Value, Innovation, and Radiology

WASHINGTON, D.C. – May 18, 2016: The American College of Radiology invited Adam C. Powell, Ph.D. to discuss the relationship between value, innovation, and radiology as a part of a broader panel of lectures on markets, value, and commoditization. During the lecture, Dr. Powell discussed the answers to five questions:

• What is healthcare innovation?
• What is value?
• How does healthcare innovation impact value?
• How do we search for value?
• How do quality measures impact the search for value?

In summary, the answers to the questions were as follows.

What is healthcare innovation?

Healthcare innovation is “Something new, or perceived new by the population experiencing the innovation, that has the potential to drive change and redefine healthcare’s economic and/or social potential.” (Weberg D. Innovation in healthcare: a concept analysis.   Nurs Adm Q. 2009;33(3):227-37.)

What is value?

Value is outcomes / cost

How does healthcare innovation impact value?

New technologies may shift the production possibilities frontier. In doing so, they may be superior to prior technologies on multiple dimensions. Our feelings about value are relative and context-based. The adoption of innovations by others may change our beliefs about what constitutes value.

How do we search for value?

We explore options until we feel we find one which we feel provides sufficient value. We perform a bounded search, in that we do not consider every option in the universe of options, as doing so would likely be too costly. Instead, we search until we find something which seems good enough. This form of search (bounded rationality) was proposed by Cyert and March (1963).

How do quality measures impact the search for value?

Quality measures facilitate social comparisons and comparisons between present and past performance. Both forms of comparisons have the potential to increase aspirations. As the gap between present performance and aspired performance increases, satisfaction declines. Decreased satisfaction leads to the search for new solutions with the potential to boost performance. This can lead to the adoption of innovations.