While improved care will decrease the fraction of the population needing emergency and hospital care it will never eliminate it. The decreased utilization and decreased funding available per capita puts pressure on hospitals. I think that the best innovation strategy for hospitals will be something like: “Sooner, Better, Cheaper”. Hospitals that can provide needed service sooner in your life or your schedule, with better cllinical and experiential outcome, at a significantly lower cost than competitors will flourish–at least in contrast to hospitals that are “Slower, Average, Expensive”. As systems accept risk for population outcomes at lower costs, higher quality and higher satisfaction–they will buy services that meet these requirements when they are unable to produce it themselves.
Innovation in a health system will be a concerted effort to create 1) the clinic of the future, now (P4Medicine) and 2) the hospital of the future, now (Sooner, Better, Cheaper).