The Hidden Pitfall in Healthcare Innovation: Why Brilliant Pilots Fail to Scale
Joshua Tamayo-Sarver, MD, PhD, FACEP, FAMIA
The Frustrating Reality of Failed Healthcare Innovations
I stood in the bustling emergency department of a rural hospital, watching a young physician struggle with an “innovative” EHR system that was supposed to revolutionize patient care. A wave of frustration washed over me. This scene, playing out before my eyes, epitomized a pervasive issue in healthcare technology — the failure to scale beyond successful pilots.
For years, I’ve been deeply involved in scaling healthcare technology, witnessing countless promising innovations stumble when moving from controlled pilot environments to the diverse landscape of real-world healthcare settings. Initially, I attributed our success at Inflect Health and Vituity to superior teamwork, refined processes, and, admittedly, a touch of personal brilliance. However, a humbling realization has since dawned on me: our advantage stems not from individual genius, but from a structural quirk that gives us a unique edge in the healthcare innovation space.
The Small Area Variation Problem: Healthcare’s Hidden Nemesis
The root of this scaling challenge lies in what epidemiologists call the “small area variation problem.” This phenomenon, first observed by Dr. John Wennberg in the 1970s, reveals how medical practices can vary dramatically between seemingly similar populations.
For instance, in two neighboring towns in Vermont, the rate of tonsillectomies in children under 15 varied from 20% to 70%. This vast difference in a routine procedure between two similar populations exemplifies a broader truth in healthcare: what’s considered standard practice in one setting can be radically different just across the street.
Even more intriguing is how quickly healthcare professionals adapt to local norms. A doctor moving from one hospital to another will swiftly adopt the practices of their new environment, despite years of training and ingrained habits.
This overwhelming influence of microcontext on medical practice patterns presents a significant challenge for healthcare innovators. It explains why brilliant pilots often fail to scale — they’re exquisitely tailored to one environment’s unique variations, making them potentially irrelevant or even counterproductive in another.
The Innovation Trap: Over-Indexing on Local Issues
Picture this: You’re part of an elite innovation team at a world-renowned hospital. You’ve identified a critical problem, developed a cutting-edge solution, and your pilot results are off the charts. Success seems assured. Yet, when you attempt to implement this solution in other hospitals or healthcare systems, it falls flat.
Why? The answer lies in the very process that made your pilot successful. By diving deep into a specific problem within a single environment, you’ve inadvertently created a solution that’s over-indexed on local issues. This is the hidden trap that ensnares many healthcare innovations, leading to a graveyard of promising pilots that never achieve widespread adoption.
I believe that this also explains why companies and innovators that have amazing success in the medical device or pharmaceutical industry struggle when they move into the digital and software realm. While a particular device or pharmaceutical is reasonably standardized across general healthcare markets (and that over generalization is admittedly a bit of a stretch), digital tools and software rely on nuances in workflow, responsibilities, team composition, authority, how the work gets done in healthcare, and how the local patient population engages. That is to say, small area variation is dramatically more pronounced in software and digital than it is in devices and pharma.
Structural Advantage: The Key to Scalable Innovation
I’ve come to recognize the structural advantage in our approach at Inflect Health: our vast and diverse healthcare network. With a presence in over 550 hospitals, serving more than 12 million patients annually across urban, rural, academic, and community settings, we have a built-in safeguard against the small area variation problem.
When we develop a new technology, it must, by necessity, work across our entire organization — which essentially means it must work across healthcare as a whole. Our subject matter experts aren’t confined to a single hospital or system; they represent the full spectrum of healthcare environments. This diversity forces us to address small area variations from the very beginning of the product design process.
The Path Forward: Embracing Diversity in Healthcare Innovation
To create truly scalable healthcare innovations, we must broaden our perspective from the outset. It’s not enough to solve a problem for one hospital or one system. We need to design solutions that can adapt to the myriad variations in healthcare practices across different settings.
For venture capitalists, healthcare technology entrepreneurs, and hospital executives, this insight is crucial. When evaluating or developing new healthcare technologies, consider:
1. Diverse Testing Environments: Does the innovation work across different types of healthcare settings?
2. Adaptability: Can the solution flex to accommodate varying practice patterns?
3. Broad Stakeholder Input: Does the development process include perspectives from a wide range of healthcare environments?
By addressing these questions early in the innovation process, we can create solutions that don’t just shine in controlled pilots but truly transform healthcare at scale.
Conclusion: The Power of Structural Diversity
As I reflect on my journey in healthcare innovation, I’m humbled by the realization that our success isn’t just about individual brilliance or even team excellence. It’s about having a structure that forces us to confront healthcare’s inherent variability from day one. And that, more than any other factor, is what allows us to build solutions that can truly scale and make a lasting impact on healthcare delivery.
Dr. Joshua Tamayo-Sarver, MD, PhD, FACEP, FAMIA, develops and deploys technology solutions in the healthcare ecosystem as a clinician, business leader, software engineer, statistician, and social justice researcher. As the Vice President of Innovation at Inflect Health and Vituity, his unique formula of skills has helped develop over 35 solutions and scale multiple new healthcare products, including the first AI occult sepsis tool with FDA breakthrough designation. Dr. Tamayo-Sarver oversees corporate venture, internal incubation, and advisory services for AI-driven healthcare solutions, blending consumerism and clinical quality to fit the delicate balance of patient desire, user experience and quality medical care. A Harvard graduate, he holds degrees in biochemistry, epidemiology, and biostatistics, as well as a medical degree from Case Western Reserve University. He is a Mentor in the Emergence Program at Stanford University.
