Global Business School for Health


How can we drive innovation in hospitals?

2 October 2021

Global consultant on innovation, entrepreneurship & gender equality, Talal Rafi, discusses the need for innovation in hospitals, the challenges they face and the ways in which they can introduce innovation into their systems.

A health professional assessing a patient

Hospitals play a critical role in society. In the US alone, more than $1 trillion a year is spent on hospital care. Over two thirds of hospital costs go to brick and mortar overheads showing the need for innovation. Innovations in hospitals that can bring significant change can be through virtual health, artificial intelligence, virtual reality and cloud based technologies. 

Need for innovation in hospitals

Covid-19 has brought about a need for change in the health sector. There has to be innovation in not only the health technology but also on how and where the technology is used. People are becoming more health conscious and with the amount of information available online, are very informed before making decisions. Ageing populations also forecast a rising demand for hospitals. Many patients pick hospitals depending on the doctors it offers and having an innovative strategy helps attract the best talent. Lastly, there are a lot of opportunities to tap into in terms of increasing efficiency, ease of use, saving time and reducing costs. 


Hospitals face a number of unique challenges when it comes to innovating. In the health sector, many patients do not understand healthcare so feedback from the patients is not considered valuable. Management also may not understand the technicalities of healthcare and this can cause an issue for doctors and staff to communicate their needs to management. At the same time, lower level staff also find it difficult to express ideas to bring change. Shortages of skilled employees and the high cost of training employees are major challenges for hospitals. Healthcare being a heavily regulated sector is also a challenge to bring about innovation. With the democratization of information and social media, it is risky to bring about disruptive innovation as a small mishap can ruin a hospital’s reputation which will be quite difficult to regain in the health sector. 

How can hospitals bring about innovation

Innovative Leadership - The hospital board has to have innovative leaders who have a vision to bring change and to support and provide the needed infrastructure to implement the innovation strategy. Top down support and timelines for change are needed. Having people with diverse backgrounds in leadership positions brings about innovation. 

Innovative Culture - Hospitals can greatly benefit by bringing in a culture where stakeholders are free to speak out about ideas and everyone’s voice is heard. Having innovation centers where various stakeholders can exchange ideas can help drive innovation. As healthcare involves many technicalities, different departments such as research, operations and marketing can collaborate to bring about solutions. A good step would be to have an innovation lab like Google X, so employees can try out new things to bring innovation.

Strategic Partnership - Strategic partnership with other entities can be mutually beneficial and help drive innovation. Leaders of large organizations such as hospitals may not always have the time to prioritize innovation so partnering with or investing in healthtech startups would be a good strategy. Partnering with universities can be beneficial for hospitals with access to talent and innovative thinking.

Headshot of Talal Rafi
Talal Rafi is a global consultant on innovation, entrepreneurship & gender equality and is based in Sri Lanka. He is a member of the Expert Network of the World Economic Forum. His work has been published by the World Bank, International Monetary Fund, Asian Development Bank, World Economic Forum, London School of Economics and Forbes.