Busting the Myth That Regulations Impede Innovation

Busting the Myth That Regulations Impede Innovation

How to bring creativity, experimentation, and risk into high-stakes industries
Ann Kim
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While COVID-19 has caused worldwide devastation, it has also revealed broken aspects of many critical systems, and raised the urgency of fixing them. In healthcare in particular, we are seeing that entrenched ways of delivering care have left us ill-prepared to respond to a crisis of this magnitude.

Tight regulations have often stymied innovation, but one of the bright spots of this moment is realizing that regulations aren’t the real problem—they are more often a perceived roadblock that shuts down innovative thinking before it grows into real-world solutions. The fact is, regulations should set the baseline for what must be considered, rather than restrict the height of what can be achieved.

Right now, regulations in healthcare are seeing rapid, radical shifts. Processes that have historically taken years—like launching telemedicine platforms and adapting insurance coverage—are now taking weeks or days. Scientists are working to develop vaccines in record time. Companies outside of healthcare are jumping in, too: Manufacturers whose only products included car parts are now making ventilators. 3-D printers are being thrown into service to create PPE. As one client told me, “Every rule that can be broken is being broken. Every regulation that can be waived is being waived.” The world doesn’t have time to wait.

In this moment of crisis, failing systems are confirming what we already knew: The healthcare system is brittle, and it wasn’t built to handle a global pandemic. How leaders move now will dictate the kind of progress we can make, in the short- and long-term.

Here is a guide to innovating within regulations—no matter the industry—at a time when we need it most.

Take a wider view

Healthcare professionals spend so much time putting out the fires immediately in front of them that they have little time or mental space to widen their lens and focus on long-term priorities. Leaders need that time to create a vision of their future—even in times of crisis.

When Dr. Michael R. Jaff, former president of Newton-Wellesley Hospital, a community hospital in the Boston area, started his tenure, he spent the first six months listening to staff all across the organization. “There's a lot of time that has to be spent to really dig through where you are, what challenges you face as an organization, where you want to get to,” he says. “That's got to be clear.” His listening tour informed what would become the vision for his term as president: to compete and win against competitors by delivering the best patient experience. To get there, he had to usher in a new era of innovation at the hospital, and empower those around him to go after radical solutions to entrenched problems.

Related video: How listening to patient voices inspired Newton-Wellesley Hospital to redesign their culture.

Offer pathways & permission to do things differently

In a typical day at a hospital, healthcare workers don’t have the time or mental space to think creatively about new approaches to care delivery. If hospitals want their workforce to embrace and embody the spirit of innovation, employees need not only the permission to think differently, but also the structures and roadmaps that make action possible.

Dr. Jaff understood clearly that for employees who’ve been acculturated to a certain way of working, it’s not sufficient to simply say they can approach things differently, or that the organization wants to move in a new direction. “You have to design what it is that you're trying to do,” says Jaff, “You have to empower people to believe that in fact, it's a key goal of the organization. You have to permit them to try and fail and try again all within boundaries.”

Jaff and his leadership team worked with IDEO to set up multiple nodes for learning and prototyping. The program they created focused on delivering a better patient experience. It began with a pilot project in the Women’s Imaging Center and then a deeper engagement with the Outpatient Surgery Center. As part of an executive education program, another set of internal teams learned to identify user needs, like an improved discharge experience; and to develop prototypes to help address those needs. Ultimately, staff were empowered by taking their ideas from concept to real-world testing and implementation.

Jaff also made his commitment to innovation clear with a designated lab space in the hospital’s old coffee shop, a much-coveted location along the main hallway. Dubbed the Department of Tomorrow, it offered a standing invitation to all employees to stop by and learn more about all the work happening across the hospital. The stories from this work became a kind of currency: Leadership shared big and small examples of change in meetings, at events, and in conversation, as evidence of Newton-Wellesley’s evolution.

No one’s clinical or administrative workloads were decreased to make this work possible. Managers scheduled shifts and breaks differently to allow teams time for focused collaboration. Everyone taking part knew that failure—something that usually has dire consequences in healthcare—was a form of learning in this context. They were driven by the chance to make change.

Seek new perspectives

In healthcare, where expertise is celebrated, seeing the medical experience through a patient’s eyes can be hard.

Long before teaming up with IDEO, the imaging department at Newton-Wellesley had a reputation for being patient-centered and achieving consistently-high industry survey scores. It would have been easy to assume that everyone on the team really understood what patients go through when they get mammograms—the fear, the discomfort, the worry over getting a life-altering cancer diagnosis. But it wasn’t always clear. To deepen empathy for the patient experience, the IDEO team designed an exercise for the care providers that evoked anxiety and uncertainty. They brought in a tarot card reader and, like patients awaiting news in a waiting room, members of the imaging team had their fortunes read, many for the first time. They felt the discomfort, uncertainty and vulnerability of receiving a verdict on their lives from a person they didn’t know well. Though it was a staged experience that doesn’t directly compare to the patient experience, it generated a deeper understanding of the dynamics at play and how they could be improved.

To help the Newton-Wellesley Hospital day surgery team see their work from a new angle, the IDEO team led them on an expedition to the JetBlue terminal of Boston Logan Airport. Similar to a surgical team, where diverse team members all connect with patients asynchronously, the staff of an airline provide continuous customer service for passengers, from ticket purchase to check-in to security to boarding to flight. This sequence of interactions comprises the overall experience of the traveler. In both circumstances, a human is at the center. By viewing the analogous process in a different industry, it was possible to return to thinking about healthcare delivery with fresh eyes.

Allow discomfort to be part of the process

No matter the industry, it can be highly uncomfortable to do things differently, even when everyone is aligned on the ultimate goal of innovating and creating change. So much of healthcare is about following protocol. Billing. Process improvement. Hierarchy in healthcare adds to that discomfort. Often, there are big divides between roles and status, and people are more often judged on their mistakes, rather than their successes. Can department chiefs and front desk receptionists work as peers on a team? Can we prototype a new service experience with real patients going in for surgery?

Leaders who want to affect change need to explicitly acknowledge and address that discomfort. An example from another industry: Three years ago, Bowdoin College teamed up with IDEO to rethink its admissions process. Much like healthcare, college admissions abide by certain regulations as well as administrative policies. How colleges read and assess applications may be unique to each institution, but they are driven by stringent protocols and standards. Bowdoin admissions officers conducted very thorough and thoughtful readings of each application. But that thoroughness led to redundancy and sometimes delayed final decisions. At the same time, the idea of changing the process made the admissions officers fear they would compromise what they valued most: giving each hopeful applicant full consideration they deserve. To interrogate different methods, the team implemented highly-structured A/B testing of different ways of reading applications. The result? The team discovered that they could make decisions earlier in the process and still come up with the same results. The testing gave the team confidence, and ultimately changed their long-held beliefs of how applications “should” be read.

Given that A/B testing proved that some variables had little effect on the team’s final admissions decisions, IDEO redesigned the reading process and included a system called “magic sort,” which helps parse groups of applications based on a new set of counselor assessments to route each to its next round of reviews more efficiently.

In healthcare, as in many tightly regulated industries, expertise is held sacred, which means nobody wants to feel like—or appear as if—they don’t know how to arrive at a solution. But the purpose of using design to solve problems is to allow uncertainty and open questions to drive new thinking. The point is to explore possibilities through prototyping and learning.

Use regulations as a springboard for innovation

Working in highly-regulated environments can put a damper on creative thinking. However, regulatory change, especially in healthcare, is providing new opportunities for innovation. Revised reimbursement policies are enabling telemedicine to grow. The reduction of certain HIPAA guidelines temporarily offers some flexibility in care delivery. And permitting doctors to practice medicine beyond the state where they are licensed enables more care in disease hotspots.

Still, these regulatory shifts alone don’t create innovation. They are a starting point, often enforced through compliance or penalty. Innovation is about delivering beyond this baseline and aiming for what is aspirational. Changes in healthcare delivery, for instance, enable us to ask the question of how best to deliver patient-centered care through video chat.

Even in the business of regulation itself, there is room for innovation. When the US Congress set up the Consumer Financial Protection Bureau (CFPB) in the wake of the 2008 financial crisis, they established a system for taking complaints from consumers who had been scammed and were seeking resolution. The CFPB also took on a financial education mission: to make people smarter about their finances. But rather than structure the agency in a traditional way, by siloing complaints, financial education, and industry regulation, the CFPB’s collaboration with IDEO pointed in another direction: that these three domains can work together in useful harmony. By thinking of them holistically, the agency could be more effective than its predecessors in serving the public. For instance, by pairing financial education and regulation, the agency was able to create new loan disclosure requirements that make the terms more clear and understandable. The CFPB’s complaint data helped the agency prioritize areas to investigate; a spike in the number of people complaining about improperly-opened accounts at Wells Fargo Bank led to a discovery of widespread fraudulent practices. The agency eventually ended up blowing the whistle on the bank, leading to the largest fine in the history of financial services.

When it comes to innovation, having the right mindset is more important than the process: the mindset is what leads to new ideas, resilient responses, and openness to trying things differently, even at the risk of failure. People drive change. For Newton-Wellesley Hospital, according to their Chief Quality & Experience Officer, Dr. Jodi Larson, it was this change that helped employees go “from being idea generators to being change-makers. That was a big deal for us.”

And this has translated in their response to COVID: Within 24 hours, testing tents were procured and set up; workflows were designed and integrated into their electronic medical record system; PPE protocols were established. “Everyone jumped in with great ideas," says Larson. "The valets, nurses, docs, food services. It’s created a new bond and trust among colleagues. People are working in areas they’ve never worked in, and working in parts of the hospital they never had before. Different minds are coming together.” COVID has accelerated the change that was already underway. “We are making decisions and making things work that we never had the courage to attempt before. This is who we are now.”

Illustrations by Lisk Feng

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Ann Kim
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