The long and winding road towards payment for healthcare innovation with high societal value but limited commercial value: A comparative case study of devices and health information technologies

Abstract

Innovation is widely recognized as an important means of tackling challenges that face healthcare systems. But innovation can only succeed in this role if financial conditions allow innovations with high societal value to be developed and implemented. This study is an in-depth examination of the role of payment mechanisms throughout the innovation process, from the perspective of innovators. We conducted a comparative case study of four innovation projects, two involving medical devices and two involving health information technologies, all of which originated from academic settings. Although financial factors were found to have impeded the progress of innovative products at every step in the innovation process, this effect appears to have been strongest during the implementation phase. The perceived commercial value of an innovative product was a key factor in obtaining sufficient payment. Innovative products with potentially significant societal value but limited commercial value are unlikely to become structurally embedded in practice, or to be scaled up beyond the local level. The study reveals four additional factors that affect progress through the healthcare innovation process: compatibility of the innovation with existing practice, and commitment, competences, and social capital of the innovator. We identify a number of lessons for policy and practice that we believe would increase the likelihood of innovations with potentially significant societal value to achieve widespread implementation. These lessons reflect three key issues identified in our research: 1) shift the focus from commercial value towards societal value; 2) support dissemination of innovations beyond the local level; 3) help innovators to convey their valuable ideas.