Becker's Hospital Review

74 INNOVATION 4 questions health systems should ask before investing in digital health By Katie Adams A s hospitals continue to operate on thin margins, it can be difficult for them to determine which new technologies will be worth their implemen- tation and maintenance costs. Here are four questions health systems should ask be- fore investing in new technology, as laid out by Seth Joseph, a managing director at digital health consultan- cy Summit Health, in a March 16 Forbes report: 1. What problem does it solve, or what value does it bring? 2. How difficult will it be to unlock that value? 3. How does the technology fit into your system's broad- er portfolio strategy for innovation? 4. How stable is the vendor's stance in the market? n Cedars-Sinai launches AI division By Katie Adams T he Department of Medicine at Cedars-Sinai created a division to explore artificial intelligence's applications in healthcare. The division, called Artificial Intelligence in Medicine, is led by Sumeet Chugh, MD, an associate director at Cedars-Si- nai's Smidt Heart Institute, the Los Angeles-based health system said March 1. "Dr. Chugh has extensive experience using artificial in- telligence to solve clinical problems for sudden cardi- ac arrest, one of our most difficult conditions," Shlomo Melmed, Cedars-Sinai's executive vice president of academic affairs and dean of medical faculty, said in a news release. "Under his leadership, the new division will harness the Cedars-Sinai systemwide clinical data ware- house to design clinically relevant approaches to solving important health questions." The division is currently focusing on cardiac imaging, sudden cardiac arrest, COVID-19 and clinical genetics. Dr. Chugh said he hopes the division will explore a wider range of medical, surgical and public health issues in the coming years. n Innovation faces huge obstacles from Big Tech By Molly Gamble L arge companies' proprietary informa- tion technology allows them to main- tain dominance while slowing the growth of rivals, reducing opportunities for innovative disruption, according to an essay in MIT Technology Review. Essay author James Bessen, an economist and executive director of the technology and pol- icy research initiative at Boston University School of Law, challenges common thinking that technology creates disruption, in which smaller, newer companies' innovations en- able them to grow and ultimately leapfrog their older, less productive predecessors. is type of disruption has declined sharp- ly the last two decades, and Mr. Bessen at- tributes the falloff to dominant companies' proprietary technologies. In total, companies (excluding those whose product is soware) now invest more than $240 billion in internal soware each year, up from $19 billion in 1985. "Large firms account for most of that change," Mr. Bessen wrote. "e top four companies in each industry, ranked by sales, have increased their invest- ment in their own soware eightfold since 2000, far more than even second-tier firms." Dominant companies see the return on in- vestment. Since the 1980s, the top four firms in each industry have increased their market share by 4 percent to 5 percent in most sectors. "My research shows that investments in proprietary soware caused most of this increase," Mr. Bessen wrote, noting that the companies' growing dominance is accompa- nied by a corresponding decrease to the risk that they will be disrupted. Disruption has been on the decline since about 2000, when top companies began in- vesting heavily in proprietary IT systems. "In a given industry, the chance that a high-ranking firm (as measured by sales) will drop out of one of the top four spots within four years has fallen from over 20 percent to around 10 percent," Mr. Bessen wrote. "Here, too, investments by dominant firms in their in- ternal systems largely account for the change." How so? Proprietary soware and IT reduce the costs of managing complexity; they also allow large companies to scale while simul- taneously adjusting to consumer needs and preferences with agility. Look at retail: Walmart responds faster to changing customer needs and offers greater selection than Sears or Kmart. "Sears was long the king of retail; now Walmart is, and Sears is in bankruptcy," the essay stated. "With the right data and the right organi- zation, soware allows businesses to tailor products and services to individual needs, offering greater variety or more product fea- tures. And this allows them to best rivals, dominating their markets," Mr. Bessen wrote. Mr. Bessen is the author of the upcoming book e New Goliaths: How Corporations Use Soware to Dominate Industries, Kill Innovation, and Undermine Regulation, from which the essay published by MIT Technolo- gy Review is adapted. n

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