It's a tough economic environment for hospitals. Bottom lines are being squeezed, and changes in health care laws and priorities mean that they're having to change everything, focusing more on quality than quantity and profit.
Some hospitals are taking an innovative approach to making money beyond just patient care, by using one of their biggest assets: personnel — the doctors, nurses, and other staff who are on the front lines providing health care, and commercializing the ideas they have for making it better.
The Cleveland Clinic has focused a great deal on this area, to the point where it actually provides staff and expertise to other hospitals that want to do the same thing. We spoke to Dr. Delos Cosgrove, the most successful inventor in the clinic's history and its current CEO; and Chris Coburn, the Executive Director of CCF Innovations, the technology commercialization wing of the Clinic.
Initial failures, then increasing success
"It's been a very long journey actually," Dr. Cosgrove told us. "The journey started when, in my first five years at the Clinic which was 30 years ago now, I developed with another guy a closed loop system for giving a drug. So, we essentially learned about how to keep a patient 's blood pressure at a certain level by putting a drug in. We developed it, we found a patent lawyer to do it, I negotiated with companies and convinced a company to manufacture it, put together a payment program, and one day I walked in and gave the CEO a check for 50 grand. That was more than my salary at the time, I thought it was a really big deal. And he said, "Jeez, we could make some money out of this," and I said, "Yeah, we probably could."
But the path from the idea and that initial success wasn't an easy one. They started out working with a venture capitalist who was on the board, but they couldn't really get things off the ground. "For 20 years we couldn't quite get it right," Dr. Cosgrove said.
It started to go right when he hired Chris Coburn. Over the last decade or so since he was charged with working with doctors and staff to develop and commercialize tech, they've gotten almost 500 patents, another 1,400 have been filed for, and they've spun out 52 companies.
"When I started, we had a secretary and a part-time administrative type. Today we have about 65 people. It's been, as they say, an interesting journey," Coburn said.
Beyond the numbers, what Dr. Cosgrove calls an "interesting validation" of the idea was that, after realizing how hard building such a system is, other hospitals, including the largest health care providers in New York and the Washington, D.C. areas, are bringing the Cleveland Clinic's model and staff into their hospitals.
Coburn himself gives Dr. Cosgrove a lot of the credit.
"When the CEO expresses themself on an issue like this, the organization really follows. Having for the last 8 years, the most innovative, the most prolific inventor in the history of the Clinic as CEO has given us an added leg up," Coburn said, "because not only do you have it imbued in the culture, you have a pretty clear message and a role model in the CEO."
A supply of highly educated, highly trained, very smart people.
The potential is easy to see. Hospitals, especially prestigious ones like the Cleveland Clinic, have a tremendous stock of brilliant, inventive people.
"You think about becoming a physician in the U.S. or even a nurse, you survive one of the most Darwinian progressions in human society today," Coburn argues.
It's an incredibly rigorous academic program and training process, one that only the most intelligent and dedicated people make it through. But after that training, doctors and nurses often end up doing certain repeated tasks for years and years.
That's a huge potential resource.
"So then you become a physician, lets say you're a surgeon. You are typically doing kind of the same thing every day after a while if you're specializing. If you think about it from the standpoint of potential for innovation, a really smart, very highly educated person doing the same thing, you just naturally believe that that's going to lead to some idea of how to do it better, and to me that's very intriguing," Coburn said. "I speak to the incoming docs. I always ask them 'how many people in the room think you're innovators?' Almost always, it's [fewer] than half. I make that point to them; how can you not be?"
It's about asking the right questions, Coburn said. " How does that self-awareness bubble up? And then how do you get them on that arc?"
The key is changing how these doctors and surgeons think, and it takes consistent effort to do that. The Cleveland Clinic does that with frequent training and by providing successful role models. "We want to communicate the message on a near continuous basis, that mode to our staff that says 'hey look, my peer has been successful at this,'" Coburn said.
That might be an easy sell to doctors in an academic or research setting, but a primary care doctor who sees 30 patients a day, a surgeon who's in the operating room all day, and a busy nurse need a bit more care and help.
It's about teaching them to think of themselves and act like an innovator, to try and come up with new and better ways of doing their job, then to use the organization that Coburn's created to make something from it.
Turning ideas into companies and products
Coburn's team, in addition to encouraging innovation, does everything it takes to get from an idea to reality, finding investors, dealing with patent law, and so on. "That's not stuff that comes naturally to a doc," as Cleveland Clinic CEO Dr. Toby Cosgrove puts it.
Coburn and his team have done it so well that hospitals around the country are paying the Clinic to run commercialization systems for them.
The idea is to make it possible for every employee to be an entrepreneur and It's not just doctors. Coburn and his team have had a lot of success with dashboards and other software too, so it's about the tech people, nurses and support staff as well. He thinks that many of the early advances and payoffs from these programs will come from the IT side, especially as electronic medical records become the standard worldwide.
The year before MedStar, the largest hospital system in Washington, D.C. and Maryland, brought the Cleveland Clinic on board to help build their system, they had no disclosures of possible ideas from their staff. The year after, they had more than 100.
The Cleveland Clinic isn't the only hospital tech transfer program out there, places like Massachusetts General and Sloan Kettering have been very successful as well. However, export their model is something new that could bring a large number of new players to the table.
Hospitals aren't going to replace big pharma, biotech companies, or tech startups. However, there's a huge amount of human capital and potential that has yet to be fully unleashed.
Check War Room over the next few days for more on how the next wave of health care advances and startups could come from hospitals.
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