Why Quality Culture is the Key for Tech Entrants in Healthcare

“Quality is everyone’s responsibility.”

–W. Edwards Deming

Quality culture is a cornerstone of any industry, particularly the healthcare industry where patient lives are at stake. The implications of quality culture extend beyond operational efficiency; they have profound effects on patient outcomes. For example, research ^[1] shows a strong correlation between positive organizational culture and improved patient safety and satisfaction. Hospitals with robust quality cultures report significantly lower patient mortality rates compared to those lacking such an environment¹.

While traditional healthcare organizations have extensive guidance on fostering quality culture, non-traditional entrants—like technology companies—face unique challenges navigating stringent quality and regulatory requirements. As tech disrupts healthcare, how can these companies build a robust quality culture? This article explores the complexities, challenges, and innovative approaches needed to establish quality practices, offering fresh perspectives tailored to non-traditional players in this highly regulated space.

Health tech: a disruptor in the current market

Technology has disrupted the healthcare space with numerous examples such as telemedicine, electronic health records (EHRs), internet of medical things (IoMT), and artificial intelligence in diagnosis, to name a few. The progress of technology companies interested in reshaping the healthcare landscape has been evident through the last few years, such as at the HLTH 2023 conference, where Microsoft unveiled new AI solutions aimed at improving patient and clinician experiences.

Initially, technology companies entered healthcare as enablers, providing tools and platforms to support healthcare delivery. Over time, they transitioned deeper into the industry, developing and offering their own finished medical devices, marking a significant evolution in their role within the healthcare ecosystem.

As proof-of-concepts transformed into commercial launches, tech companies started to realize that compliance became the ‘make it or break it’ moment for disrupting the healthcare market.  More than 50% of consumers are reported to be sceptical of healthcare information technologies, which raises the question on consumer trust in tech companies moving into healthcare. A classic example of this is Owlet, a healthcare technology company, founded in 2013.

The perils of non-compliance for a healthtech company: A case study

Owlet is an example of a healthcare technology company which faced massive compliance issues. Founded with a mission to create infant monitoring technologies, Owlet’s flagship product received an FDA warning letter stating that the product lacked the required premarket clearance or approval. The FDA requested that Owlet cease sales of the Smart Sock in the U.S. Owlet’s problems didn’t stop there, investors filed a class action lawsuit alleging that Owlet had misled them by failing to disclose that its Smart Sock would likely require regulatory approval.The regulatory issues contributed to a 50% revenue decline in early 2023 as Owlet pivoted its product offerings and worked to regain market share  In 2023, Owlet secured FDA clearance for BabySat, a prescription-only pulse oximetry device designed for physician-supervised use. Despite these advancements, Owlet continues to face financial pressures and legal proceedings stemming from its earlier regulatory challenges.

Recently, there has been a notable increase in hiring compliance specialists in tech companies venturing into healthcare which underscores this fact to prevent regulatory blindsides. While experienced hires from the healthcare industry can help ensure the development of safe and effective devices, transitioning a tech company into the healthcare space presents unique challenges. Compliance specialists must overcome barriers to communication and understanding, ensuring that technical teams grasp critical regulatory requirements and their implications. Bridging this gap is essential to align diverse teams and foster a shared commitment to healthcare compliance. In other words, it is essential to account for quality culture in non-traditional settings.

Quality culture in non-traditional companies: What unique approaches can redefine and strengthen it?

As tech companies strive to integrate innovative solutions, they must prioritize management commitment, collaboration, continuous training, and data-driven decision-making to overcome cultural barriers and enhance quality standards. The following image represents elements of quality culture that can be integrated in such companies:

While the key components of establishing quality culture are similar, there is little research on how to do things differently when it comes to tech companies moving into healthcare. The following sections describe thinking differently to ensure a culture of quality:

Leadership Commitment

One of the most vital components of a quality culture is strong leadership commitment. Leaders at all levels must actively listen, support and prioritize quality initiatives, setting clear expectations that quality is everyone’s responsibility. Management must demonstrate quality leadership by “walking the talk” and consistently aligning decisions with quality priorities, especially with the constant need to innovate in tech companies. This is required in quality management standards such as ISO 13485:2016, and even the latest AI standards such as ISO/IEC 42001:2023. Regardless of the technology, top management sets the tone for quality culture.

Employee Ownership

For a robust quality culture to flourish, employees must feel a sense of ownership over quality outcomes. This entails not only adhering to quality guidelines but also actively participating in quality improvement efforts. Employees should be trained in quality tools and methodologies, enabling them to contribute effectively to quality initiatives. When employees at all levels understand how their roles impact product and service quality, they are more likely to take responsibility for upholding quality standards. An organization with a true culture of quality encourages a proactive mindset where workers feel comfortable raising concerns and challenging practices that may compromise quality. An example of this involves interpretation of quality terminologies in the design of a product. It is important for people in quality to be cognizant of terminologies which can be used differently owing to differences in understanding between software and compliance teams. Having open conversations with engineers–even over lunch or breaks–can help foster discussions around confusing terminologies.

Continuous Improvement

A hallmark of a strong quality culture is the commitment to organization-wide continuous improvement. This involves establishing processes that allow for regular evaluation and enhancement of quality practices while involving engineers in other domains in the decision-making process. It is essential to make engineers heard when developing continuous improvement measures – what would engineers want to see to improve their user experience with compliance related activities? This is particularly important in the context of non-traditional companies, such as tech, moving to healthcare, as engineers need to be heard and their input used in continuous improvement. In continuous improvement activities like 8D, CAPA, or complaint resolution, it’s crucial to prioritize processes over people. Conflicts or finger-pointing may arise during discussions with engineers. After such incidents, reconciliation is key — rebuild trust by explaining that challenges are part of growth and maturity of organizations. This approach fosters collaboration and aligns everyone toward shared goals.

Training and Development

Investing in training and development is critical for cultivating a quality culture. By prioritizing training, companies ensure that their workforce remains adept at meeting the evolving demands of the healthcare landscape. For non-traditional companies moving to healthcare, this may be a challenge. The expectations of engineers working in a lesser regulated industry may require recalibration when they work on highly regulated healthcare projects. Training and development needs require collaboration with engineers to determine the mode of training delivery to make training engaging. It is important to account for the age group of most engineers and having multiple delivery modes (audio, visual, written) to ensure effective training. Lunch and Learns can be a great way to get essential messages across without encroaching on time.  It is essential to emphasize that the need for training is not just a regulatory requirement, but also in the interest of patients using products being built by engineers.

Data-Driven Decision Making

Incorporating data-driven decision-making processes is essential for a quality culture. Organizations should leverage quality management systems to collect, analyze, and interpret data regarding quality performance. This approach enables leaders and employees to identify trends, monitor progress, and make informed decisions that support continuous improvement efforts. By grounding decisions in data, organizations can ensure that their quality initiatives are effective and aligned with strategic goals. Data – the cornerstone of objective evidence – can speak volumes when convincing engineers on the need to make changes to processes. This approach helps shift the focus from assigning blame to understanding and improving processes, fostering a more constructive, solution-oriented culture.

Conclusion

While quality culture is a broadly discussed topic, the implementation of practices to ensure quality culture is specific to each organization. We need to think differently about practical application of quality culture to non-traditional healthcare companies, such as tech companies. Ensuring cultural shifts in the minds of engineers requires greater cross-functional collaboration, understanding an engineer’s mindset and acknowledging that we need to explain why we need them to follow regulations in the interest of patients.

The future of healthcare will be shaped by technology companies that successfully bridge the gap between rapid innovation and patient-centric safeguards. The winners won’t be those who move fastest to market, but those who move thoughtfully and build quality into every aspect of their operations from the start. For tech companies entering healthcare, the message is clear: compliance cannot be an afterthought; it must serve as the bedrock of their approach—the foundation upon which innovation is built. By ensuring leadership commitment, employee ownership, continuous improvement, training and development and basing decisions on data, companies not only protect their reputations, they also earn and sustain the trust of consumers, clinicians, and regulators. In an industry where lives are at stake, the price of overlooking quality is simply too high.

^[1] Braithwaite J, Herkes J, Ludlow K, et al. Association between organisational and workplace cultures, and patient outcomes: systematic review. BMJ Open 2017;7:e017708. doi:10.1136/ bmjopen-2017-017708

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