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Peter Kung: UCLA Health Will Be an Incubator of Healthcare Innovation

August 24, 2014
by Mark Hagland
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What does it mean to actually link strategy, innovation, and execution? The folks at UCLA Health are aiming to bring together patient care innovation, medical research, and technology and IT development, in an “incubator” of innovation

What does it mean to actually link strategy, innovation, and execution? The folks at UCLA Health—the four-hospital, 150-clinic integrated health system based around facilities at the University of California Los Angeles—believe it means bringing together patient care innovation, medical research, and technology and information technology development, in a combined effort with a vision of the future.

That’s what Peter Kung, director, strategic technologies at UCLA Health, told his audience on Aug. 19, in a keynote presentation entitled “Linking Strategy, Innovation, and Execution.” Kung spoke as part of the Health IT Summit in Seattle, sponsored by the Institute for Health Technology Transformation, or iHT2. (Since December 2013, Healthcare Informatics has been in partnership with iHT2 through HCI’s parent company, the Vendome Group, LLC.)

Peter Kung at iHT2-Seattle

With four hospitals, more than 150 clinics, 7,800 employees, 3,000 physicians, and a strong market position in Southern California, the leaders at UCLA Health could be content to rest on their laurels and simply continue to provide high-quality care to their patients. Indeed, by most measures, they are currently highly successful, with overall occupancy rates that were at 90 percent in 2012, and are over 100 percent now, with some days actually reaching 110 percent inpatient capacity. But that’s not what UCLA Health is all about, Kung told his audience.

Instead, referencing his organization’s mission and vision statements, Kung shared with his audience a very proactive overall strategy at UCLA Health, one that involves a variety of strategic initiatives and impulses. “Our mission is to deliver leading-edge patient care, research, and education,” he noted. “Our vision is to heal humankind, one patient at a time, by improving health, alleviating suffering and delivering acts of kindness. And, he said, “our values ensure integrity and compassion.”

Put those together along with a commitment to forge new paths in medical research, technology, and other areas, Kung said, and what one gets is a vision of the future in which UCLA Health is actively collaborating with IT vendors and others to develop new approaches to supporting compassionate, coordinated care, in a time of constrained resources and growing policy and regulatory demands on providers.

Or, as Kung put it succinctly, “You can’t raise questions about improving value without having a discussion of cost, any longer, in healthcare. And so what innovation does in this space, and Michael Porter would agree with this,” he added, “is that there are a lot of high-value, lower-cost innovations to look for. But it’s really finding a set of activities that will nurture those innovations, that we’re looking to facilitate. At UCLA, we identify, pilot and deploy high-value innovations that deliver better health and greater value to more people.” In short, he said, “We want to be a value accelerator. And at UCLA, we don’t really mind where innovation comes from; we want to share. We believe that all boats are lifted whenever anyone shares.”

Kung further clarified for his audience that, in his view and that of his colleagues, “Innovation to us is not just an innovation or a product; it is about reaching a new business model or service. We also have to take account of cost now.” As a result, he said, “We opened our arms and asked, where are the high-impact innovations? Importantly,” he said, “an innovation doesn’t have to be new to the world. We can take a lot of things from other industries; I think about banking and ATMs. Innovation is a new way of doing business. We believe that successful innovation requires a disciplined process.”

As a result, Kung and his colleagues have developed what they call an “innovation life cycle.” There are three broad stages to that life cycle, with elements within those stages. The stages are: identify/scan, pilot/design, and deploy/scale.

With regard to identifying and scanning, Kung said, “We’re trying to find high-value innovations that radically reduce cost and improve care outcomes. We’re trying to de-risk the process of trying to find innovations. The UCLA Health Global Lab scans domestic and international markets for high-value innovations,” he added.

The inclusion criteria involved for determining which innovations can be pursued are as follows. First, innovations must provide for utilization-based savings within three years of implementation. Second, they must have been implemented by at least two healthcare organizations or health plans. And third,   the utilization-based savings must be documented. Innovations explicitly excluded are those associated with declines in patient access or patient outcomes.

Kung assured his audience that things are seriously ramping up for expanded facilitation of innovation over the next few years at UCLA Health. And most importantly, he emphasized, “We want to be an incubator for innovation,” across the spectrum of organizations operating within the U.S. healthcare system. Strategic, focused, and pragmatic—those are words that describe what the UCLA Health folks hope to achieve. Only time will tell what results emerge out of all this activity, but Kung emphasized that senior leaders at UCLA Health are determined to leverage their intellectual and other assets to positively impact healthcare innovation in the coming months and years, to the benefit of patients and communities nationwide.