Cleveland Clinic: Forging A New Path for Health IT Innovation

Cleveland Clinic’s renown as a top-ranked facility for a long list of medical specialties is well documented but its innovation efforts are just as impressive. Gary Fingerhut, executive director of Cleveland Clinic Innovations, shares the strategies and goals of this commercial arm of the Cleveland Clinic, responsible for company creation and business development of medical technology developed by its doctors and researchers.

Since 2000, 66 companies have been enabled by Cleveland Clinic technology and expertise; nearly three-quarters of these companies have received more than $750 million in equity investment to date. CCI has transacted nearly 450 licenses and has more than 2,200 patent applications with 525 issued patents. The new companies have created 1,100 jobs in northeast Ohio.

Health IT makes up 23 percent of CCI’s business. Healthcare reform has generated a “tremendous amount of activity in the health IT space,” says Fingerhut. Bundled payment, care paths, clinical decision support and everything related to a value-based approach is guiding health IT.

CCI serves as an investor getting technologies to the rest of the world and is charged with monetizing those technologies. Most of the technologies focus less on unmet needs and more on real-time disclosures that make a difference in workflow. “These are ideas that come from the clinicians while they’re practicing medicine,” says Fingerhut.

The process

CCI has had a standard commercialization process in place for 13 years, Fingerhut says. Beginning with idea submission, an individual submits an invention disclosure form and works with the innovation manager of his or her facility to prepare the invention for presentation at the appropriate peer review committee (PRC) meeting. After the presentation, the PRC assesses and scores the invention for clinical and technical efficacy. Based on the aggregate score and feedback, the innovation either advances to evaluation for commercial viability or the case is closed. Inventions believed to have clinical and technical merit transition to one of four CCI incubators: medical devices, therapeutics and diagnostics, health IT or delivery solutions.

Each invention gets a development plan and CCI reaches out to garner interest in the invention and more feedback. The commercialization strategy is refined and marketing begins. Negotiations are initiated with interested corporate partners or investors. The last step is translation, when licenses are executed and new companies are formed. Licenses are closely monitored by CCI to ensure commercialization activities by the licensee are on track and new companies are operated by CCI until appropriately staffed. New companies are governed by CCI via participation on a Board of Directors until goals of improving patient care are realized.

Cases may be closed during several points in the process for a variety of reasons, including an invention being deemed not commercially viable, not protectable or unfeasible by the CCI incubator or deemed not marketable by various corporate partners or investors.

“Some ideas come on napkins and some come as fully-fledged technology used here for many years,” says Fingerhut. Whatever its origin, successful inventions ultimately result in a royalty-bearing license to a market leader or a platform technology that generates a spinoff company.

CCI has the same mission as the rest of the Cleveland Clinic enterprise: to improve patient lives, he says.

Spreading the wealth

While Cleveland Clinic has spent years fine tuning its innovation process, it’s not practical for all healthcare delivery organizations to have an innovation engine, says Fingerhut. That’s why CCI developed its innovation alliance in 2011—to manage the entire process for other institutions. Ideas gestate within other healthcare providers or research organizations, and rather than build from the ground up, they can leverage what CCI has spent 13 years developing.

CCI began holding an annual innovation summit in 2009 which has grown each year. Last year’s event drew more than 1,600 attendees from 40 states and 20 countries. The meeting serves as “an opportunity for us to connect with the world experts” including startup companies and people looking to move forward the conversation around healthcare reform.

The next summit in October will focus on cancer and personalized medicine and Fingerhut expects it to be the biggest event to date.

CCI has partnered with StartUp Health, a global platform focused on accelerating health and wellness innovation, to reach beyond its own incubator. The two presented the New Venture Healthcare Challenge which kicked off the most recent innovation summit. “They have a very similar mission—getting these early-stage technologies to market faster. They have a program that accelerates the commercialization of these technologies, many of which are in our space. We will continue that relationship.”

Challenges today and beyond

It’s difficult to pick one biggest challenge to healthcare innovation, says Fingerhut. Money is always an issue, of course. “Having a network of capital from angels through institutional lenders is critical to the success of our program. Whether from the state or private or commercial activities, capital taking something from the incubation stage through the commercialization stage can be a very difficult challenge.”

New channels are offering new opportunities, however. Industry partners have been helpful with some areas of sponsored innovation and market leaders are interested in investing both capital and technology to speed the to-market time.

Looking ahead, Fingerhut predicts further growth. “We see tremendous activity in the health IT arena. Our health IT portfolio has grown significantly over the last three years and we expect that to continue.” Relationships with organizations such as IBM/Watson, teaching new capabilities to medical students and continuing to invest in big data players all are helping Cleveland Clinic pave the way forward.