AMS Review (2019) 9:78–92

https://doi.org/10.1007/s13162-019-00135-x

THEORY/CONCEPTUAL

Service innovation is urgent in healthcare

Leonard L. Berry 1,2

Received: 16 November 2018 / Accepted: 14 March 2019 / Published online: 24 May 2019
# Academy of Marketing Science 2019

Abstract
Healthcare is a service setting where meeting the needs of customers (patients and their families) is uniquely challenging. But the
necessity, complexity, cost, and high-emotion nature of the service, as well as technological advances and competitive dynamics
in the industry, make the imperative for service innovation in healthcare especially urgent. Forward-thinking healthcare institu-
tions around the United States are succeeding in establishing a value-creating innovation culture and in implementing operational
and strategic service innovations that benefit them and their stakeholders. They view continuous innovation as a non-negotiable
goal, prize institutional self-confidence, and include patients and families on the innovation team. Cancer care, in particular, faces
a pressing need for service innovation, and some progressive oncology centers are demonstrating what is possible to improve the
patient and family service experience. The imperatives, now, are for service innovation to become part of the fabric of how all
healthcare institutions, not just the groundbreakers discussed in this article, operate—and for academics in the field of marketing
to play a crucial role in that effort.

Keywords Service innovation . Innovation culture . Value-creation . Cancer care

An emergency department nurse at a Martin Health System process effectively eliminated the time nurses wasted
hospital in Florida could not locate an intravenous (IV) pump obtaining equipment, and hoarding behavior ceased
for a patient in a timely manner, a recurring problem. Martin, (Toussaint and Berry 2013).
an adherent to the “Lean” quality-improvement philosophy, Martin Health System’s “equipment supermarket” exem-
analyzed its nursing care processes and found that nurses in plifies the essence of service innovation—a service process that
the hospital spent an average of 38 min per shift looking for offers a new benefit, or a new way to deliver an existing benefit,
equipment, taking precious time away from patient care. that is perceived by customers or those who serve customers as
Some nurses even took to hoarding certain equipment so that providing more value than available alternatives. A service inno-
they could access it quickly, contributing to a false perception vation creates value by offering benefits to prospective adopters
of shortages. Further analysis indicated that Martin actually that exceed the monetary and/or non-monetary burdens of
had an excess of IV pumps, compared with the national aver- switching from the old to the new, thereby leading to meaningful
age of 1.2 pumps per hospital bed. What Martin lacked was an adoption. Successful innovation requires a change in behavior
efficient system for nurses to obtain needed equipment. that is unlikely to occur without true value creation. The value
Martin’s solution was to install “equipment supermarkets” creation may start with the service provider (e.g., in the form of
that would stock necessary inventory in nursing units. The efficiencies and cost savings), but it must ultimately reach—and
shelving was color-coded and numbered with the quantity of offer a net benefit to—the end customer in order to qualify as a
items for each color: green for ‘adequate supply’; yellow for true service innovation. Martin’s equipment supermarket—a
‘replenish soon’; red for ‘restock immediately’. The new new way to deliver an existing benefit—enabled nurses to spend
more time on patient care. Moreover, by increasing the number
of times an IV pump could be used in a day, the hospital was able
to shrink its pump inventory by 100 units, saving $300,000
* Leonard L. Berry
[email protected] (Toussaint and Berry 2013).
In addition to differing in the type of offered benefit (core
1
Mays Business School, Texas A&M University, College or delivery), service innovations also differ in their degree of
Station, TX 77843-4112, USA separability. The time and/or place of service production differ
2
Institute for Healthcare Improvement, Boston, MA, USA from the time and/or place of service use for a separable
AMS Rev (2019) 9:78–92 79

service; conversely, service production and consumption are A different kind of service
synchronous for an inseparable service (Berry et al. 2006a).
Dropping one’s automobile off at a dealership for a “checkup” Healthcare is a unique consumer setting: The service-quality
is primarily a separable service; going to the doctor for a challenge of serving a sick customer who may be anxious and
physical checkup is primarily an inseparable service. in pain differs from that of serving one who is well. Healthcare is
Table 1 depicts the four dimensions of service innovations: a “high-emotion” service that can create intense feelings such as
type of benefit (core vs. delivery) and degree of separability fear, anxiety, and uncertainty before the service is even delivered
(separable vs. inseparable). Most service innovations, whether (Berry et al. 2015). Indeed, illness causes some people to be far
operational or strategic in nature, fall somewhere in this four- more sensitive, dependent, and/or demanding consumers than
cell matrix. Operational service innovations create customer they typically would be (Berry and Bendapudi 2007).
value by improving existing processes and offering greater In no other service is managing the “customer experience”
efficiency, timeliness, quality, or other enhancements to oper- more important than in healthcare. Marketing scholarship con-
ational outcomes. Strategic service innovations redirect, to verges on the view that total customer experience is a multi-
some degree, the course of the organization’s go-to-market dimensional construct that incorporates customers’ cognitive,
strategy. Strategic innovation can be new to the organization emotional, sensory, and behavioral response to human inter-
but not the market, or new to both the organization and the action, technology, facilities, and other stimuli (Lemon and
market. Healthcare organizations must excel in both opera- Verhoef 2016; Schmitt 2003; Verhoef et al. 2009; Bolton
tional and strategic innovation. et al. 2018; Edvardsson et al. 2010). The elements of customer
This article addresses five primary topics. First, it describes experience need to be cohesively orchestrated for consumers-
the uniqueness of healthcare services. Second, it discusses the turned-patients—whose sensitivities, dependencies, and ex-
inefficiency and waste in healthcare that requires bold action. pectations are likely to be heightened during illness or injury.
Third, it explains the need to establish an innovation culture in For patients with chronic or life-limiting disease, customer
healthcare organizations and presents key essentials toward that experience becomes an ongoing series of events that comprise
end. Fourth, it highlights the opportunity for service innovation a multitude of experiential “touch points.” In healthcare, there
in cancer, an especially frightening and pervasive constellation of are many opportunities to fall short.
diseases for which patients and families can benefit enormously Most services are “want” services; healthcare is a “need”
from innovative approaches to service delivery. Fifth, it outlines service, often a dreaded one. Services such as dining at a
ways in which academics in the field of marketing can advance restaurant or streaming a movie online are “want” services; a
the research on healthcare service innovations. The article in- colonoscopy or mammogram is a “need” service. Customer
cludes numerous examples of service innovation, to illustrate reluctance is a reality of healthcare. Healthcare, a highly per-
focal concepts and show what is possible when patient-centered- sonal service, may require individuals to divulge private in-
ness, creativity, and boldness converge. formation to (and sometimes undress in front of) a clinician

Table 1 Matrix of service innovations

TYPE OF
BENEFIT
Core Delivery

TYPE OF
SERVICE

Separable Core/Separable Delivery/Separable

Inseparable Core/Inseparable Delivery/Inseparable

Source: adapted from Berry et al. (2006a). Creating New Markets Through Service Innovation. MIT Sloan Management Review, 47 (2), 56–63
80 AMS Rev (2019) 9:78–92

they are meeting for the first time. Healthcare services need to These realities, combined with other pressures such as exces-
be customized to fit not only patients’ medical conditions, but sive workload, reduced autonomy, inefficient processes, and
also their cultural preferences, mental states, family support at time-consuming documentation of the clinical visit, can trans-
home, and financial capacity, among other factors that influ- form what on paper seems to be a dream job—being a
ence treatment planning. In effect, patients need “whole-per- doctor—into a physically and emotionally draining occupa-
son care” (Berry and Bendapudi 2007). tion (Shanafelt et al. 2017; Downing et al. 2018; O’Shea
Healthcare can be an unsafe service (Makary and Daniel 2018). Electronic health records (EHRs) in particular intensify
2016). Too many patients are harmed by carelessness, poor staff the clerical burden and compete for clinicians’ attention as
communication, clinical incompetence or fatigue, unnecessary they interact with patients (Shanafelt et al. 2018). Research
treatment, or some combination thereof. Each year several mil- reveals that U.S. doctors currently spend as much (or more)
lion U.S. patients get preventable infections during hospital stays time on recordkeeping and other aspects of what is called
for reasons ranging from clinicians’ poor hand hygiene, to inad- “desktop medicine” as they do directly interacting with pa-
equate preparation of a surgical patient’s skin with an antiseptic tients (Tai-Seale et al. 2017; Sinsky et al. 2016).
agent, to failure to raise the head of a mechanically ventilated Burnout—a syndrome of exhaustion, cynicism, and reduced
patient’s hospital bed, thereby causing pneumonia (Berrios- work-related effectiveness—is widespread among U.S. physi-
Torres et al. 2017; Anderson et al. 2014; Chassin et al. 2015). cians (Shanafelt et al. 2017). Research-based estimates indicate
Patients also are vulnerable to medication errors, such as receiv- that more than 50% of U.S. doctors show at least one sign of
ing the wrong drug or the right drug at the wrong dose, or re- burnout (Shanafelt et al. 2015; Shanafelt et al. 2017). Burnout
ceiving multiple drugs that interact adversely (Nuckols et al. among physicians has been associated with greater turnover,
2014; Bates and Slight 2014; Wittich et al. 2014). Patients also higher rates of medical errors, and increased mortality incidence
may be harmed by overdiagnosis that results in overtreatment for hospitalized patients in their care (Wallace et al. 2009; Tawfik
(Davies et al. 2018). Welch and colleagues write, “Over-diagno- et al. 2018). Burnout is similarly afflicting nurses (McHugh et al.
sis occurs when individuals are diagnosed with conditions that 2011; Shanafelt et al. 2015). Improving healthcare quality de-
will never cause symptoms or death….There is nothing to be pends on sustained, determined and, at times, courageous actions
fixed…an over-diagnosed patient can only be harmed. And the to address and resolve the primary factors contributing to clini-
simple truth is that almost all treatments have potential to do cian burnout. Serving customers who are sick requires passion,
some harm” (Welch et al. 2011, pp. xiv-xv). idealism, energy, and purpose for the work, all casualties of
Another difference between healthcare and other services is work-related burnout (Swensen 2018).
its combination of complexity and importance. Some services
(such as computer repair) are complex but not potentially life-
changing or life-threatening. Healthcare is both complex and
consequential—a “blackbox” service that gives clinicians the Wasting precious resources
upper hand (Berry et al. 2015). Clinicians’ technical knowl-
edge, prestige, and position can cause patients to refrain from Healthcare costs in the U.S., the highest in the world on a per
questioning a diagnosis or treatment plan that seems wrong. capita basis by far, are nearing 20% of the gross domestic
Consumers normally are in charge of what, how, and where product (Stey et al. 2018). Annual spending on healthcare in
they buy. In healthcare, clinicians hold most of the power, the U.S of $3.6 trillion dwarfs spending on education ($1.1
especially in cases of serious illness when anxious patients trillion) and national defense ($867 billion) (Altarum 2018;
can feel highly dependent on doctors and avoid any behavior Fuchs 2018). The return on this investment is questionable.
that may offend them (Berry et al. 2017a; Awdish 2017). Life expectancy in the U.S, for example, actually decreased in
Patient timidity stymies shared decision-making whereby cli- 2015 and 2016, and only 8% of U.S. residents receive recom-
nician and patient pool their knowledge—the clinician’s med- mended preventive care (Borksy et al. 2018). Economic
ical expertise and experience and the patient’s self-knowl- waste, defined by Fuchs (2009a) as any intervention with
edge—to identify the best plan, which may be to do nothing expected costs greater than expected benefits, is rampant in
(Barry and Edgman-Levitan 2012). Too often, patients have healthcare. Estimates of wasteful spending on healthcare in
little input into critically important decisions that directly af- the U.S. range between one-quarter and one-half of total
fect them (Mulley et al. 2012; Dobler et al. 2017). spending (Cutler 2018). If one assumes that one-third of med-
Still another profound distinction of healthcare is the array ical spending is wasteful, then the aggregate cost of this waste
of challenges and stresses for those providing the service. In is about 6% of the gross domestic product, which is two-thirds
no other service role does a service provider sometimes have of the total revenue raised by individual households’ federal
to tell individuals that they have an incurable disease. In only a income taxes (Cutler 2018). Excessive wasteful spending in
few service roles, medical care being one, can a provider’s healthcare is robbing American society of financial resources
mistake cause the customer severe harm, including death. to address other societal needs. Fuchs (2018) concludes that
AMS Rev (2019) 9:78–92 81

reducing healthcare spending by 10% would generate $330 institutional self-confidence; and including patients and fam-
billion for other societal uses. ilies on the innovation team.
Administrative and operational waste are primary culprits,
along with high prices for pharmaceuticals and physician ser- Viewing continuous innovation as a non-negotiable
vices, compared to figures from other industrialized countries cultural goal
(Cutler 2018). Administrative waste results from a complicat-
ed, inefficient employer-and-government–based insurance The culture of an organization is defined by how individuals
system and documentation overload, among other factors in it behave; culture needs to be role-modeled and nurtured
(Fuchs 2009b). A report from the American Hospital every day. A study of the 40 largest U.S. health systems re-
Association concludes that the average-size U.S. hospital uses vealed that 32 had established an executive position of chief
59 full-time employees to perform administrative tasks related innovation officer (Jain and Schulman 2018). Depending on
to regulatory compliance, at an annual cost of $7.6 million how the role is conceptualized and structured—and the capa-
(O’Shea 2018). Approximately 25% of total U.S. healthcare bilities of the person in the role—this can be a positive step.
spending goes to administrative costs, three times what is However, such a step also can backfire because innovation is
spent on cancer care (Cutler 2018; Cutler et al. 2012). the responsibility of everyone in the organization and cannot
Contributors to operational waste include inefficient pro- be delegated to a specific department. The spirit of
cesses; duplication of services related to poor care coordina- innovation—creating more value by improving on what
tion, especially for older patients who see multiple physicians exists—must start with the CEO and flow all the way down
for different illnesses; medically unnecessary use of more- to the frontlines of the organization, where knowledge of in-
expensive specialists, services, and equipment; medical errors; efficiencies, flawed processes, and customer needs and wants
and overtreatment (Stey et al. 2018; Berry et al. 2013; often is greatest (Toussaint and Berry 2013). As one health
Berwick and Hackbarth 2012; Fuchs 2009b; Bentley et al. system chief innovation officer put it, “If the CEO doesn’t
2008; Bush 2007; Welch et al. 2011). Supply increases de- own innovation, the organization will eat it alive…The CEO
mand in healthcare, contrary to virtually all other services in has to own it, drive it, and value it” (Jain and Schulman 2018).
which demand increases supply. The Dartmouth Atlas of In 2009, the president and CEO of MedStar Health, a large
Healthcare project has shown, empirically, that more physi- integrated health system serving the District of Columbia and
cians or hospital beds in a geographic market lead to more Maryland, sponsored the creation of the MedStar Institute for
medical services provided on a per capita basis—with no im- Innovation (MI2), a unit whose mission is “to catalyze inno-
provement in population health (Bynum et al. 2016.) vation that enhances health” (Samet and Smith 2016, p.7). If a
Still another important source of waste is healthcare’s dis- dedicated innovation department or institute is to be
proportionate emphasis on sick care rather than helping people established in the organization, MI2 offers a good example
stay well. As Shortell (2016 p. 1223) writes, “Disease preven- of how to do it, as its purpose is to tap into the underutilized
tion initiatives aimed at improving nutrition, physical activity, innovation energy and talent within the organization—that is,
tobacco use, and related lifestyle behaviors are likely to have to turn potential innovators into actual innovators. The MI2
the greatest effect on slowing the annual increase in healthcare group offers online courses on topics such as creative think-
costs.” The best way to bend the cost curve in healthcare is to ing, created an app that features a series of tools and ap-
keep people healthy. proaches to facilitate innovative problem solving, and offers
monthly “All Minds Meetings” consisting of TED-type pre-
sentations and “Thinking Differently” day-long sessions of
Toward a culture of innovation innovative exercises and speakers. The MI2 group also con-
sults internally with departments or teams that are working on
Healthcare in the U.S. requires bold innovation. It costs too a difficult problem (Samet and Smith 2016). MedStar’s efforts
much, wastes too much, harms its customers too often, and are instructive in showing the potential of investing in an
can drain the joy of serving. A number of individual organizational unit of innovation champions that focus on
healthcare organizations are proving that true value-creating strengthening a “bottom-up” innovation culture. The MI2
innovation can bring profound improvements to the market. group is innovative in nurturing innovations.
But the healthcare delivery sector as a whole is playing de- Innovative organizations embed in their cultures an unre-
fense rather than offense, reacting to market turbulence by lenting attitude that continuous innovation is an imperative,
getting bigger through mergers and acquisitions rather than not an option. Business entrepreneur and historian Gary
investing in getting better (Fulton 2017; Gaynor et al. 2015). Hoover commented in a class lecture that “consumers will
Achieving service innovation in healthcare must be an orga- always get what they want. The only questions are: who will
nizational cultural priority, including viewing continuous in- give it to them and when?” Innovative service organizations
novation as a non-negotiable cultural goal; prizing embrace the challenges of initiating changes within their
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control to respond to changes beyond their control. The goal is rather than physically moving patients. Telemedicine can bring
to achieve a good fit between what and how target customers care directly into a patient’s home and can be especially valuable
buy and what and how the organization markets to them. Such to patients who are non-ambulatory, live far from in-person med-
innovation is a necessary ingredient for successful ical assistance, or have chronic diseases that require regular mon-
competition. itoring (World Health Organization 2016; Berry et al. 2003,
2014; Topol and Hill 2012; Barlow et al. 2006). Information
Why an innovation culture is imperative in healthcare The technology in general, and telemedicine in particular, when
imperative to innovate continuously comes in many forms, well-designed to meet the needs of patients and those who serve
including the aforementioned egregious waste, declining per- them, can improve the productivity of labor- and skill-intensive
formance, loss of talent, the emergence of nontraditional com- healthcare services that have long been assumed to be invulner-
petitors, and advances in technology and in the new service able to productivity gains. The application of robotics in combi-
options those advances make possible. Healthcare is nation with artificial intelligence, big data, and other technologies
experiencing all of those pressures. Many community hospi- in healthcare is underway—with the aims of bolstering clini-
tals are closing (Frakt 2018); burned-out clinicians are cians’ knowledge to improve diagnosis and treatment of patients,
performing less effectively, and some are retiring early and increasing the productivity and convenience of service de-
(Shanafelt et al. 2015; Tawfik et al. 2018); and nontraditional livery (Habran 2018; Bhardwaj 2017; Wirtz et al. 2018).
competitors (such as employer-based and retail store–based Diabetic retinopathy (DR) is the leading cause of blindness
medical clinics) are gaining market share from conventional among U.S. adults of working age (Cheung et al. 2010). Early
primary care clinics for treating low-acuity illnesses (Mehrotra detection and treatment of diabetes can prevent blindness from
2013; Berry et al. 2014). DR, yet many individuals with diabetes do not receive these
In a much publicized move, Amazon, Berkshire Hathaway, services in a timely manner, if at all (Daskivich et al. 2017).
and JP Morgan Chase announced plans in 2018 to form an Especially vulnerable are lower-income underinsured or unin-
independent company to directly provide healthcare for its U.S. sured patients. The Los Angeles County Department of Health
employees—clear evidence that these firms (and many others) Services, the largest publicly operated county health system in
are tired of waiting for healthcare quality to improve and costs to the U.S. serving low-income patients, developed a tele-retinal
decline (Wingfield et al. 2018). CVS Health operated 9800 retail screening program offered through primary care offices as a
drug stores and 1100 in-store medical clinics in 2018. It also is a way to improve screening rates and their timeliness, given the
major pharmacy benefit manager (PBM) overseeing the prescrip- average wait time for an in-person examination by an eye-care
tion benefit plans affecting approximately 94 million consumers. specialist of 8 months or more. Specifically, the department
In 2018, it announced plans to merge with Aetna, America’s established a retinal photography clinic, staffed by medical
third-largest health insurance company with 22 million members. assistants and nurses who are trained and certified to take
The proposed goal is to greatly expand convenient patient access digital retinal images, and then upload them, using web-
to a broadening array of healthcare services (likely to happen) based software for eye-care specialists to review. Patients are
and to lower the costs of healthcare (doubted by many, due to scheduled for this service in advance by their primary care
stifling of competition) (Abelson 2018; Frakt and Garthwaite clinic. This service innovation has reduced wait times for
2018). What is occurring for sure is that intertype eye-care specialist appointments by 89% (by moving patients
competition—competition for the same customer among dissim- with normal eye exams out of the queue for specialist appoint-
ilar competitors—is impacting healthcare. The need for bold ments) and has increased annual rates of screening for DR by
innovation that offers superior benefit to patients and those 16% (Daskivich et al. 2017).
who serve them has never been greater. Kaiser Permanente Northern California (KPNC), serving
more than 3.4 million patients, offers more than 100 online
How technology can contribute to the innovation imperative services (including video), enabling patients to remotely view
Technology is having a dramatic effect on healthcare delivery, their personal medical records, make appointments, request
transforming some services from inseparable to separable. prescription refills, securely communicate with clinicians via
Telemedicine services employ information communication tech- email, and in certain cases be diagnosed. For example, patients
nology to deliver healthcare services remotely. These rapidly with a rash can email a digital image of it to a dermatologist
growing services fall into two subcategories: technology used and receive a definitive diagnosis 80% of the time. More than
for diagnosis and communication among clinicians, and technol- 70% of patients have registered on KPNC’s website to use
ogy used between clinicians and patients (Christensen 2018). remote services, and internal surveys indicate widespread pa-
Patients need assistance, but they do not always need an in- tient satisfaction with their use (Pearl 2014).
person visit with a clinician to receive it. Telemedicine services, Dexcom, a commercial firm, has developed an app that con-
ranging from telephone communications with a clinician to re- tinuously monitors individuals’ glucose levels using any
mote internet-based diagnoses, electronically move information smartphone. The app sends an alert to individuals when their
AMS Rev (2019) 9:78–92 83

glucose spikes, for example, after a meal, thereby prompting flexibility, and inclusiveness would strengthen the culture of
them to engage in physical activity such as taking a walk. Use innovation in U.S. healthcare organizations.
of this app has resulted in improved hemoglobin A1C levels (the
standard test for diabetes), helping some patients reduce the need Prizing institutional self-confidence
for medication and even lose weight (Zane and Wiler 2018).
Thomas Jefferson University Hospital, in Philadelphia, de- An organization’s self-confidence is a critically important but
veloped a virtual reality simulation of radiation therapy to help generally unrecognized building block of an innovation cul-
defuse the anxiety and fear of cancer patients before their first ture. In a previous field study of three innovative, high-
radiation treatment. Patients who experience the simulations performance health systems in Wisconsin—Gundersen
are significantly less anxious and have a better understanding Health in La Crosse, ThedaCare in Appleton, and Bellin
of the treatment than patients who only receive traditional Health in Green Bay—I observed institutional self-
preparation for their radiation experience that typically in- confidence facilitating unconventional thinking and bold ser-
volves being apprised of benefits, risks, and side effects vice. These three independent, nonprofit, integrated health
(Marquess et al. 2017). systems had the confidence to compete with larger health sys-
tems in major markets for medical talent; to actively learn
How cost plays a role Service innovation may also be from patient advisory boards, community partners, quality-
prompted when the cost of conventional service is unafford- improvement organizations, and researchers such as myself;
able. This brings up the topic of jugaad, a frugal, flexible, and to publicly post their medical performance outcomes on-
inclusive approach to innovation increasingly applied to de- line. They believed they could control their destiny by focus-
livering healthcare in countries, such as India, with vast num- ing on becoming better, not necessarily bigger, than compet-
bers of low-income families living in remote villages. The itors. Their cultures favored asking “why not?” over “why?”
Hindi term jugaad combines improvisation with pragmatism Institutional self-confidence is energizing and motivating,
to get more from less in providing healthcare to people who essential to innovation because maintaining the status quo
might not otherwise have any access to it (Prabhu and Jain requires less organizational energy than pursuing improve-
2015). The jugaad approach starts with deep understanding of ment (Samet and Smith 2016). Such confidence is closely
the resource constraints and barriers to the conventional and aligned with optimism rather than arrogance. As Samet and
looks for unconventional solutions to overcome them. Smith (2016, p. 5) write, “An innovation mindset is optimistic
Dr. V. Mohan, a renowned diabetes specialist in India, wanted because it comes from a core belief that the future can be better
to help people in the country’s rural areas with limited access to than the present and that there is always a better way of doing
healthcare who have diabetes or are at risk for the disease something….” Gundersen, ThedaCare, and Bellin exemplify
(Radjou et al. 2012). Dr. Mohan’s jugaad solution was a large the institutional self-confidence and optimism that are vital to
mobile van (donated by the World Diabetes Foundation) that success in today’s tumultuous healthcare climate.
would travel from village to village outfitted with medical equip- Gundersen has developed one of the nation’s most compre-
ment and a satellite dish to transmit images. Village residents hensive, progressive care-coordination programs to better
have an image of their eye taken and transmitted to a physician serve patients with complex health profiles. Experienced,
in the main clinic, enabling a prompt diagnosis that is sent back subspecialty-trained nurses, the “care coordinators,” abetted
to a local health volunteer in the van. The patient is informed if by a system-wide electronic medical record, have regular per-
disease is present and, if so, given the doctor’s advice on man- sonal contact with patients assigned to them and with their
aging it. The patient returns for checkups when the van returns. doctors in both hospital and outpatient clinic settings. The care
The health volunteers are selected and trained at Dr. Mohan’s city coordinators ensure that patients are well informed about their
hospital and then return to their village to perform this role medical conditions and treatments and have a “go-to” advo-
(Prabhu and Jain 2015). cate, and that clinical care across multiple clinicians is coor-
Jugaad, born of necessity in India, is highly relevant to dinated. Gundersen’s care-coordination program, started in
wealthier industrialized countries, including the United 2003, is associated with reduced costs (including fewer emer-
States. U.S. healthcare needs to do more with less, too. gency department visits and hospitalizations) and improved
Imagine if, within a 10-year period, a total of $1 trillion of patient satisfaction (Berry et al. 2013).
annual healthcare spending could be returned to society for ThedaCare launched a “collaborative care” model in 2007,
other uses without compromising healthcare quality. The to mitigate the fragmented care that often occurs in hospitals.
aforementioned Los Angeles County tele-retinal screening A four-person team comprising a doctor, nurse, bedside phar-
program for low-income residents, among many other exam- macist, and discharge planner (often a social worker) collab-
ples, illustrates the opportunity for jugaad in the United orates among themselves and with the patient and family to
States. U.S. healthcare needs a jugaad philosophy adapted create a single care plan that is regularly updated in team
to, and thus workable, in American society. Such frugality, huddles. The team takes the patient’s history at hospital
84 AMS Rev (2019) 9:78–92

admission, conducts a physical assessment, estimates a dis- clinicians who themselves become seriously ill confess that
charge date, and develops a treatment plan to meet that dis- their illness experience helped them understand the realities of
charge target. The team huddles in specifically designed work being a patient and the importance of learning from the patient
stations outside the patient’s room before and after the patient at a deeper level than they would have done before getting
visit, updating the care plan as necessary. The presence of a sick (Awdish 2017; Garnick 2018; Stern 2018).
bedside pharmacist, supported by computerized pharmaceuti- True patient-centeredness involves clinicians’ determining not
cal databases, has improved medication safety. As one phar- only what is the matter with the patient, but also what matters to
macist told me, “80% of the efficacy is being there, seeing the the patient (Barry and Edgman-Levitan 2012). Some health sys-
patient. When all I see is paper, I lose all of that.” ThedaCare’s tems incorporate the patient’s voice into collective conversation
collaborative-care model has reduced the cost per case and the and cultural awareness by beginning each management meeting
average length of stay—and has improved patient satisfaction with stories of patient experiences, positive and negative. Some
and clinical quality performance measures (such as reducing health systems form patient advisory boards (which may include
the incidence of hospital-acquired pneumonia) (Berry and patients’ family members). Kaiser Permanente is an active user
Dunham 2013; Bielaszka-DuVernay 2011). of such advisory boards, and its cancer program, for example,
For most of its more than 100 years of operation, Bellin uses oncology advisory councils in various regions and includes
Health did not provide oncology treatment, other than surgery. patients on process-improvement teams for each cancer type.
Cancer patients received outpatient treatment from private Kaiser Permanente administrators report that using patient advi-
practice clinics. In the early 2000s, however, a combination sors speeds up needed change by prioritizing improvements and
of factors, including concerns expressed by Bellin’s surgeons energizing the staff. Oncology program changes influenced by
and patients about the quality and timeliness of oncology care patient advisors include expanding the use of nurse navigation
that was available, prompted Bellin’s management to decide services and improving interactive patient-education materials,
to build an integrated cancer center from scratch, a consider- decision-making aids, and service timeliness (Berry et al. 2018a).
able strategic investment. Bellin’s board approved the idea Institution-patient-family teamwork is one source of service
contingent on management’s bringing back a strategy that innovation; clinician-patient-family teamwork is another. Few
would substantially improve the quality of oncology care al- life experiences are crueler than pediatric cancer, but this blatant
ready available in the market. Management then conducted unfairness motivates some of the most empathetic creativity to be
consumer research that informed the planning of an integrated found in all of healthcare (Berry et al. 2018b). Empathy is view-
cancer practice housed in an innovatively designed, freestand- ing the situation from another’s perspective, avoiding judgment
ing facility with ample parking. All nonsurgical oncology ser- when assessing the situation, recognizing emotion, and
vices would be provided in the new facility—a “one-stop responding in a caring manner (Wiseman 1996). Effectively
shop.” Patients indicated in the research that they did not want serving a child who 1 day is riding a bicycle and playing with
to go to the hospital campus for their chemotherapy and radi- friends and the next is undergoing an MRI scan (to find
ation treatments, prompting a decision to build the cancer suspected cancer) requires empathetic creativity. Pediatric clini-
center several miles away from the hospital. Bellin opened cians and staff have derived clever ways to reduce a child’s fear
its center in 2008 and surpassed its five-year growth and rev- of a procedure or treatment, including teaching the patient who
enue targets in 2 years. Surveyed regularly, nearly 100% of fears needles to paint with a toy syringe or having the patient
patients indicate they are “highly likely” to recommend role-play chemotherapy by infusing a stuffed animal outfitted
Bellin’s oncology services to others (Berry et al. 2015). with a port (Berry et al. 2018b).
The Peter MacCallum Radiation Center, in Australia, illus-
Including patients and families on the innovation trates the potential impact of clinician-patient-family innova-
team tion. One parent of a child with cancer recounts: “My son had
general anesthesia for radiation therapy, but as he felt a lot of
Another building block of an innovation culture in healthcare anxiety about this procedure, the team would allow him to sit
is using patient and family knowledge to spur improvement. on me during anesthesia. They also noticed that when he woke
Authentic encouragement to those being served to share ideas up, he got upset about lacking a shirt. Now the team puts his
openly and safely, sparking the imagination of others, is a shirt back on before he wakes.…To me, these small acts were
critical factor in service innovation. Service innovations that the ultimate kindness, reducing his anxiety and distress and,
make a positive difference, from small operational improve- therefore, my own” (Berry et al. 2017b). This same patient,
ments to strategic advances, are more likely when customer whom I will call “Ben,” was understandably anxious during
input is valued (Gill et al. 2017; Lee et al. 2015). Healthcare is long hospital stays. To reduce his anxiety, Ben’s parents and
for patients, and healthcare innovation requires their input— the clinical team discussed his likes and dislikes and drafted a
their ideas, concerns, needs, and wants—expressed from the list called “Ben’s treatment rules,” which was placed on his
basis of their experiences and self-knowledge. Invariably, hospital room door. The list included Ben’s preference for
AMS Rev (2019) 9:78–92 85

silence during procedures and for minimizing the number of

people in his room at one time (Danaher et al. 2017). This low- Orchestrating
Experience
tech solution codified what mattered to Ben and improved his Clues
service experience.
Service innovation is urgent in healthcare. Now more than
ever before, healthcare institutions need to invest in the will
and capability to improve operationally and strategically as Creating Coordinating
Enabling
they aim to deliver a better return to their stakeholders, starting Community Cancer
Connection
Partnerships Services
with the patients. Continually improving clinical and service
quality while simultaneously reducing wasteful spending are
complementary efforts in building an organizational culture
where value-creating innovation is non-negotiable, the confi-
Valuing Care
dence to try prevails, and patients’ and family members’ Continuity
learned experiences and priorities are heard. Choosing be-
tween quality improvement and cost reduction is no longer
an option; healthcare needs both, now. The examples present- Fig. 1 Five C’s of cancer service
ed thus far show that it can be done. But these are pockets of
excellence in the healthcare industry that can—and must—
proliferate. I now turn to explore, in more detail, a sector of Coordinating cancer services refers to pooling interdisci-
healthcare where the opportunity for inspired service innova- plinary knowledge to fulfill cancer patients’ clinical, psycho-
tion is especially pronounced—namely, cancer care. social, spiritual, and other needs and desires in a coherent,
coordinated way. Both clinical and more-holistic coordination
is needed. As one oncologist said, “Most cancer care in com-
Service innovation in cancer care munities is fragmented….a cancer patient may see a surgeon,
radiation and clinical oncologist separately.” Another oncolo-
My most recent research focuses on how to improve the service gist observed, “Oncology practice provides treatment, but this
journey cancer patients and their families undergo, from initial is a fraction of the patient’s needs.” And an oncology nurse
diagnosis through treatment, post-treatment and, in some cases, noted, “Where we lack is holistic care: psychosocial, nutrition,
end-of-life care. The research included phase-one “key infor- sexuality. Treat the whole patient.”
mant” interviews with cancer patients, family members, and Utah-based Intermountain Healthcare offers “multidisciplin-
oncology clinicians, among others, followed by phase-two site ary clinic” days to address to the issue of uncoordinated cancer
visits to eight progressive cancer centers, a hospice, and a com- care. Typically within a week of being diagnosed, patients (often
munity health center. The goals were to identify service short- accompanied by family members) have a full-day appointment
falls in cancer care in phase one and to study innovative solu- where they sit in a meeting room and are visited separately by
tions in phase two. More than 300 people were interviewed in members of the care team: surgeon, medical oncologist, radiation
the two phases, and all quotations in this section of this article oncologist, nutritionist, social worker, and a nurse navigator who
come from those conversations. My work was inspired by the helps coordinate the sessions. The care team meets early in the
aforementioned Wisconsin study that included observation and day to discuss the patients’ cases and agree on tentative treatment
interviews at two innovative cancer centers. plans, subject to modification once they visit the patients. Patients
The research enabled me to develop a framework for orga- receive a written care plan that includes scheduled appointments
nizing innovative service approaches in cancer care. I call it (Berry et al. 2015).
the “Five C’s of Cancer Service”: coordinating services, or- Orchestrating experience clues refers to managing the
chestrating experience clues, enabling connection, valuing many signals (clues) patients and families detect as they ex-
care continuity, and creating community partnerships (see perience the service that providers offer. Well-managed clues
Fig. 1). “Cancer” may be the scariest word in all of healthcare; can create positive feelings, such as trust and hope. Poorly
not surprisingly, then, cancer care has all of the characteristics managed clues can exacerbate negative feelings, such as anx-
of a high-emotion service: customer unfamiliarity with the iety and fear. The more important, variable, complex, and
service, lack of control over its quality, significant conse- personal a service is, the more clue-sensitive customers are
quences if things go wrong, service complexity that gives likely to be. Few, if any, services reflect these characteristics
the provider the upper hand, and the reality that the service more than cancer care (Berry et al. 2016).
comprises many discrete events over a long period (Berry Three types of clues need to be managed (Berry et al.
et al. 2015). High-quality care in cancer is about more than 2006b). Functional clues convey the technical quality or com-
the science; high-quality service is essential, too. petence of the service. Anything in the experience that—by its
86 AMS Rev (2019) 9:78–92

presence (e.g., a timely appointment) or absence (e.g., missing can be partially mitigated through accessible, reliable, custom-
records)—signals the level of competence is a functional clue. ized assistance. Just knowing that help is available when need-
As an oncologist noted, “When you have cancer, you don’t ed helps defuse negative emotion (Berry et al. 2015). A patient
want to hear that ‘we can get you in in two weeks’.” Mechanic explained: “I had to go to the ER on a weekend three weeks
clues are emitted by stimuli associated with tangibles in the ago. I had a high fever and couldn’t reach the doctor.” The
experience, such as the design of the service facility. A cancer patient’s father then chimed in: “You can’t get sick during the
center president explained: “You can go through the building, weekend. No one is around.”
and you don’t think there are 10 patients in it. But right now Connection can be proactive (the provider initiates contact)
there are probably 100 patients in the facility. It was designed or reactive (the patient or family initiates contact). Henry Ford
to create a sense of privacy.” Humanic clues come from peo- Cancer Center pharmacists telephone all patients taking oral
ple, primarily service providers, in their body and verbal lan- chemotherapy drugs at home at least once a week to monitor
guage, tone of voice, level of enthusiasm, and appearance. As side effects, answer questions, and make sure the drugs are
a cancer patient said, “Nurse Nancy is very kind and sympa- being taken appropriately. Oral chemotherapy is more conve-
thetic. She hugs me. She told me, ‘Don’t worry, the tumor is nient for the patient, but it is not safer just because it is in pill
not so big’…she didn’t use medical words; she uses words form. A similar example of proactive, medication-related con-
[that are] easy to understand” (Berry et al. 2015). nection comes from Kaiser Permanente, which places its in-
Language is an especially powerful type of humanic clue in fusion pharmacies (where chemotherapy drugs are prepared)
healthcare service. As one cancer patient explained, “Patients right next to the chemotherapy treatment areas. This proximity
are ultra-sensitive to the doctor’s words as clues to whether allows infusion pharmacists to easily enter the treatment
they will live or die.” I asked cancer clinicians if there were spaces to meet their patients, answer questions about side
any words or phrases they would never use with a patient. All effects and other matters, and build relationships. Patients
respondents shared at least one “never phrase,” including the have a direct phone line to the pharmacy, obviating the need
following (Berry et al. 2016): to go through a call center.
Henry Ford’s Cancer Center has placed “OncoStat clinics,”
“There is nothing more that we can do for you.” (implies a strategic innovation, throughout its market area to offer time-
abandonment) ly access to patients suffering from the disease or treatment
“You are lucky it is only stage 2.” (trivializes a serious side effects. Clinicians specializing in cancer care have access
medical condition) to patients’ electronic records, which may not be the case in an
“Why did you wait so long to come in?” (creates a emergency room. The OncoStat clinics, an example of “reac-
feeling of guilt) tive connection,” have improved both patient access to con-
“Let’s not worry about that now.” (not answering in- venient urgent care and clinical flow in the main cancer center
creases anxiety) because there are fewer nonscheduled patients requiring care
“You failed chemo.” (suggests the patient is at fault) (Berry et al. 2018a).
Valuing care continuity refers to viewing cancer as a life-
An affirming example of the power of humanic clues is this changing journey for patients who require ongoing care,
story of clinician-patient-family innovation: An elderly, frail aligned with the patients’ and families’ needs and desires.
man with advanced incurable cancer had a lifelong dream of The end of primary cancer treatment does not mark the end
making a family pilgrimage to Mecca. With curative treatment of patients’ need for assistance, whether with physical symp-
off the table, the oncologist’s discussions with the patient and toms (such as fatigue, chronic pain, or long-term treatment
family centered on the risks of a strenuous journey versus side effects) or mental and emotional manifestations (such as
missing the last opportunity to fulfill a dream. The oncologist when the cancer is life-limiting or when prognosis is good but,
and care team prepared the patient and family for the trip, both as research has documented, patients fear recurrence) (Doyle
medically and logistically, as well as possible. The patient and 2008; Aziz and Rowland 2003; Cheng et al. 2005; Mellon
his family made the journey and returned. The patient passed et al. 2006). One patient echoed many others with this com-
away 3 months later, but a treasured family experience had ment: “There is anxiety when therapy comes to an end and
been realized (Berry et al. 2017b). you are ‘cut loose.’ I am seven years out now and still anxious
Enabling connection refers to enhancing patients’ and fam- before a mammogram. No one prepared me for that.”
ilies’ sense of control by facilitating their connections with the Seton Medical Center’s cancer practice established an inno-
assistance they need when they need it. A cancer diagnosis vative cancer survivorship clinic to serve patients 2 years post-
turns a person’s world upside down, transferring a consider- treatment and beyond. Staffed by an internist specializing in the
able degree of control over his or her daily life to the care team late effects of cancer treatment and a nurse coordinator, the Seton
and institution. Cancer also is likely to greatly affect the pa- Cancer Center, based in Austin, Texas, offers post-treatment pa-
tient’s family. Stress related to the perceived lack of control tients care continuity in cooperation with patients’ primary care
AMS Rev (2019) 9:78–92 87

physician and oncology team, as needed. The survivorship clinic face more substantial challenges in the foreseeable future.
provides post-treatment services that are uncommon in primary Healthcare in the U.S. (and elsewhere) needs the expertise, ob-
care—for example, bone-density testing for younger adult pa- jective reasoning, and fresh ideas—unpolluted by politics—that
tients, checking endocrine levels, and doing skin assessments. marketing academicians can offer (Berry and Bendapudi 2007).
The survivorship clinic team is best equipped to reassure patients Researchers with deep knowledge in services, consumer behav-
when no signs of recurrence are evident. ior, data analytics, qualitative research, and other specializations
Creating community partnerships refers to mobilizing com- have so much potential to contribute to more-efficient and effec-
munity resources to help ease the path for cancer patients and tive healthcare delivery, thereby benefiting individuals, commu-
their families. A cancer practice cannot adequately address all nities, corporations (which pay for a lot of healthcare), the econ-
of the medical or related non-medical needs that can arise for a omy, and society as a whole.
patient and family members when cancer strikes. For example, Academic marketing can play a much bigger role in
medical expenses can devastate a household’s financial stabil- conducting research that moves healthcare forward, that tests
ity, even for patients with health insurance. Community finan- and refines innovations that benefit patients and the profes-
cial support is necessary for a cancer center to help patients in sionals who serve them, and that improves quality while re-
financial distress. Numerous studies have documented the fi- ducing waste. Seizing this opportunity will not be easy, how-
nancial hardship faced by many families who confront cancer ever. Because healthcare is a unique, complex constellation of
(Meeker et al. 2016; Shen et al. 2017; Chino et al. 2018). services, it presents an intellectually challenging domain of
Many lower-income patients lack transportation to and from investigation. Researchers will need to make an ongoing com-
medical appointments and would be helped by community mitment to studying healthcare; to reading the relevant litera-
philanthropy to fund gasoline cards, taxi, or Uber/Lyft ser- ture in medicine, clinical care, and health policy; and to spend-
vices. An oncology nurse explained, “We see a lot of inner- ing time in healthcare organizations, interacting with and ob-
city patients who start treatment but don’t finish. serving clinicians and others who deliver the services on the
Transportation is an issue. Buses are unreliable, and some front lines. They will need to develop a network of collabora-
don’t have family to bring them.” A husband of a cancer tors from inside healthcare, in order to benefit properly from
patient said: “I had to leave my job to help my wife. All our their experiences and knowledge as pertinent studies are de-
savings went. I wish they could help a family struggling signed and influential articles about the research findings are
financially.” written. Academics in the marketing field also must seek to
Newly diagnosed patients could benefit enormously from a publish in the journals that clinicians, thought leaders in med-
community “buddy” system (organized by the cancer center) icine, and healthcare policymakers read, in addition to the
whereby a trained community volunteer who is post-treatment marketing and business journals read by their own colleagues.
for a similar cancer counsels the new patient on what to expect Marketing academics increasingly use healthcare as a set-
and related concerns. The University of Alabama Birmingham ting for a particular study. To make a more meaningful con-
Health System has implemented an innovative program in tribution requires moving from referring merely to the broad
which “lay” (peer) volunteers from the community provide context of healthcare to focusing intently and deliberately on
patients and families emotional, informational, problem-solv- healthcare as part of a career research trajectory, from devel-
ing, and logistical assistance. The program has significantly oping research projects to scoping and sequencing well-
improved patient satisfaction and reduced overall costs of care delineated research paths. A research project is a singular
(Rocque et al. 2016, 2017; Berry et al. 2018a). event that may have inherent value but that typically has lim-
More than 1.7 million people in the U.S. were newly diag- ited influence on its own; a research path is a series of related
nosed with cancer in 2018 (Cancer Facts and Figures 2018). projects that build on one another cumulatively in order to
Sooner or later, directly or indirectly, cancer touches most of more comprehensively address an important matter. In short,
us. Easing the path of cancer patients and their families a research path has greater potential impact because it reflects
through meaningful service innovation is an opportunity that an ongoing commitment to advancing knowledge and then
is still far from being fully realized. As one cancer center applying that knowledge in practice.
administrator said, “We cannot always control the clinical out- Given the need to make tenure in a research-oriented business
come, but we can control the patient experience.” school, the opportunity to commit to a research vocation in
healthcare may be more practical for tenured marketing faculty.
Many talented marketing academics are well-positioned to make
How academics in marketing can contribute this commitment if they wish. Commitment, not talent, is where
to healthcare innovation the deficit lies—for now. Even so, tenured faculty can groom
junior faculty who share their desire to contribute to the
Few, if any, services influence people’s quality of life more than healthcare literature, including partnering on projects that fit a
healthcare. No other type of service uses more resources or will junior faculty member’s overall research program in services,
88 AMS Rev (2019) 9:78–92

consumer behavior, or other specializations. In effect, pre-tenure HMO’s rise and fall would be likely to reveal lessons to
projects can become post-tenure paths. guide future innovations and avoid repetition of mistakes.
A number of comprehensive research agendas have been The fundamental idea of keeping people healthy was
published that are relevant to healthcare service innovation sound; the idea’s execution was not. Figuring out why,
research, including healthcare delivery (Berry and from a marketing perspective, the implementation largely
Bendapudi 2007), service innovation (Helkkula et al. 2018), failed is an area worthy of exploration.
service design and innovation (Patricio et al. 2018), customer
experience (Lemon and Verhoef 2016; Bolton et al. 2018), Service innovations that succeed If the failures are worth
organizational climate (Bowen and Schneider 2014), and studying, the successes in healthcare services innovation ob-
others. These research agendas appropriately offer an array viously are, too. At the 2018 Institute for Healthcare
of investigative questions or projects that represent useful Improvement (IHI) National Forum, Jason Leitch, National
starting places for longer-term efforts. Below I outline a set Clinical Director of Healthcare Quality and Strategy for the
of five research paths that directly relate to the subject of this Scottish Government, discussed a patient feedback innovation
article, service innovation in healthcare. from Scotland called “Care Opinion.” The innovation allows
patients (and their families) to tell a story of their healthcare
Service innovations that fail The study of innovation is central experience online, to which clinicians have the option of
in marketing. Researchers can learn lessons that inform future responding. Leitch reported that 96% of the stories receive
healthcare innovations by linking what is known about inno- such a response. In one story, the mother of an infant in the
vation in the fields of marketing and business with dedicated neonatal unit was concerned that the strong perfume worn by a
analysis of important healthcare innovations that have not nurse in the unit could be harmful to her newborn. The chief
succeeded. Investigations that are specific to healthcare will nursing officer at that hospital saw the story and, in just a few
be crucial to conduct, given the uniqueness of many of hours, implemented a no-perfume policy in the neonatal unit.
healthcare’s features (e.g., its payment system, competing This is, of course, a small operational improvement, but anal-
vested interests such as insurers versus hospitals). Failed in- ysis of the marketing angle has tremendous potential. Think of
novations offer fertile ground for investigation. it: a nationwide patient-provider communications network
Consider, for example, health maintenance organizations with a 96% provider response rate, and a new hospital policy
(HMOs), an especially promising innovation that was designed implemented within a few hours—the keen expertise of mar-
to improve health and reduce wasteful spending. One key inno- keting academicians would be valuable in exploring the how
vation was “pre-payment” of an HMO with a risk-adjusted, flat, and why of this successful innovation (and others). Ongoing
per capita (capitated) fee for all of the care that the HMO provid- study of healthcare innovation successes, both operational and
ed to patients (Mirabito and Berry 2010). Using this payment strategic, is likely to unearth useful lessons both for the
innovation, instead of the conventional “fee-for-service” struc- healthcare field itself and, complementarily, for the marketing
ture (which incentivizes “sick care” rather than “well care”), and business literature on innovation.
created an incentive for HMOs to invest in preventive health to
keep patients well and for their primary care doctors to consider Marketing and measuring need services Most service re-
more carefully whether a patient really needed a specialist referral search focuses on services that customers want to buy—
or a particular diagnostic test. The HMO movement expanded what they desire. Healthcare services research would benefit
rapidly in the 1980s and 1990s, but it then lost momentum and from greater attention to improving the marketing of services
fell into disfavor (Coombs 2005). Some HMOs remain success- that people need but do not want. For instance, how do you
ful in the U.S., but what once appeared to be the new prevailing market screening tests, such as mammography and colonos-
model for healthcare never came close to realizing its potential. copy, to people whose doctors recommended them? How best
The HMO movement faltered in large measure because do you educate the general population on how to quickly
of a growing perception, by both patients and physicians, detect the symptoms of a possible stroke and get needed treat-
that cutting costs was taking precedence over improving ment given the short time window in which strokes can be
people’s health (Kao et al. 1998; Grumbach et al. 1999). most effectively treated? How do you best engage people to
This perception was reinforced by the reality of internal take their prescribed medications? These services are needed,
pressures on doctors in certain organizations (including but often ignored, making customer persuasion (a basic goal
some for-profit HMOs) to withhold specialist referrals, of marketing) a difficult task. Healthcare needs to learn how to
tests, and procedures that may not be needed. Stakeholder improve its persuasion capabilities so that services with
trust is essential in healthcare, and HMOs lost much of it evidence-based benefits can be used optimally, without
over time (Robinson 2001; Grumbach et al. 1999; Mirabito underuse or overuse. This work is crucial for improving indi-
and Berry 2010), leaving fee-for-service as the predomi- vidual and population health, and marketing researchers have
nant method of payment today. Careful analysis of the an important role to play.
AMS Rev (2019) 9:78–92 89

A related, also promising, research path is the measurement of available education and housing, early childhood development,
patient satisfaction and service quality in healthcare. income levels that provide for basic needs and personal dignity,
Conventional measurement approaches used in academic mar- social support, nutrition and physical activity, and other factors—
keting fit “want” services better than “need” services. I have far outweigh clinical care in influencing overall health and how
observed many such examples in my healthcare studies. A doctor long a person lives (Marmot 2015; McGinnis et al. 2002).
I observed as he worked with patients said to one patient, gently, In a compelling presentation at the 2018 IHI National Forum,
“You wouldn’t feel that you had a full experience if I didn’t Dr. Donald Berwick, a renowned leader in healthcare improve-
remind you to stop smoking.” This physician was extremely ment, showed a slide of a subway map in New York City with a
warm to the patient throughout the visit. Conventional measures red line drawn from one subway stop in an affluent area to
used in marketing and in healthcare would reflect that it was a another stop in a lower-income area. He then pointed out that
good service experience because of how it made the person feel. life expectancy drops 20 years from the affluent ZIP code to the
But would the service have been objectively better if delivered non-affluent one! “The subway map will tell you the story,”
more emphatically: “Your smoking may be slowly killing you. Berwick stated. Similar maps could be drawn in many other
You must stop. Let me help you stop smoking, starting today.” U.S. cities. In America, lower social status, educational level,
However, a service delivered in this manner may yield a poor and income correlate with poorer health. Healthcare delivery
patient-satisfaction score for the doctor (Berry and Bendapudi may not be local, given the growing use of virtual technologies
2007). New measurement ideas, and evidence on their value, to deliver care; health itself, however, is local.
are important areas to explore. Consider the case, in Atlanta, Georgia, of the East Lake
Foundation, which redeveloped a new community on the site
The balance between high-tech and high-touch services As a where a public housing project had once been. New market-
complex, high-emotion service, healthcare delivery has an rate and subsidized townhomes, villas, and apartments were
essential reliance on the human “touch.” This service feature built for a diverse mix of families of varying incomes. More
has literal manifestations, as during physical examina- than 1300 people lived in these residences in 2018. The
tions, procedures, and surgery; and figurative ones, as Foundation built the Charles Drew Charter School, whose
during conversations and shared decision-making between students academically outperform the state average. Violent
patient and clinician. As such, in-person, interactive ser- crime in the community dropped by 97% from 1995 to
vices are central in healthcare. How should the impor- 2017. The East Lake community is a bold, innovative solution
tance of human touch be maintained as technology rapidly to the tyranny of poverty and its tragic health effects. The
infiltrates myriad facets of healthcare delivery, ranging community was designed with considerable input from area
from in-home doctor visits conducted virtually through residents and professionals.
Skype, FaceTime, or other applications; to patients’ use Marketing background and skills would be particularly useful
of armband or other sensors that monitor health condi- in developing more innovation successes like the Villages of East
tions remotely; to the increasing use of service robots, a Lake, as the community is called. Specifically, marketing aca-
topic that Wirtz et al. (2018) discuss in detail? demics could contribute, as part of a well-executed research path,
Notably, Kaiser Permanente Northern California, with its to the design and rollout of these types of “purpose-built com-
more than 100 internet, mobile, and video services, now con- munities” by investigating the lessons to be learned from existing
ducts more virtual patient visits than in-person visits in serving communities of this type; exploring the population characteristics
more than 3.4 million patients in that region (Pearl 2014). Not that contribute to an optimal resident mix; studying the priorities
coincidentally, Kaiser Permanente (KP) is an HMO that sur- of prospective residents and other stakeholders (such as busi-
vived the broader HMO fallout and, today, is widely consid- nesses and donors) to learn which community attributes offer
ered one of the most innovative U.S. health systems and clear- the most appeal and value; and developing “business and social
ly is a technology leader. Paid on a flat-fee (capitated) basis for case” pitches necessary to attract job-creating organizations, a
delivering healthcare services, KP does well when it keeps robust array of retailers, quality education, and other essential
patients healthy and delivers services efficiently. It had a infrastructure. Planning, funding, and creating a purpose-built
bottom-line reason to be an early, active investor in service- community with a marketing perspective would be especially
delivery technology. Finding the right balance between high- valuable and, possibly, make the difference between achieving
tech and high-touch, as KP has done, is a central issue in success and confronting failure.
healthcare service innovation. Academic marketing can help
healthcare find that right balance going forward.
Conclusion
How to create healthy communities Healthcare is at a tipping
point, in that researchers and other experts are now starting to Service innovation in healthcare is not only possible, as the
recognize that social determinants—the quality of people’s examples in this article show, but imperative. The healthcare
90 AMS Rev (2019) 9:78–92

sector has not traditionally faced strong external pressure to be Berry, L. L., Seiders, K., & Wilder, S. S. (2003). Innovation in access to
care: a patient-centered approach. Annals of Internal Medicine,
innovative in service delivery, but it does now. Wasteful
139(7), 568–574.
spending is pervasive, and pressure to contain costs is intense. Berry, L. L., Shankar, V., Parish, J. T., Cadwallader, S., & Dotzel, T.
Market dynamics are changing rapidly, and a healthcare orga- (2006a). Creating new markets through service innovation. MIT
nization’s economic security is no longer a given. Sloan Management Review, 47(2), 56–63.
Nontraditional competitors and nontraditional technology, Berry, L. L., Wall, E. A., & Carbone, L. P. (2006b). Service clues and
customer assessment of the service experience. Academy of
among other market forces, require a broad-based movement Management Perspectives, 20(33), 43–57.
toward improving efficiency and clinical and service quality, Berry, L. L., Rock, B. L., Houskamp, B. S., Brueggerman, J., & Tucker,
in order to address the expectations that most patients now L. (2013). Care coordination for patients with complex health pro-
have as they increasingly see healthcare through a consumer files in inpatient and outpatient settings. Mayo Clinic Proceedings,
88(2), 184–194.
lens. The uniqueness of healthcare as a service makes
Berry, L. L., Beckham, D., Dettman, A., & Mead, R. (2014). Toward a
implementing service innovation challenging. Yet, individual strategy of patient-centered access to primary care. Mayo Clinic
health systems (whether in cancer care or other medical areas) Proceedings, 89(10), 1406–1415.
have clearly embraced the innovation service challenge, oper- Berry, L. L., Davis, S. W., & Wilmet, J. (2015). When the customer is
ationally and strategically. What remains is for that imperative stressed. Harvard Business Review, 93(2), 86–94.
Berry, L. L., Jacobson, J. O., & Stuart, B. (2016). Managing the clues in
to spread more widely and systematically, with the participa- cancer care. Journal of Oncology Practice, 14(4), 407–410.
tion of researchers in the field of marketing, so that attending Berry, L. L., Danaher, T. S., Beckham, D., Awdish, R. L. A., & Mate, K.
to the “customer experience” becomes one of the primary S. (2017a). When patients and their families feel like hostages to
aims in how healthcare is delivered in the United States. health care. Mayo Clinic Proceedings, 92(9), 1373–1381.
Berry, L. L., Danaher, T. S., Chapman, R. A., & Awdish, R. L. A.
(2017b). Role of kindness in cancer care. Journal of Oncology
Practice, 13(11), 744–750.
Berry, L.L., Deming, K.A., & Danaher, T.S. (2018a). Improving nonclin-
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