WIRED: Hospitals are engines of economic development

*Originally posted on WIRED.com

Hospitals are engines of economic development

The United States has over 5,700 hospitals, and most of them are central to their communities for an obvious reason: They help people get healthier. When I look at these hospitals, I see an untapped resource, a way they could provide greater value to their communities and the country.

Intellectual assets — the ideas and know-how in the heads of clinicians — are vital, intangible resources for most hospitals. They’re equivalent to the research assets at universities. In addition to knowledge and know-how, clinicians working in hospitals are creating ideas for new health care technologies (apps, processes, devices, therapies, drugs) and cost-effective care models, often as part of their response to the value-based care principles of health care reform.

Medical and administrative know-how and inventions are positively impacting patient care, patient costs and hospital revenue. Yet almost all of the formalized programs to transfer technology to patient bedsides are within major academic medical centers not at the thousands of community hospitals nationwide, many of which have become or are looking to become part of a larger health care system through acquisitions, mergers and affiliation arrangements.

We need to have technology commercialization expertise available to more hospitals. This includes health care systems expanding their technology commercialization functions to their affiliated community hospitals. Alternatively, I anticipate that certain hospitals with substantial technology commercialization capabilities will offer their services to other hospitals with which they aren’t affiliated.

The technology commercialization program for a hospital would identify and evaluate the know-how and ideas of the doctors, nurses, and technical and administrative personnel and provide assistance in such areas as product design and development, intellectual property protections, commercialization (licensing or start-up or spin-off development), funding (including sponsored research agreements) and corporate partnering to translate a hospital’s know-how and innovations into clinical use.

A recent academic study found that technology commercialization offices can make money while benefiting society for the public good; they aren’t just cost centers. The annual income earned by technology commercialization offices as a multiple of annual licensing costs is close to six times. For many community and affiliated hospitals, the costs of hiring competent technology professionals as full-time employees wouldn’t be justified.

Community hospitals would likely do best to outsource these functions to major research hospitals. Set up in this way, the cost of these offices would probably be repaid. I’m not guaranteeing that the hospital TCO infrastructure would make money for every hospital or health care system, but statistically, it’s likely this approach would make money for hospitals and their communities.

With access to technology commercialization expertise, the know-how, innovations and technologies found in these non-academic medical centers/non-research organizations could make their way into the community and eventually the broader population. Health care represents about 18 percent of our economy. Arguably, it’s a big enough portion of our economy that we should develop health care know-how and technology commercialization infrastructure that’s broader than at just the relatively small number of academic medical centers and research institutions. Plus, more U.S. citizens would have access to the great ideas our clinicians have for improving the standard of care and working toward a healthier population — a pretty good “side effect,” I think.

Mark E. Coticchia is Vice President and Chief Innovation Officer of the Henry Ford Health System.


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