Hearst is best known as a media conglomerate but the nearly 130-year-old company has long been an innovator across many industry sectors. One of the latest ventures is Hearst Health and the Hearst Innovation Lab. The organization thrives on the innovative, start-up culture of the San Francisco Bay area as well as the breadth of the parent corporation’s network of customers and companies.
The Hearst Health brand was introduced at the beginning of 2014, about one year after the launch of the Hearst Health Innovation Lab which Justin Graham, MD, heads as the chief innovation officer.
The lab has a mission to improve the patient journey to the healthcare system and achieves this through product concept prototyping and market evaluation with Hearst Health companies as well as external companies, entrepreneurs and inventors, says Graham. “We’re taking the best ideas and doing rapid cycle prototyping and market testing.”
A good setting
The San Francisco Bay area is a good setting for the effort, he says. “It’s the innovation center of the universe. You can’t drive down the highway without seeing 15 new start-ups going up. Virtually everybody works in some way in the start-up economy. There’s an incredible flow of ideas and talent and capital.”
The combination of the area’s innovative culture—Graham says it’s not unusual to walk down the street and see people wearing Google Glass or another high-tech device—with the field of medicine is a good mix. Providers of imaging, pharmaceuticals and surgical and cardiac devices that have had a profound effect on diagnosis and disease “have been incredibly innovative and rapid but digital health and IT haven’t been as fast to innovate in no small part because it’s very challenging to design tools that are congruent with clinical workflow and provide high value to both providers and patients. The U.S. healthcare payment system has rewarded more costly and less efficient care rather than the opposite. We’re seeing changes but it’s slow.”
Graham and the innovation lab, he says, also enjoy the vast resources of the Hearst corporation. “We are very fortunate to be working in the Hearst Health ecosystem. Hearst is a venerable and very successful company in many industries” and diversified into healthcare 20 to 30 years ago with an initial foray with First Databank.
More acquisitions led to a dynamic set of strong health IT companies, he says. With that network of partners, Graham’s team can work with entrepreneurs who have a great idea but “don’t have the bandwidth” to get started.
Through the pipeline
The innovation lab uses a “structured process in our approach on how we take ideas through the pipeline,” he says. Ideas come from many sources and then the team does feasibility testing on the cream of the crop. The team submits business models for those with the most potential and those approved by Hearst leadership go into the development phase.
“We take a lot from the innovative and start-up culture of the Bay area,” Graham says, likening the lab’s process to applying for seed funding. The team creates beta software and then moves to more customer involvement. They also consider whether they have an organization committed to working with them and potential customers.
“It’s a very structured approach with gates at each point that let us determine if we’re on track. That has allowed us to test ideas early and fail out ideas that aren’t going to work. We love the idea of failing fast when we find out something is not going to succeed early in the process. We try to failure test as many ideas as possible.”
But, “when we find an idea we’re going to commit to, we double down on it and focus on it for the duration as opposed to keeping 10 balls in the air. Multitasking has its place but you’re never going to be as effective unless you focus intently on one thing at a time.”
The Hearst lab’s process includes lots of prototyping and making use of their extensive customer network, Graham adds.
There have been cases where they home in on a great idea, do research but then find that a dozen other companies are doing this already. “We make the decision not to play in that competitive space. Maybe it’s something where we could do it better but, at the end of the day, we’re less interested in getting into a big race. We’d rather find something no one else is working on.”
Graham says he also has experienced getting a lot of positive feedback about an idea but then learning that it’s not necessarily something people are willing to pay for. “We need commercial products that have a future. If it’s not a game-changer, then we may put it aside. Some ideas just are not ready for prime time.”
Each effort is a little bit different, he says, which works well with the Hearst idea of “a network of companies with individual identities and cultures. It’s very easy to embrace the concept that the lab can be a start-up with its own set of rules and culture. We have an extreme amount of freedom and flexibility.”
That has allowed them to ramp up a development team and subject matter experts, seek additional funding internally and move very quickly without a lot of bureaucracy. Or, “without being held back by a stagnant culture,” Graham adds. In one case, they might build a business unit around a new commercial software product. In another, they might hand a product off to a new unit within one of Hearst Health’s existing companies. “We have great commercial teams within our existing teams so we don’t have to build from scratch. We can make use of what’s already there, ramp up quickly and then hand off to teams already in place.”
The lab’s full-time staff consists of a core team of clinicians, business analysts, designers and software architects. “As we get traction and funding of a particular idea from Hearst, then we can ramp up with temporary or permanent staff depending on the concept.”
One of the lab’s first successes was a product called AlertSpace, which is a tool that permits users of First Databank’s decision support tools to customize and control their alerting processes. Customers didn’t know exactly what they wanted but the lab came up with a good prototype and handed it off to First Databank which then incorporated it into its core product. “We are now selling it to a lot of very happy customers.”
Embracing competition, collaboration
Rather than worrying about competition from the increasing number of provider organizations launching innovation centers and the huge tech companies such as Apple, Google and Microsoft moving into healthcare, Graham says he welcomes the company. “We love that Apple is moving into the healthcare space. Look at what the iPhone did for the entire IT ecosystem outside of healthcare. From photography to hailing a cab, Apple creates all these ripples that have positive effects and create incredible opportunities for disruptive change.”
Graham says he’s keeping an eye on new technologies because the big question is how to get consumers to engage directly with personal responsibility for their healthcare beyond those who are counting their steps with a Fitbit to those with chronic illness or significant risk for chronic illness. “If Apple can get them excited about doing that, we’re thrilled. It just means more opportunity to positively impact their lives and American healthcare.”
While several well-known healthcare delivery organizations have made their innovations available to others, not every healthcare organization needs to commercialize its innovations, Graham says. “A few of them have figured out that that’s a good business model for them—a way to diversify and create some homegrown tools that might give them a competitive advantage.” Several have become incubators of their own internal technology and “we applaud that. There is so much room for improvement. There are so many areas where we can do better. We need more and more innovation and more and more organizations willing to try new things and spread what they’re doing widely.”
The Hearst lab is interested in collaborating with some of those organizations, however. Graham has been meeting with organizations’ innovation units to learn about their focus and find out whether their innovations can go to a wider audience. If they have a great idea, “I would love to take those ideas and work with them to refine and bring the product into a more commercial environment.”
Looking ahead, Graham says he is very optimistic. “I don’t think there is ever a time when we’re not going to want to be getting a jump start on the future. I like to think there’s a long-term need for it as long as we’re effective and making good use of our resources. We’re always coming up with ways to create new and existing bets on the future.”
Invest in Innovation
“Every organization should always think about how to reinvent itself,” says Justin Graham, MD. With the rapid changes happening in healthcare and technology, “organizations need to have some small investment in thinking about how to change for the future and look to improve. Continuous improvement should be on everybody’s radar at every level.”
Organizations should have a portfolio of innovation across the three horizons of innovation, Graham says:
- Improving what you’re already doing to deliver better care and service and save money.
- Adding to current business, such as an additional service line. This involves doing something similar but better.
- Radical disruptive innovation that’s much more risky.
“There should always be a small amount in that third radical horizon. What could be really disruptive and earth-shattering? Really listen when those signals come back positive. There will be a lot of failures and it will take time but when it does, you have the opportunity to make a game-changing move.”
Even nonprofit providers can and should focus on improvement, Graham says. Find ways to deliver more quality care to more people and “get out ahead of regulatory changes and issues that are making your healthcare system less efficient.”
Improvement strategies will be different for each organization, he says, but “there should be some level of effort in every organization. There are going to be cultural and organizational imperatives that determine how best to implement that.”