that killed many a pilot. In four years beginning in the spring of 1917, somewhere between 30,000 and 40,000 fliers were killed or incapacitated.

On Oct. 30, 1935, two Army pilots took off from Wright Field in Dayton, Ohio, to test the Boeing Model 299. The future of the Boeing Co. depended on a successful performance. After an uneventful taxi and takeoff followed by a smooth climb, the plane suddenly stalled, turned on one wing, and then fell to earth, bursting into flames on impact. Newspapers called the 299 "too much plane for one man to fly." An investigation found that the pilot forgot to release the elevator lock before takeoff. The Army made it clear that any further mishaps would end a contract for the 299.

Boeing needed a way of being sure that everything was done, that nothing was overlooked. Introduction of a checklist provided the breakthrough. In fact, four checklists were developed: one each for takeoff, flight, pre-landing and post-landing. In the end, the 299 proved not to be "too much plane for one man to fly," but simply too complex for one man's memory.

Eventually, disciplined standardization reduced the fatalities and made flying safer than driving. My father is a pilot, and I grew up under the wings of a variety of planes. The planes changed, but one thing didn't. My dad always had a clipboard with a checklist on it. Before, during and after every flight, he would move methodically through that checklist.

In 2009, Harvard physician Atul Gawande, M.D., published a bestseller, The Checklist Manifesto. He as well as Peter Pronovost, M.D., at Johns Hopkins, reacting to the continuing, almost mindless, accidents killing patients, put forth the argument that medicine should begin to adopt the checklist as a safety tool. They both reached out to aviation to validate and inform the idea.

Gawande describes application of a 19-point checklist with eight hospitals beginning in 2008. Without spending any additional dollars, the hospitals saw postsurgical complications drop by 36 percent in six months and deaths fall by 47 percent. At Johns Hopkins, a checklist for the intensive care unit reduced central line infections from 11 percent to zero. Pronovost calculated that in the two years since it was put in place, 43 infections had been prevented, eight deaths avoided and approximately $2 million in savings generated.

There are other innovations in aviation that have begun to creep into health care. Crew Resource Management,sometimes called Cockpit Resource Management or CRM, is a methodical and comprehensive approach to maintaining aircraft safety that arose out of some spectacular tragedies, including one in which the pilot ignored warnings from his crew while he was locked onto a landing gear problem. The plane crashed after running out of fuel.

Key elements of CRM are situational awareness, open communication and teamwork. A checklist is arguably a subset of CRM. Adventist HealthCare, Vanderbilt University Medical Center in Nashville, Tenn., St. Luke's Episcopal Hospital in Houston, and Parkview Health in Fort Wayne, Ind., are among the health systems that are beginning to deploy CRM.

Another innovation that has slowly begun to influence health care delivery is Lean. Lean has as its focus the elimination of waste, or what the Japanese call muda. One of the earliest and best known disciples of Lean in health care is Virginia Mason Hospital and Medical Center in Seattle. It began to embrace the concept after reach-outs to Boeing and Toyota led to an effort to adopt the Toyota Production System. A significant number of hospitals and health systems now are working to deploy Lean.

Integrated information systems have begun to show great promise in supporting innovation in the delivery of health care. Cleveland Clinic's progress in this arena has been so compelling that independent physicians in northern Ohio who once regarded Cleveland Clinic as the evil empire have come to regard the demonstrated utility of its integrated information technology systems as one of the primary reasons to seek employment or affiliation with the clinic.

Reasons for Low‑speed Innovation

What's most notable about innovation in the delivery of health care has been the glacial speed with which it has occurred. A look at the rate of innovation in other industries underscores the lag time in health care:

Checklists have been used as safety tools in aviation since at least 1935. Crew Resource Management is of more recent vintage, but it's been around for at least 35 years. The National Transportation Safety Board recommended that CRM training be required for all airline crews as early as 1979. The Checklist Manifesto wasn't published until 2009.

The Toyota Production System, from which Lean is derived, was in a mature state of deployment at the automaker by 1975. Ohno wrote a book about it in 1988 and the best selling The Machine that Changed the World: The Story of Lean Production, written by James Womack, Daniel Jones and Daniel Roos, was published in 1990. Only in the last decade has Lean stirred much attention in health care.

American Airlines introduced SABRE, its computer reservation system, in 1962. It was described at the time as a technological marvel whose programming surpassed the coding required for NASA's Project Mercury. By the mid-1970s, SABRE had been transformed into much more than a reservation system. It was being used to generate flight plans, track spare parts, schedule crews and enable decision support. Perhaps most importantly, it became a tool for managing the airline's inventory of seats and paved the way for direct online booking by the customer. By comparison, IT systems in health care remain clunky and fragmented with an integrated patient bill still a pipedream.

For decades, most hospitals succeeded in ignoring innovations in health care delivery at Mayo Clinic. Mayo innovations include patient-centered care, the multispecialty group practice, high-performance multispecialty teams, cross-organizational information systems, the integrated medical record and graduate medical education; all were introduced more than 100 years ago. At Mayo and Cleveland Clinic, a still-rare level of integration has been leveraged into unique benefits for patients, including the ability to offer same-day and next-day appointments. During Cosgrove's tenure as CEO, Cleveland Clinic introduced "next-day appointments" and added the "next-day appointment" tagline to much of its advertising, a move that's causing competitors to scramble for a way to respond.

Why has meaningful innovation been so slow to migrate into the delivery of health care?

Inability to recognize an innovation. There is a great deal of ambiguity around defining an innovation. Some tend to describe any improvement as an innovation. Real innovation meets certain criteria:

It works for a living. In other words, real innovation generates significant value beyond its cost. "Significant" is a key concept here. Just creating a degree of incremental value isn't innovation. That's improvement. Lots of inventions never become innovations because they don't generate sufficient value. I'd put a Segway in this category. It's a creative way to move people about. And in some situations, it's carved out a niche. I've seen airport police happily navigating their way through travelers; but it remains stuck – more curiosity than innovation.

It's disruptive. A large-scale innovation upsets the apple cart for others in the same competitive space usually by emerging someplace off the radar screen, often at a low price point, and then slowly gaining market penetration and legitimacy. The response of the disrupted can often become quite desperate and manifest itself in legal and regulatory battles waged on behalf of the status quo.

It's truly different compared to other options. A Roomba vacuum cleaner doesn't look at all like your mother's Eureka. And a da Vinci robot looks significantly different from a surgical team huddled around a patient on an operating table.

It isn't commonplace. A desktop computer certainly represented an innovation in 1970. Today it's as ubiquitous as a pencil. Perhaps more so. The same is true of the Internet. Telephones, radios and television went through the same transition from innovation to mundane as they gained widespread application.

Corruption of the basic concept. Advocates of Lean will often quickly tell you it is based on the Toyota Production System. They are only partly correct on this. What Lean really represents is just one part of TPS, arguably the easiest and least important part. The system rests on three legs — muda, muri and mura. The legs are interconnected, and pulling out one leg makes for a very tippy stool.

Muda describes the disciplined removal of waste and has gotten all the attention in the Lean movement. But it is mura that describes the elimination of inconsistency. It is inconsistency that lies at the root of many of health care's most intractable challenges related to quality and safety. It was inconsistency that W. Edwards Deming was attacking when he encouraged manufacturers to drive out variation.

Muri describes overburden. It is muri that stacks patients up for hours in the emergency room waiting for a bed.

Most importantly, TPS is not a collection of methods; it is a philosophy with well-articulated guiding principles. Rather than adopt and deploy TPS philosophy whole, practitioners of Lean in health care and in other industries have ended up with spotty impacts vulnerable to being enveloped by the organization's old ways of doing things.

Intangibility. The delivery of health care resides in the service sector. As such, it has limited tangibility, unlike a hard-edged product that has a tactile presence like a hammer or a bottle of Coke. All innovations, be they tangible or intangible, arise from a process. A manufacturing process generates an automobile. And it is also process that gives rise to a service like the delivery of care. The important difference is that most service processes are composed predominantly of human interaction. So, innovation in the delivery of health care must invariably focus on transforming the chain of human interaction that generates value. Redesigning processes for large-scale innovation in a complex web composed of interrelated human interaction is a much more difficult task than redesigning a hammer.

Lack of unified leadership. There are significant similarities between hospitals and airlines. Both are simultaneously capital-intensive and people-intensive, for example. On the other hand, there are significant differences, most notably the fact that airline pilots are all employees. They are responsive to central authority and industry standards. Today, at least 50 percent of practicing physicians are still independent small businesspeople who use a hospital to varying degrees as their workshop. Even among those physicians who are employed, the degree of independence they exhibit is several times higher than that of the average airline pilot.

Further complicating the challenge of leadership is the degree of subspecialization that characterizes health care as well as the dizzying variety of technologies. Airline pilots display only a limited degree of subspecialization and are able, with some additional training and experience, to migrate from one kind of aircraft to another. As the result of a culture of independence and complexity, however, there's only a limited degree of unified authority in place in most hospitals today. That makes it hard to provide the focused and persistent leadership needed to steer an idea from concept to large-scale innovation.

An operations mentality. Operations and finance, in that order, still sit at the top of the management pyramid in hospital administration. Operations, by its nature, emphasizes running the existing machinery at as high a level of performance as possible. It tends not to encourage thinking about redesigning the engine. And financial performance is a result, not a cause. Innovation is not a cultural attribute nurtured and celebrated in most health care organizations. And most practicing physicians seldom have time to reinvent the way things get done. Keeping the nose to the grindstone makes it hard to see opportunities to do important things differently.

Insufficient incentive and indifference. There is a tendency to ignore what's going on outside the organization when margins are relatively healthy, even when the red flags are beginning to pop up. And many an executive has mistaken good fortune and momentum from the past for personal accomplishment. Despite handwringing about competition, American hospitals have been one of the few business enterprises in the world that has been able to set prices without regard to the realities of supply and demand. That's changing.

Historically, there has been insufficient pressure for innovation in the delivery of health care. Given this, perhaps it's understandable that hospitals and physicians have been slow to innovate. Why do things differently if you can generate a decent margin or make a good living by just keeping the existing machine well oiled?

Innovation, like all change, involves a degree of risk. It chews up time. During the start-up phase, it often entails a short-term downturn in productivity and margins before the benefits begin to trickle in. Eventually, however, some innovations will deliver a surging flow of advantage that leaves competitors in the backwash.

Ambiguity related to focusing innovation. Peter Drucker once suggested that great leaders ask questions. The right questions. Most hospitals and health systems spend little time identifying the big questions related to their current reality, let alone their future reality. Important innovations answer an organization's most important questions and address its most important challenges.

The Mayo Clinic's Center for Innovation has a well-defined focus for innovation derived from the clinic's strategic plan summarized as "Here, There and Everywhere" and based on three "platforms":

• Practice redesign to reduce costs;
• Community health transformation to create scalable models based on Triple Aim goals;
• Cure-at-a-Distance to extend specialty care to "remote" sites.

Cleveland Clinic operates an online Medical Innovation Pavilion through which it issues focused challenges to its staff to generate their suggestions as to innovative ways to address those important challenges.

Failing to develop and leverage existing innovations. Leaders at Boeing have suggested that the company already had the essence of Lean in place as early as World War II. To move its B-17s into combat, the company went from prototype design to test flight in 12 months. At peak production, it was producing 15 B-17s a day. During the war, half the workforce comprised women who came to manufacturing with "fresh eyes." And factories were so jammed that there was no room for inventory to pile up. Things needed to move in and out quickly – "just in time." And to produce that many aircraft per day, things had to flow continuously. After the war, the urgency ebbed out and waste ebbed in.

Waste, inconsistency and inefficiency came to afflict a wide swath of American manufacturers. Faced with disinterest at home, Deming took his insights to Japan. Forty years later, those lessons were rediscovered by American companies besieged by seemingly invincible Japanese competitors. In 1995, Boeing began adopting the Toyota Production System. The system emphasized many things Boeing had failed to build on from the 1940s.

America's highest-performing urgent care centers and surgicenters are not run by hospitals. They're run by physician entrepreneurs. In a Nov. 7 H&HN Daily article, Thomas Blasco, M.D., made some compelling observations about an overlooked opportunity for innovation:

"Hospital leaders typically see surgeon-owned ambulatory surgery centers as a competitive threat. But if you focus only on market rivalry, you will miss a valuable point: ASCs prove that surgeons can take a responsible approach to managing a surgical services organization. … This time-tested model of surgeon leadership is the kind that hospital operating rooms now need. The good news is that hospitals can replicate much of the ASC dynamic. The key is to let surgeons take on a much more active role in managing the OR through a surgical services executive committee."

Inadequate resources and structure. You'll rarely find anyone in a hospital whose job is "innovation." There are few research and development departments focused to the delivery of health care. And saying that innovation is everyone's job is just another way of saying it's nobody's job. Mayo and Cleveland Clinic are exceptions.

Mayo has dedicated significant resources to its Center for Innovation (previously called SPARC (See, Plan, Act, Refine, Communicate). Mayo's industrial engineers, physicians and managers observe patient behavior and rapidly deploy ideas to see how they play out in practice. Those that work are adopted. The Center uses thinking obtained through reach-outs to many other industries. It draws heavily from the models applied by the consulting firm IDEO. The Center employs more than 50 full-time staff, the core of which have been recruited from schools of design and design firms.

Since 2000, the Cleveland Clinic Innovations venture has enabled the start up of 66 companies attracting $750 million in equity and generating 2,200 patent applications. Cleveland Clinic served as the catalyst for the construction of the 235,000 square foot Global Center for Health Innovation in Cleveland. As of October 2013, 23 tenants had signed up to showcase innovations in health care.

Everyone Can Reach Out

Of course, most hospitals don't have the depth of resources and experience that can be found at Mayo and Cleveland Clinic. But every hospital can identify its big questions and deputize employees and physicians to reach out for innovative answers. Hospitals can also amortize the cost of innovation by collaborating with one another in focused fashion. And there are reach-outs that still are likely to provide high potential payoffs. Three I think should be at the top of the list are:

World-class dealer networks. If you consider physicians as a dealer network, it opens up some interesting opportunities for innovation. Caterpillar is recognized as having one of the world's most formidable dealer networks.

Farmers' cooperatives. Some of the strongest brand differentiation has been developed by cooperatives of otherwise independent farmers who, by agreeing to be exceedingly tight about some things, have been able to remain independent on others. Ocean Spray and Sunkist represent successful farmers' cooperatives, but there are many, many others.

Manufacturers. Most auto manufacturers as well as manufacturers in other industries offer free tours. The Ford truck factory tour in Detroit is a standout. And many hospital board members are associated with manufacturing companies. It's rare that such a visit doesn't generate an idea or two.

Hospitals and health systems interested in meaningful innovation will need to leave their comfort zone and reach out.

Dan Beckham is the president of The Beckham Co., a strategic consulting firm based in Bluffton, S.C. He is also a regular contributor to H&HN Daily.