Today, many hospital systems and health networks are investing in innovation to get access to new and better technologies that enhance and improve health care delivery.
Some are approaching innovation as incubators, accelerators, and/or innovation centers. Others are raising money for innovation through venture/equity funds, self-funding/bootstrapping, or crowdfunding.
The provider-based innovation models they choose come in several forms, depending on which fits best within their mission, goals and timeline. Here are four prevalent models:
1. Outside-in model
The emphasis here is to identify the opportunity (problem, new product) then investigate and find external partners with products and services to support rapid implementation and results. Therefore, later stage innovations with demonstrated results are pursued. University of California, Los Angeles (UCLA) has two innovation accelerators on campus, the Institute for Innovation in Health and the Global Lab for Innovation that identify, pilot, and deploy innovations, especially those that meet urgent needs in health care. As many as two-thirds of innovations that UCLA pilots are externally derived.
2. Inside-out model
Innovation is promoted as an ongoing strategy from within an internal pool of inventors such as physicians and employees. Their early-stage ideas go to a peer review committee that identifies which inventions merit investment in financial and human resources, based on commercial potential and patentability. Cleveland Clinic employs this model and uses their world-wide recognition to secure industry partners for research, development, manufacturing, and technical experience in relevant fields. The Innovation Institute also follows this model and collaborates with Cleveland Clinic to take their health system member owner product ideas to market.
3. Tech-transfer/research model
This is a traditional research and licensing model set up in an academic setting to support faculty, staff, postdocs, and students in their research endeavors, entrepreneurial efforts and industry interactions. University of California, Irvine (UCI) is a good example. UCI has set up two on-campus incubators so that startups can leverage on-campus research and development. University leaders have also created their own Institute for Innovation as a hub for entrepreneurial activity. UCI focuses on connecting entrepreneurs to venture capital networks and seed funding sources, and licensing technology out to the business community. A recent success is PhageTech, LLC, which has signed an agreement with UCI for worldwide patent rights to a hand-held device that can detect cancer and infectious diseases.
4. Venture fund model
This is a strategic health care investment fund that aims to drive and accelerate health care innovation through raising venture capital for investment in start-up, privately held, early- to mid-stage companies. Summation Health Ventures has partnered with Cedars-Sinai and MemorialCare Health System to invest in information technology and medical devices. Their process is to identify an investment opportunity, confirm the fit within health care systems, involve experts in the diligence and evaluation process, then invest and collaborate to enhance value for all parties involved.
Stepping into the innovation picture into what looks like a Venture Fund Model, Wisconsin health system Aurora Health Care has recently invested in StartUp Health to get access to a portfolio of innovative start-up companies.
With this push for bringing new technologies to the marketplace to benefit humanity, we are seeing innovations that will have a positive impact come to life. The Skindroid introduced in June by accelerator StartUp Health, helps detect dehydration, a problem we see every day in health care. This skin biosensor wearable for athletes and health consumers detects and measure biomolecules from the users’ skin for advanced warning of electrolyte depletion or muscle breakdown. It was designed by two medical doctors with backgrounds in neurosurgery and software development.
We’re excited about all the new technologies coming through the pipelines. These provider-based innovation models are playing a critical role in moving us all forward worldwide in health care delivery.