Amassing Troops on the Inside
When Aaron Martin moved his career from consumer technology to health care in 2014, his new bosses asked for his perspective: “How would a disrupter come after our basic business?”
“It’s pretty straightforward,” he told them. “They would develop a relationship with the customers that will be most important to you in the future.”
Martin, senior vice president of strategy and innovation at Providence Health & Services, is responsible for doing just that. His job: to reposition Providence — the nation’s third-largest nonprofit health system with 34 hospitals in five states — to thrive in the consumer revolution.
Previously, Martin worked at Amazon, where he led the team that helped traditional publishers go digital by making their books available on Kindle. Now, he is in charge of three new teams at Providence.
A consumer innovation group headed by another former Amazon executive “Its goal is to develop relationships with our key customers between episodes of care — when they are at home and when they are healthy — because we want to be in the health business and not retreat to the sick business,” Martin says.
One high-priority customer group is the 28- to 35-year-old female who is just starting a family — and who will make all the health care decisions for that family for years to come. In a bid to provide the services she needs to keep her family healthy, Providence is developing strategies in three areas: Moms and Babies, which focuses on pregnancy, delivery and infant care; Chronic Conditions, which helps families to sidestep type 2 diabetes and other lifestyle-associated medical problems; and Aging in Place, which helps elders remain independent, reducing the caregiving burden of the women on whom they rely for support.
The consumer innovation group is incubating new ideas outside the purview of the traditional health care paradigm.
“The idea is that once we get these off the ground, we will find a management team to start businesses around them,” Martin says. “Or, if an idea doesn’t make sense as a stand-alone business, we could get one of the teams already operating within the system to run the startup.”
Providence Ventures, which makes direct investments in emerging companies “To really make innovation happen at a big health system, the first thing that we had to do was figure out a way of getting early-stage companies to come work on the problems that we care about,” Martin says.
Providence offers promising companies an opportunity to pilot their technology within the health system, which gives the startup and the health system a chance to evaluate one another. When a good fit is found, the health system may license the company’s software or Providence Ventures invests in the company itself.
One investment went to Sqord, a maker of a wearable activity tracker and social media app designed to encourage children to be more active. A yearlong pilot found that fifth-graders who wore the Sqord PowerPod increased activity by 12 to 13 percent in contrast to national statistics that predict a decrease in activity beginning at that age. Thus, Sqord supports Providence’s consumer innovation strategy of helping moms to prevent type 2 diabetes in their children.
Another investment went to Binary Fountain, which captures patient feedback from surveys, online ratings and review sites, social media and other sources in real-time, allowing health care organizations — Providence, for example — to know what their consumers think, and work to improve their experience.
A digital innovation group of software development engineers “We can’t innovate purely by just optimizing the software that we have licensed,” Martin says. “This gives us flexibility to integrate with those early-stage companies as well as to build our own technologies that will accelerate us in different directions if we decide we want to innovate in a specific area.”
Process and product innovation does not typically spring from health care organizations, which are known to be slow to adopt new ideas. Speaking at an American Hospital Association webinar earlier this year, Providence CEO Rod Hochman, M.D., said he is recruiting from Amazon, Microsoft and consumer-oriented companies to bring new ways of thinking to the organization.
“You have to disrupt your own business to be successful,” he said. “If you stand there, you will get run over. It’s guaranteed. It’s just a matter of when that’s going to happen to you.” — Lola Butcher •
