A guest post from Mark Coticchia, Vice President and Chief Innovation Officer at Henry Ford Health System, from his publication, “The Innovation Imperative Improve Healthcare” published in Frontiers of Health Services Management.
View Mark’s LinkedIn profile here: https://www.linkedin.com/in/markcoticchiaprofile/.
Innovation means different things to different organizations and people. However, I have yet to find a healthcare executive who does not readily endorse its importance and the potential for innovation-based impact at his or her institution. Similarly, in private settings, most of my peers talk about the difficulties inherent in structuring and executing innovation activities, setting appropriate expectations, and measuring success.
In this issue, valuable articles portray innovation activities, and, importantly, the origins and structures of two excellent, yet disparate, healthcare systems. Samet and Smith describe the MedStar Institute for Innovation (MI2), a free-standing, 20+ professional entity founded in 2009 to serve the large, DC/Maryland healthcare system. Meanwhile, Conger describes the recent history and mission of innovation activities at OSF HealthCare, a private, integrated system serving the Peoria, IL region. The two descriptions not only provide an opportunity for comparison to each other, but also to the Innovations program that I lead at the Henry Ford Health System.
HENRY FORD INNOVATION BACKGROUND
Henry Ford Health System is an integrated healthcare system with a 100-year history of providing excellent and affordable healthcare, and deploying it throughout the very challenging market of Detroit, Michigan. It is nationally known for its robust business practices, healthcare innovations, and rapid implementation. The breadth of activities within Henry Ford’s health campuses, clinics and urban outreach activities, combined with its direct relationship with a health payer, Health Alliance Plan (HAP), provide a rare laboratory to assess the value and extensibility of new healthcare innovations.
Henry Ford Innovations (HFI) is a corporate function designed to enhance patient care, research, training, and commercialization opportunities within the System. HFI embraces the system’s inventive past while preparing it to adapt to the rapidly changing world of technology and consumer-impacted healthcare. Our strategy is organized around a set of core programs, each drawing upon the successes of the others (Figure 1):
- Education and Research – Training the next wave of entrepreneurs and innovators
- Technology Management – Commercializing Henry Ford innovations
- Corporate Innovation – Partnering to co-develop next-generation products and services in selected clinical areas
- Global Innovation – Expanding quality healthcare around the world
Education and Research
This program focuses on the internal drivers of invention, particularly the needs and interests of system clinicians. It provides system innovators access to an array of intellectual asset-related resources and programs that include innovation training and education, engineering services for prototypes, seminars designed to enhance networking, programs aimed at developing specific medical products, and broad educational offerings in the realms of translational medicine and the entrepreneurial arts. Our approach is novel in that we facilitate and support innovations that can be immediately applied internally towards healthcare outcomes, regardless of whether there is a monetization opportunity through commercial partnering.
The Education and Research program also includes the flagship Davidson Fellowship for Entrepreneurs in Digital Health, and annual internal Davidson Challenges. The goal of the nine-month Davidson Fellowship is to educate and train individuals with a passion for healthcare innovation on the critical issues and processes related to development and commercialization of digital technologies. The Fellows are a cohort of System professionals including clinicians, IT and procurement specialists. These professionals are joined annually by select regional leaders to work in teams to develop multidisciplinary innovation skills.
The Davidson Challenge provides opportunity for clinicians, administrators, entrepreneurs, designers, developers, researchers, and other solution providers to compete to solve an identified problem in healthcare and ultimately make significant impact on patient care and outcomes. Challenge topics have included “Clinical Applications of Wearable and Sensor Technology” and “Frugal Innovation” for low-cost solutions to pervasive healthcare problems.
The Technology Management program creates intellectual assets that can serve as cornerstones for market opportunities. While the program serves the federally-funded applied research that takes place at Henry Ford, it also focuses on intellectual assets in the form of not only patents, but also knowhow and data that emanate from daily activities of our front-line providers.
The program addresses innovation at any stage of the commercialization process, from inception and ideation, through early development, validation, and ultimately licensing or spinout. Core activities include opportunity assessment, intellectual property prosecution, product development, and commercial disposition.
One key differentiator between Henry Ford and other innovation programs is that our activities are not limited to our own assets and technologies. Rather, we engage with startups and established companies alike to advance products that impact healthcare.
Unlike traditional “academic push” approaches, we work with companies that may already possess breakthrough technologies, development programs and/or dedicated professionals, but lack clinical evaluation of their product. We determine whether there is clinical validity. Henry Ford specific contributions can also include clinical process knowhow, workflow expertise, target market identification, access to data, and payment models.
In return for licensing of our IP, particularly healthcare knowhow, we typically receive equity or running royalties. The Corporate Innovation program has become a key platform to engage targeted organizations around opportunities to improve the delivery of healthcare.
For U.S. healthcare organizations, the international market is a key opportunity for enhancing revenue. Domestically, declining reimbursement rates, combined with the uncertainly surrounding implementation of the Affordable Care Act (ACA), have put severe strain on operations. The international market presents an opportunity for American hospitals to leverage their brand, technology and know-how to grow revenue. Today more than one billion people worldwide lack access to a healthcare system. To address this problem, clinical programs, hospitals, and innovations are being developed at a rapid pace. As these developments move forward, there is a tremendous interest to participate with U.S. hospitals to apply proven practices, protocols, policies, and technologies to the new healthcare infrastructure. The Henry Ford Global Innovation programs include:
- Licensing of knowhow for use in foreign countries for new hospital development or expansion including clinical program planning, physical planning, clinical and administrative workflows, medical protocols, staff recruitment and development. To date, we have executed such types of agreements with the developers of hospitals in Saudi Arabia and India.
- Technology sourcing to attract promising healthcare technologies that Henry Ford is interested in utilizing and making further inventions upon to fill a need in patient care.
- International licensing to seek new outlets for Henry Ford intellectual property and knowhow.
The Henry Ford Innovations program shares several key elements with the programs at MedStar and OSF Healthcare. An area of near-perfect alignment is the recognition that emerging healthcare needs drive a systems’ respective commitment to innovation. Active transition, or at least a call for change, seemingly permeates healthcare under almost any lens. The authors astutely point to the ongoing changes in American healthcare economics, transitioning from volume-based to value-based models, the “consumerization” of medicine, and the growth in gross volume of care driven by an aging population (coupling to chronic disease conditions) and an emerging class of newly-covered patients resulting from recent changes in federal patient access laws.
A second strong area of alignment among the Henry Ford, MedStar and OFS approaches to innovation is the conviction that innovation can occur at, and impact all, facets of healthcare. Accordingly, the authors respectively recognize the “potential innovation energy [that] resides in each employee” (Samet and Smith) and call for their innovation vision “to be owned by everyone who works at OSF and shared by our partners” (Conger). These beliefs are supported by what we see daily at HFI.
I’ll admit that coming to Henry Ford after decades of experience in technology management at world-class research institutions (Carnegie Mellon University and Case Western Reserve University), I was pleasantly surprised that our innovation constituent base is not comprised only of those persons engaged in research and publications – of course, we have many of these – but also practicing clinicians, such as doctors, physician assistants, nurses, fellows and technicians.
In fact, one of HFI’s first successful projects was the design and launch of the Model Gä patient gown. The gown began with a simple idea a little over three years ago – take a fresh, non-clinical look at items throughout the hospital and generate ideas for improvement. The “non-clinical look” was provided by HFI designers, College of Creative Studies students, and select clinicians familiar with the current gowns (i.e., nurses and technicians). The iterative development of the gown became a system-wide “call to arms.” In addition to the original inventors, contributors to the design and evaluation ultimately included laundry workers, procurement professionals, and patient quality and satisfaction professionals. In 2014, the Model G was adopted for use throughout Henry Ford, and, in 2015, HFI licensed it for national distribution.
Another example of how a system-wide multidisciplinary approach benefits HFI is our integration with the Healthcare Alliance Plan (HAP), the second-largest healthcare payer in Michigan. Our relationship with HAP provides immediate insight on whether insurers will cover a given clinical intervention. Through such access, we are able to navigate pricing constraints, paths-to-market adoption, and ultimate product profitability. This payer perspective is more needed than ever before in light of the transition in healthcare economics. This is supported by the growth-stage enterprise sector; Eugene Kandel, CEO of Start-Up Nation Central recently noted, “The most daunting challenge Israeli firms face in accessing the U.S. market is no longer meeting technological efficacy, but rather, navigation of complex purchaser and payer dynamics that limit adoption.”
UNIQUE ELEMENTS IN HFI PROGRAM
While the Henry Ford, MedStar and OSF approaches to innovations strongly align in the elements of need recognition and multidisciplinary, system-wide contributions, there are two additional strategic elements that are unique and critical to the Henry Ford model: corporate innovation and economic development.
As mentioned earlier, Henry Ford does not constrain itself to its own intellectual assets and opportunities – rather it embraces corporate engagement and challenge programs designed to increase the speed of validation and adoption of medical technologies and care efficiencies regardless of origin. While interaction with ‘NIH: Not Invented Here’ opportunities impart further elements of complexity when integrating into not-for-profit healthcare settings, Henry Ford believes that the numerous challenges facing medicine require that it be open to opportunities coming from all types of entities across the globe. Simply, while our more than 23,000 employees are an immense source of creativity and innovation opportunities, global firms and health professionals facing similar challenges should be called upon to aid us in meeting our daily challenges.
Henry Ford Innovations has developed the ability to structure novel, flexible relationships. While not all systems have the scale and location to readily engage with large, multinational partners, almost all can benefit from relationships with small, privately-held firms. Indeed, Henry Ford Innovations has had as much success interacting with small enterprises that were previously unknown to the system as we have interacting with large commercial entities who have served as suppliers or research sponsors for decades. As the national and global push for entrepreneurship grows, health systems will have continued opportunities for new engagements. By establishing a corporate innovation program, healthcare innovation functions can address system needs and, at times, concurrently, address regional economic development challenges.
On the topic of economic development, we at HFI recognize that healthcare campuses are drivers for the “innovation economy.” One of our guiding principles has been that value is created at the confluence of talent, resources and opportunity, and hospitals and health campuses are prime candidates for such value creation.
Healthcare institutions across the country have a diverse collection of educated talent alongside a vast array of resources. These resources include infrastructure (e.g., laboratories, equipment), intellectual assets and an obvious, but often overlooked resource, capital. Henry Ford, similar to MedStar and OSF, spends billions of dollars annually in the purchase of products and services. This reach promotes health campuses to a level on par, if not exceeding, academic campuses as drivers for regional economic development. While colleges and universities undoubtedly harbor a critical place in the innovation economy, they often lack the “end-user” perspective on technology that hospitals possess. Contrary to medical practitioners, while academic researchers are capable of transformational inventions, they may not approach matters through the lens of practical need.
As healthcare institutions drive the innovation economy, they also become a source for attracting top talent to the region. HFI has become a tool for attracting and retaining top clinicians, executives, and knowledge workers from an array of backgrounds to Henry Ford Health System and the southeast Michigan region.
I want to conclude with a set of lessons from years of working in the Innovation sphere.
- Innovation programs are created for different reasons and have different elements, but they all rely on professional staff for success. At the end of the day, innovation is similar to an execution play in football: it is as reliant on the fundamentals of ‘blocking and tackling’ as it is on overall strategy. Experienced technology management and venture development professionals are key to success and need to be viewed as investments rather than cost centers.
- There is value to functional knowledge. I’ve seen too many new innovation functions in the “eds and meds” sector waste resources and get off to bad starts by relying on inexperienced professionals to lead innovation activities. A common mistake is empowering a professional with a track record of success in another field (e.g., an accomplished scientist or doctor) to lead in an entrepreneurial or innovation endeavor. I often joke to my medical colleagues that, “you wouldn’t allow an accomplished entrepreneur to perform your medical procedure just because s/he has met a lot of success in business.”
- The not-for-profit world really is different. Relying on innovation professionals that have had success solely in the for-profit arena is a common mistake. Stark differences in process, legal regulations, and access to capital hinders many corporate-experienced professionals from making an easy transition to the not-profit innovation sector. Unlike corporate stage-gated approaches to product development, most of the eds and meds subscribe to an “eat what you kill” mentality. There is no pool of funding for innovation projects, rather, investigators must partner with support functions to compete for federal and foundation financing. All too often I’ve had a corporate colleague state that “you should polish that project by investing a few-hundred thousand over the next year and it may be ready for licensing.” This is not an economic reality for most institutions.
- Benchmarking helps. In the rapidly evolving world of healthcare innovation, knowing what institutions such as MedStar, OSF Healthcare, and Henry Ford are doing provides a solid base on which to tailor institutional programs.