A chief strategy officer's view on risk appetite in health care

Kate MacArthur–(Blue Sky Innovation)–With health care systems undergoing sweeping change, providers have struggled to keep up with the influx of technology innovations on their own. Enter Avia, launched out of Chicago-based incubator Abundant Venture Partners. Avia works with its network of hospitals and health systems to find, pilot and scale early stage technologies. Chief strategy officer Leslie Wainwright scouts the market for trends and breakthroughs and tracks what helps and hinders innovation. She explains how the industry is learning how to balance risk in order to innovate.

Q. Is it fair to call you middlemen?

A. On one level, yes, but we do more to align interests. We’ve created innovation cohorts where small groups of provider organizations work through Avia to source and implement the best solutions in as quick of a fashion as possible because that’s the only way provider organizations are going to see and pass value onto the communities they serve. There are so many barriers along that bureaucratic and lengthy process. We’ve placed ourselves in the mix to try to break down as many barriers as possible to get things to market and have an impact.

Q. How do you have an impact?

A. The first and most obvious one is on care through technology solutions, then being able to quantify and see that impact, but also economic impact. Go back 10 years in health care where some provider systems were very early pilot sites. They’re scratching their heads over “How come we didn’t get the economic value when we were earlier adopters?” When we play that middle role, some entrepreneurs are willing to put preferred pricing or performance incentives in place to ensure all who do want to be earlier in bringing new things on board have some aligned incentive as well.

Q. What’s a lesson you’ve learned about corporate innovation?

A. Whether you’re building your own internal programs or working with external entrepreneurs, there are defined time milestones that may or may not be explicitly communicated. Usually when there are tensions (regarding) “we need to see something tomorrow and you’re giving us projects that have a multiyear time horizon,” it’s this mismatched expectation (regarding) when you’re going to show something positive. The solution is much like portfolio management where you try to build a balance to show some returns more quickly but also pepper in some things that have a longer time horizon.

Q. Can you share an example?

A. With UCLA’s health system, its innovation team would go through piloting and get some successful results, and then the discussion would begin whether this was something worth implementing. They decided before they piloted to move that conversation up about “What metrics do we need to achieve, and if we achieve those, do we have the green light to go into implementation?” They figured out what success looked like before they got the sign-off. That saved a lot of time and wasted energy on pilots because they started having those conversations earlier in the process.

Q. Culturally, what leads innovation most?

A. Risk appetite. In health care (which includes technology-enabled solutions involving care providers, care teams, care coordination and more), it’s pretty low. It’s not uncommon to hear in the same sentence, “We want to be innovative but we don’t tolerate failure.” In the survey work we’ve done with Health Information Management Systems Society (HIMSS), the chance of failure around innovation that organizations are willing to tolerate ranges between 10 percent and 20 percent. We’d like to see that move up into the 33-percent range. We find organizations that have been very successful have healthy levels of tolerance for learning along the way and not expecting everything to be a home run.