Publications
Publications
- March 2018
- Harvard Business Review (website)
Hospital Budget Systems are Holding Back Innovation
By: Robert S. Kaplan, Michael S. Jellinek and Derek A. Haas
Abstract
Nearly 800 digital health startups were funded in 2017, an all-time high. Each of the new companies offers the hope of transforming the performance of the U.S. health care system. The audience for such innovation wants to be receptive: A recent American Hospital Association (AHA) survey found that 75% of senior hospital executives endorsed the importance of digital innovation. Yet, despite their stated enthusiasm, hospitals have been notoriously slow to adopt digital innovations. Explanations include their IT departments already have their hands full installing, maintaining, and upgrading electronic health record (EHR) systems. But much of the blame can be attributed to hospitals’ misaligned budgeting and incentive systems. The authors have identified how hospitals’ budgeting systems have erected three distinct barriers to the adoption of technology. These barriers, however, can be overcome by changing how hospitals acquire new technology and by providing incentives to units to use digital innovations to provide more effective and efficient care.
Citation
Kaplan, Robert S., Michael S. Jellinek, and Derek A. Haas. "Hospital Budget Systems are Holding Back Innovation." Special Issue on HBR Insight Center: Health Care's New Frontier. Harvard Business Review (website) (March 2018).