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Why is innovation in healthcare so slow? Here are the reasons:

Jun 30

5 min read

Healthcare innovation can completely transform patient care, boost population health, and lower costs. However, several obstacles make implementing and adopting new technologies and processes difficult.

This article explores the complexities of creating change in the healthcare space, along with practical ways to cut through to success. Hopefully, these insights will help motivated healthcare professionals persevere in promoting constructive change within the sector.

What does innovation in healthcare look like?

Healthcare innovations are categorized as social innovations because they aim to solve societal issues. According to the World Health Organization (WHO), health innovation enhances healthcare's productivity, efficiency, dependability, sustainability, security, and cost. Healthcare innovation typically includes developments that lead to better medical procedures and patient experiences, with the ultimate goal of increasing people's capacity to meet public and individual healthcare demands. Such breakthroughs include new and improved healthcare procedures, processes, commodities, solutions, distribution channels, regulations, strategies, or products.

Innovation in healthcare can open up flexible options and upgrades to the entire healthcare framework, resulting in better access to medication, health assessments, awareness, prevention, and advocacy.

Why is innovation hard in healthcare?

The healthcare sector faces several obstacles to innovation. The complex regulatory environment in which healthcare operates can be a major impediment. Organizations operating in the health space are subject to a wide range of laws, regulations, and compliance requirements enacted to protect patient safety, but which often slow the pace of change in the industry, for better and for worse.

Regulatory landscape

Securing approval to roll-out a healthcare innovation can take time due to the highly regulated nature of the health sector. Compounding the complexity of navigating these challenges is the fact that legal requirements differ across regions and on the type of product an innovator plans to introduce to the market. The health and wellness regulatory environment is known for its resistance to change, stringent requirements, lack of predictability, limited flexibility, and its inconsistency across international markets.

To overcome these regulatory barriers and promote healthcare innovation, it's crucial to be proactive, collaborate with regulatory agencies, and remain focused on patient outcomes. With persistence and dedication, innovative ideas can reach the market and ultimately improve health outcomes for users.

Financial considerations

Financial factors can also hinder innovation in healthcare. Due to the complexity of the healthcare system and the various stakeholders involved, change-making technologies can become bogged down by a web of competing financial interests. Providers, insurers, and pharmaceutical companies have different goals that can sometimes clash. For example, a new technology or treatment that benefits patients may not be financially feasible for providers or insurers, creating a barrier to its adoption. Additionally, simply affording the legal guidance required to navigate the healthcare space’s regulatory complexities (see above) can cause good innovations to burn through their financial runway before getting off the ground.

There are a number of routes for health tech innovators to secure funding. These can include traditional investment models such as venture capital or private equity, but alternative financing models, such as crowdfunding or social impact bonds, may also be considered.

Another possible solution is cost reduction, which could be achieved by optimizing processes, reducing waste, and utilizing technology to create efficiencies. Collaboration with other organizations can also provide access to funding, expertise, and networks that can help bring healthcare innovations to fruition.

Two men in suits and a woman in a dress and coat standing in a group looking frustrated.

Siloes and hierarchical structures

As in other industries, siloed departments and hierarchical structures (especially in larger companies) can impede healthcare innovation. Gaining support and funding for potentially game-changing ideas can be difficult when innovators are disconnected from company leaders. On the other hand, involving business leaders too early in the process can stifle creativity and prevent ideas from fully developing.

Bringing innovators and leaders together is critical to closing the knowledge gap, and to ensuring that ideas are effective for patients and sustainable for the business. Failure to bridge this disconnect can result in decision-makers being unwilling to invest in innovative solutions, as well as slowing the organization’s adoption of newly approved processes and technologies.

Solving these problems may entail forming cross-functional teams and investing in training programs. Furthermore, fostering an innovative culture and involving external partners can facilitate seamless collaboration between innovators and company leaders, resulting in more and more successful healthcare innovation.

Data privacy and security

The sensitive nature of healthcare data raises concerns about privacy and security, which can make it challenging for innovators to access data required for developing new technologies and treatments. The growing incidence of data breaches and cyber attacks in healthcare systems has rightly raised concerns about putting patient data at risk. Furthermore, clearing a new technology in the face of stringent regulations can be difficult and costly.

Therefore, any aspiring health tech innovator must implement a robust data safety and privacy system to proactively address security concerns. This system should adopt a risk-based approach to privacy, considering the potential impact of a data breach or cyber attack. Collaborating with regulatory bodies to stay up-to-date on the latest regulations and ensure compliance is also essential.

By taking these steps, healthcare innovators can mitigate the risks associated with data privacy and security concerns while pursuing innovation and advancements in the field.

Pile of stuffed folders on desk with lamp and old typewriter in background.

Legacy systems

The healthcare industry heavily relies on obsolete legacy systems to perform critical tasks. The use of legacy medical devices is concerning because they are difficult to patch, especially given their portability. Furthermore, organizations may hesitate to update these devices due to potential security risks, even if they perform critical services.

One significant barrier to innovating legacy systems is that these dated programs often perform extremely important work, so the stakes of keeping them going are high. For example, a specific application may save the lives of infants, it is unknown whether it will work with the most recent version of Windows. As a result, there is considerable reluctance to take significant steps toward modernizing these systems, causing them to fall more and more behind in their ability to protect data and function efficiently.

To address these issues, healthcare organizations should implement robust digital transformation strategies, adopt cloud-based solutions, provide staff training and development, and collaborate with technology agencies to create innovative solutions.

Key takeaways

The main barriers to innovation in healthcare are the sector’s complex regulatory environment, the need for significant and sustained funding, disconnect across departments when implementing innovation, data privacy and security concerns, and the prevalence of legacy systems.

To overcome these barriers, we suggest strategies such as collaboration between industry and regulators, supporting more updated regulatory processes, diversifying funding, investing in training and development programs, establishing cross-functional teams, implementing robust data safety and privacy systems, adopting cloud-based solutions, and collaborating with technology vendors to create innovative solutions.

While healthcare innovation requires a long-term commitment, proactive collaboration and a focus on patient outcomes can lead to breakthrough innovations that benefit everyone involved.


Jana DiSanti

Jana DiSanti leads content strategy for Twenty Ideas. She brings nearly a decade of digital marketing, content creation, user research, and project management expertise to the table to advance the goals of the 20i agency and its clients. She specializes in promoting brands and products focused on improving the health of people, communities, and the planet.

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