Innovation in healthcare has long suffered from a specific organizational failure: the people closest to the problems are rarely the ones empowered to solve them. A growing number of health system leaders are concluding that this isn’t just a missed opportunity, it’s a strategic liability, and they’re building the structures to correct it.
Katrina Wojciechowski, vice president and associate COO of Rochester (N.Y.) Regional Health, launched what the system calls hospital-based Innovation Labs — physical spaces embedded within the hospital environment where clinicians, staff and operational leaders can work on real problems together. Each hospital lab connects directly to a centralized system innovation center, creating a “true bidirectional pipeline”: frontline insights shape system priorities, while system resources accelerate and scale what works locally.
“In this model, innovation becomes operational, not theoretical,” said Ms. Wojciechowski. “In parallel, we’ve applied this same mindset to throughput. Despite significant community resource constraints, we’ve re-imagined throughput by shifting the focus from days to minutes and hours, and by asking a different question: what is keeping a patient in a bed right now? That lens has pushed us upstream to address preventable drivers such as hospital-acquired infections, falls, diagnostic delays and variation in care processes.”
Throughput at Rochester Regional is now about reducing harm, improving reliability and creating capacity in addition to discharge time. The team has been able to improve the care experience by focusing on the big picture.
“These efforts represent a broader shift at Rochester Regional Health: empowering teams closest to the work to solve problems, while tightly aligning innovation and operations around what matters most to patients and staff,” said Ms. Wojciechowski.
The same logic is driving Tower Health’s Shark Tank-style competition, in which employees from across the organization pitch innovations directly to leadership.
President and CEO Michael Stern said when the concept moved from idea to practice, a pharmacy specialist at Reading (Pa.) Hospital proposed a rapid diagnostic program to accelerate antibiotic therapy. The program reduced ICU length of stay and lowered cost of care.
The impact of Tower Health’s competition reached far beyond the ICU.
“It is a way to tap into the expertise of the people closest to the work every day and give them a meaningful voice in shaping our future,” said Mr. Stern. “What began as a new idea quickly became a catalyst for many others.”
Other team members were also able to realize their innovative ideas. Mr. Stern said there were a “tremendous number” of other projects ignited by the competition that Tower Health is now putting into action.
“This is what makes this initiative so powerful,” he said. “It creates a culture where innovation can come from anywhere, and I’m excited to see what our teams bring forward this year.”
Instead of investing in centralized R&D or relying on vendor-driven solutions, these systems are investing in the organizational conditions that allow good ideas to surface, be tested, and spread. The infrastructure of innovation is being built as deliberately as clinical programs.
The financial dimension of innovation culture is equally important, and often underappreciated. At Allegheny Health Network in Pittsburgh, President Mark Sevco and his team built a digital transformation roadmap around data and AI capabilities as the infrastructure for a population health strategy that has driven a $240 million improvement in operating margin compared to the prior year.
“This approach has enabled us to meaningfully improve access to care while continuing to elevate quality and patient experience,” he said. “At the same time, we have maintained strong operating discipline and a focus on total cost of care.”
At Nemours Children’s Health, the innovation logic runs through financial operations themselves.
“This year for Nemours, finance is making a comprehensive shift toward optimizing financial operations that strengthen organizational agility,” he said. “We are evaluating our enterprise planning model to help our clinical operators make informed decisions through data that unifies clinical, operational and financial data into a single decision environment.”
The executive team presented a $250 million operational excellence plan to the board they plan to implement over multiple years, anticipating cost and reimbursement pressures. The goal is to redirect resources to areas with the greatest value for patients and team members.
“We are modernizing our capital allocation process to emphasize transparency and speed, ensuring every investment is evaluated not just on ROI, but also on its ability to advance access, quality and long-term sustainability,” he said. “What excites me most is how this work is breaking down silos empowering clinical leaders, finance, and operations to make decisions together with shared facts and a shared purpose. It’s a transformation that is already improving alignment across the organization and positioning us to respond more effectively to the challenges ahead.”
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