Innovation Barriers

Case Aims: To illustrate some of the obstacles to expanding entrepreneurship in the healthcare sector

Phillip and Garman (2006) concluded that the scale of entrepreneurship in the healthcare industry is often limited in part because of barriers inherent in the structure and culture of healthcare organisations. Eliminating such barriers would likely increase entrepreneurial activities, and by driving innovation new revenue sources can be identified.

Phillip and Garman noted that the healthcare industry is organised into a fragmented and complex matrix. Most organisations have a relatively narrow mission and depend on other organisations to undertake complementary tasks. They tend to avoid competing with other organisations engaged in fulfilling similar service provision roles. Where there is a competitive environment, mostly in large metropolitan areas with multiple academic medical centres, access to scarce resources discourages collaboration and co-operation between organisations with similar capabilities. For example, hospitals tend to avoid activities that compete with doctors practices making patient referrals. Similarly, those medical practices are often reluctant to provide services that compete with the services provided by affiliate hospitals (Kastor 2001).



Further complicating the situation is the fact that the roles and responsibilities of most professionals within healthcare environments are defined, regulated or restricted by a myriad of private and governmental regulations, standards and traditions. Traditionally, healthcare organisations have been very hierarchical, with physicians exercising disproportionate influence and authority over all aspects of the organisations' operations. Although lessened to a certain extent in recent years, this continues to greatly influence the operations of most patient care organisations and the willingness to engage in entrepreneurial activities (Meliones 2000).

Phillip and Garman also noted that career motivation and job satisfaction among many healthcare professionals suggest an inherent incompatibility with entrepreneurship. Job security and stability of employment have consistently been cited as important motivating factors in the choice of a healthcare career. This is to be expected, because healthcare has been one of the most stable industries in terms of job security and predictability of career paths (Manojlovich and Laschinger 2002).

Institutional culture and policies also can adversely affect the ability to promote entrepreneurship, impairing innovation. Within most healthcare organisations, little consideration has been given to the commercial possibilities of technology, innovation and services; there has thus been a commensurate lack of concern with capturing the value of these innovations. It has only been in recent years that leading academic medical centres have actively sought to identify and consider exploiting the economic value of technology and innovation developed at those institutions (Robinson 2001).

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