INTRO COMMENTS: Hello and welcome to Modern Healthcare’s Next Up, the podcast for emerging healthcare leaders. My name is Kadesha Smith. I’m your host, and I’m also the CEO of CareContent, a digital strategy agency for healthcare organizations.
Today, we are talking about disruption and innovation in healthcare.
I think 2020 forced everyone in healthcare to do something new. Often without the luxury of planning and testing, we just did stuff.
Between advancements in technology, a shift to value-based care, and the rise of consumerism, we have seen dramatic shifts in the healthcare industry in just the past few years. And then the COVID-19 pandemic certainly pushed innovation even further. Now, many of our healthcare teams are planning for 2021 and beyond.
Hospital and health system CEOs have called the industry “ripe” for disruption, and innovation is key. But how do you innovate with regulations and an organizational culture that may not be ready for the dramatic shifts that it needs?
Today, we are speaking with Carter Dredge, who is the Senior Vice President and Chief Transformation Officer at SSM Health — a Catholic, not-for-profit health system that serves communities across Illinois, Missouri, Oklahoma, and Wisconsin. Before that, he served as Assistant Vice President and Administrator for Home Care Services at Intermountain Healthcare. And before that, he was Intermountain’s Director of Healthcare Transformation.
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MODERN HEALTHCARE: Now, let’s dive into our conversation with Carter Dredge of SSM Health.
MODERN HEALTHCARE: Hello, Carter Dredge. How are you doing?
CARTER DREDGE: I’m doing wonderful, Kadesha. It’s a pleasure to be with you.
MODERN HEALTHCARE: Likewise. So we’re going to talk about innovation, a topic that we know you’re very passionate about. Before we start our discussion, I just want to give a lay of the land through some data points.
First, innovation is becoming increasingly important to hospitals. In a 2018 Modern Healthcare report of 75 top hospital CEOs, almost 65% have an executive in charge of innovation — just specifically in charge of innovation. Another 2018 Modern Healthcare article reports that the American College of Healthcare Executives surveyed their clients about competencies they look for in leaders — 88% named change management, and 70% named innovation. And lastly, we know there’s often a reluctance to change — 73% of Modern Healthcare survey-takers named culture as a key barrier to innovation.
So, before we dive in, we know that you are, you’re especially focused on innovation right now. What are you doing in the UK? And how did you get so interested in innovation?
CARTER DREDGE: Absolutely. So yes, I’m in a very unique period of my career. And so I’m serving as the Chief Transformation Officer reporting directly to the CEO of SSM Health, which I’ve been working there for the past several years with. And as the Chief Transformation Officer, I have accountability for long-term strategic forms of innovation. And I’m currently in the UK pursuing a very specialized Business Doctorate at Cambridge University. The program is designed specifically for senior business executives who have either built or have led major organizations. And it’s an attempt to really develop a really focused thinking around a tapping into that unique business knowledge of senior executives, and then codifying it into an established knowledge base. I work at a very enlightened system, SSM Health. My boss, Laura Kaiser, who’s the CEO — she’s a visionary, she’s a long-term thinker. And so we knew that coming up ahead over this next 5 to 10 years, there’s going to be some seismic type of innovations we’re going to have to take on and develop. And so SSM is making an investment and allowing me to spend a year here at Cambridge, spending time with some of the brightest minds in the world, articulating, what are the key questions? What are the key innovations? And what are the key frameworks for us to tackle over the next five to 10 years? It’s just a privilege, and I’m just thankful to the wonderful people that can make this happen.
And to the second part of your question, Kadesha, about why am I so interested in innovation. Very early on in my life, it became very much imprinted that innovation equated to helping people. And as my career progressed, I realized that organizational innovation has the potential to help millions. It is highly impactful for doing good.
MODERN HEALTHCARE: So, we hear people talk about innovation a lot. It kind of gets thrown around, along with the word disruption, right? So, how would you define the difference between innovation and disruption and their relationship to one another?
CARTER DREDGE: When I think about innovation, it certainly involves novelty and some creativity. It can happen to various degrees — sometimes that’s incremental, sometimes it’s more process oriented. At the same time, it could be really large or dramatic. If you think about disruption, this is where something, an idea or a business concept or technology, that comes in. And it comes in at a trajectory that’s so different than what currently exists. In the long run, it actually replaces the incumbent kind of way of doing things. In some cases, that might be an organization. In some cases, that might be a process. But in all cases, it really enters with such substantial long term force that it redefines how things are done.
So, when we think about innovation in organizations, we have to allow and cultivate both types. A sense of more ongoing, incremental improvement that is characterized with many of the care processes that we might have, we get a little bit better — 5%, 10%, 20%. And at the same time, cultivating and looking for these types of innovations that would be characterized as disruptive innovations that come in at these different kinds of more rocketship-type trajectories, and can deliver dramatic value, is how I would look at the relationship between innovation and disruption.
MODERN HEALTHCARE: Now, as we said earlier, culture is often cited as a barrier to that type of innovation. And you just said something that I think is really key. You said, “We have to allow it.” That speaks to the culture. So, what type of culture shifts are needed to truly make innovative changes, especially in large health systems? And are there key things to learn from non-healthcare companies about innovation?
CARTER DREDGE: Innovations of tomorrow, they’re going to blur the management lines of today. It’s really important as a senior leadership team, as a broader organization, that it’s not about whose specific silo in which one individual gets credit. It’s no turfism. Who’s in the best position to help pioneer the innovation, even if that’s in their formal job description or not? Do you have someone that might have unique subject matter expertise that might exist lower in the organization, and therefore it might be atypical for them to be involved in something of this magnitude? That should be allowed. We should let people move around us somewhat, if you will, seats on the bus. And again, focus less on who gets the individual credit, and more about can we allow the novelty to really blossom and grow?
And so, one of the cultural aspects, and I found this to be very successful at SSM Health, is where we spread the load. And when these new innovations come in, they almost always seem to cross across multiple management responsibilities. And by allowing those to be a little bit more fluid and all leaning in — that’s one cultural way that it doesn’t stifle, but rather encourages and allows innovation to go forward.
The second thing I would say, and this relates to learning from other organizations outside of healthcare, is we need to be more discerning about isolating and really identifying unique opportunities for innovation. I’ll kind of sum it up like this. An innovation doesn’t have to solve everything equally well to solve some things exceptionally well. And in many areas of technology development, say in the digital outside of healthcare sector, there is a thriving sense of what, you know, would be termed iterative failure. It’s like whoever fails the fastest at learning something brand new, progresses really fast and ultimately wins. Now, specifically in healthcare, there’s probably some areas, the iterative failure is not a good idea, or at least —
MODERN HEALTHCARE: Right.
CARTER DREDGE: While we may not be able to do certain things on the operating room table, that doesn’t mean that we shouldn’t begin to experiment in some other administrative type of service, where we could be a little bit more innovative in thinking about how we can really push for new boundaries.
I would say another cultural shift is healthcare, particularly in large systems, is heavily regulated. And it has just a lot of multiple stakeholders. And it has, at times, a heavy amount of bureaucracy. But when you step back and you can start to discern an opportunity to break through, don’t focus on solving every problem with the new innovation. We could get focused on solving a select few problems exceptionally well. If we can keep turfism low, unity and kind of patient-oriented outcome-focused, be very high there, and be satisfied with focusing on focused-use cases, things like that, the amount of innovation will continue to grow rapidly.
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And now here are more thoughts on innovation from Carter Dredge, Chief Transformation Officer at SSM health.
MODERN HEALTHCARE: I feel like a lot of up and coming healthcare leaders think of innovation as these huge drastic changes rather than focusing on a select few improvements. They feel like it has to be a sweeping change and almost talk themselves out of pursuing these improvements because they’re not big enough. Can you share some of the most successful examples you’ve seen of disruption or of innovation within a single healthcare organization? And then what about in healthcare more broadly?
CARTER DREDGE: If you look at some simple examples first, maybe one that’s maybe clinically-oriented. You know, previous to working at SSM, I worked at Intermountain Healthcare, which is another organization I feel extremely high respect for, and they’re just a great, great organization.
One thing I remembered about this kind of organizational disruption that was really clinically meaningful is, many, many years ago, they decided that they were not going to electively induce labor prior to 39 weeks gestation. If there’s a medical reason to have someone have a baby early, let’s do it. But if it’s either for convenience or anything else, they looked at the data and said, “We’re not going to do this.” The reason I call this more of a disruptive innovation inside is, health systems get paid quite a bit of money to take care of these premature babies. But they fundamentally said, “If we can find a better way to do this, let’s do it.” They first started with guidelines, they coalesced. And the people at the front lines, they were frontline clinicians that knew how to do this. There was some analysts and data scientists that were able to pull the data in. There was people in communication that could say, “This is why it’s important. And this is how it translates to the patient, to the benefit.” And they connected all these dots. And while each step in that process looked very incremental, in the end, what you get is people entering life, babies being born, in one of the safest places you, and methods, you can have it. And it all adds up to be a great innovation. And there’s a lot of people that are part of it.
MODERN HEALTHCARE: I think, you know, what’s happened during this pandemic is that a lot of health systems have been forced to adopt things that maybe were on the table for a long time, but never move forward. Or they’ve been forced to do new things that they never thought they’d be able to do. What do you think the COVID-19 pandemic has highlighted that health systems should focus on as they attempt to plan for 2021?
CARTER DREDGE: A couple of things with COVID-19. And you know, all of us in healthcare have been right in the mix of this and — really late, stressful nights, both from certain planning things, people on the frontlines. First, I would just even say about COVID-19 is, one thing I’ve learned about health systems, is when things get super, super hard, they’re there, and they step up. And I’ve been very impressed. I mean, we have nurses in our organization that are sacrificing immensely.
MODERN HEALTHCARE: Yeah.
CARTER DREDGE: We have stories of nurses so committed. We had some of them come back out of retirement when COVID was getting announced to say, “This is what I was born for.” And that’s the kind of commitment — so, number one thing I’ve learned, even before I get to the planning thing is that, these organizations are filled with people with the right stuff. And that’s relevant to my next comment about, what do we think about planning forward?
If I first talk macro, I’ve always believed that the best way to plan for 2021 is to plan for 2025. And what I mean by that is, my view as a Chief Transformation Officer is when you think about planning, you need to think about trends. And typically trends are those that, again, multi-year in nature. That even COVID, while it changed a lot of our operational flows, in many cases, it magnified existing trends.
For example, some of those businesses that had digitally or mobily native platforms. COVID just catapulted them forward, wind in their sails, from an adoption perspective, because they’re of this kind of new business model of the future. Those digital tech, very analytically-savvy companies will really push forward very quickly. And I think they will continue to be. And so that’s a really big implication for 2021.
Secondly, it really highlighted some of the overall kind of uncomfortable disparities about, who do we serve as a health system? And how do they access our system? We need to be comfortable wrestling with those things that are uncomfortable. So, when I think about, what do we need to think about for the next, planning for 2021? If I go back first to people, we have examples where people have been forced really into this situation to be more innovative than they ever have before.
MODERN HEALTHCARE: Mm hmm.
CARTER DREDGE: And we need to figure out how to carry that momentum forward. Carry that ingenuity of the frontline staff that have figured out how to make things work when things were tight, and when things were uncertain. So, that while we can take the edge of some of the intensity of the pandemic off, I hope we can continue to embrace and focus. And I think organizations need to explicitly focus on how to continue to get the front line ideas from people who are now more plastic in their thinking, less static in their approach of how things have to be done, than honestly, any of us have seen in a career. We need to continue to allow that flexibility of thought to germinate.
Second, as it relates to the disparity in the macro level between digitally native and digital laggard business models, the digital era and the future of these virtual services is not going away. It’s going to continue to accelerate. It doesn’t mean those services have to be done predominantly that way. But it certainly is part of the plan. And we need to make sure as health systems, that we are digitally savvy as we go forward, because that will start to change massively, that the local market dynamics, as many of these things as they occur digitally are not about just single geography.
And then lastly, about these disparities related to, how do we make sure that everyone, everyone gets appropriate access to services? SSM health is close to 150 years old. And our founding sisters always took a really long view. And right now is the time to make sure that we double down not just on a digital trend to make sure an appropriate quote unquote market share number is reached. But that we can channel digital capabilities, and make sure that everyone can access it.
If I come back and close the loop on what kind of keeps me in innovation, and where we started here. And I go back to say, to me, innovation is about doing good. And organizational innovation is about doing a lot of good. And what I would even say is sustainable good. That’s really what we can really continue to focus on in 2021, is turning these trends into areas that reverse and kind of nullify some of these disparities we do not want to be perpetuated.
MODERN HEALTHCARE: Mm hmm.
CARTER DREDGE: And for us to tap into the people. And for us to articulate which business models truly are we in? Which ones do we need to be in? And if you can get the people, the business models, and the social justice incorporated into your core plans, you’re going in the right direction. I’d rather go down a bumpy dirt road in the right direction than a smooth highway going in the wrong direction. Innovation sometimes is perceived as disrupting the process and making things less efficient momentarily. But the fruit is worth it. And you need to carve out space and time for people to tinker and make things better. And when we do, we can make them way better. So I’m just, I’m very passionate about it. And it’s wonderful.
MODERN HEALTHCARE: Absolutely. It’s like a good pep talk almost for people who are sitting in these meetings thinking about their plan. Here’s what you need to prioritize. Here’s what you need to keep in mind. Last question, for those young people who are looking to lead health systems in the near or far future, what advice would you give them for helping their innovative ideas actually get a seat at the table and pushing them forward?
CARTER DREDGE: Fantastic question. First thing that I would say is, again, the innovation need not be really large to be really impactful. And particularly when you’re earlier in your career. It’s really about, do you understand the flow and the priorities of an organization? Sometimes, I’ve found people early in their career, they have a really good idea, and I would agree, it’s an objectively really good idea. But sometimes they don’t always read, what is the organizational priorities in the organization at the moment? And this is when ideas blossom. And it’s the distinction between the ones that go through and the ones that don’t. An objectively good idea is only half the equation.
The other part has to do with, is the organization ready and willing to resource that type of investment? And sometimes it’s a matter of timing. So, rather than spend a lot of time pushing something that you’re having — almost like as a boulder, going up the hill — find something that you have a natural path, there’s already a natural executive sponsor inside the organization. Try to find yourself in the strategic plan of the organization, similar to the conversation we just talked about. Because where there’s organizational priorities, there’s organizational resources that are going to allow you to flourish. And then second, the best way to get your next job is to do really good at your current job.
MODERN HEALTHCARE: Yeah.
CARTER DREDGE: If you focus on the scope that you have, and you innovate within your own domain of autonomy, you can continue to progress. To articulate this point, many times I have people that come up with ideas, and let’s just say they work in accounting. They’d be like, “You know what, I have a great idea for what HR can do better.” Or people that work in supply chain to say, “I have a really good idea of how finance can improve.” While those ideas are helpful, what are more helpful, particularly when you’re young in your career, is to say, “This is what our department can do better. This is what I can do better in my specific role.”
And as you innovate with your own role, with your own autonomy, and you make your own decisions, that sets you apart as a candidate to become a next executive. Because pure and simple, executives make decisions. And so the more that you can innovate and make decisions on your own behalf, that helps show that you have the potential to make bigger and broader decisions. And so, that’s some good advice that I would offer for those that are trying to find their way.
MODERN HEALTHCARE: Absolutely. Thank you so much for making the time all the way from the UK. We really, really appreciate this insight.
CARTER DREDGE: Well, it’s been a real pleasure. Thank you.
OUTRO COMMENTS: Thank you, Carter Dredge, for speaking about the need for innovation and disruption in healthcare, and how you can get there within your own organization.
Again, I’m your host, Kadesha Smith, CEO of CareContent. We help health systems reach their growth goals through digital strategy and content.
We’d again also like to thank our episode’s sponsor, Masimo.
For the latest news on healthcare innovation, visit modernhealthcare.com. It’s also not too early to register for Modern Healthcare’s transformation summit, which will be May 18-19, 2021. For more information, visit transformation-summit.modernhealthcare.com.
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