Why We Started A Health IT Innovation Institute

20 Great Ideas To Steal In 2013

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After serving nearly 25 years in health IT, most recently as senior VP and CIO for St. Joseph Health (SJH), a $6 billion integrated Catholic healthcare delivery system, I was given the chance to try something entirely new -- to help launch The Innovation Institute, an independent, for-profit, limited liability company structured to cultivate new technologies to transform healthcare delivery.

With the Patient Protection & Affordable Care Act, the U.S. Healthcare System faces the most significant regulatory overhaul since the passage of Medicare and Medicaid in 1965. The Innovation Institute is trying a new approach to help fix one of the most expensive and complex healthcare systems in the world through the development and implementation of both cost-cutting and cutting-edge technologies.

Why is a new approach needed? It is critical for healthcare systems, clinicians, insurers, patients and industry forces to intently tackle the escalating costs of healthcare while improving the quality and level of care provided. Yet, hectic healthcare environments have, most often, not allocated the time and resources required for developing new and better technologies and procedures.

The Innovation Institute was established in January, designed specifically to "reinvent care" by working with seven strategically selected nonprofit health system member owners, with SJH as the first. The institute is negotiating with other potential member owners.

To spot new technology opportunities, we have created a platform to get closer to physicians and clinicians, to learn about the challenges they see and how to solve them, together. The Institute provides a team of experts whose primary purpose is to make healthcare run better. We did not have this before.

The business model for The Innovation Institute includes three key elements: the Enterprise Development Group, the Innovation Lab and the Growth Fund.

The first piece, the Enterprise Development Group, generates cash flow to help The Innovation Institute fund innovation projects. Today, the EDG owns businesses in healthcare construction management and in biomedical management. Biomedical management involves handling all the contracts, maintenance and financing for a provider's healthcare equipment. For example, the SJH system has around 69,000 pieces of technology across its healthcare facility network in California and Texas, from a digital thermometer up to a linear accelerator.

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The Innovation Lab, which I oversee, is an incubator to take ideas from the concept stage to prototype to end product. Member-owner employees and physicians, as well as industry partners, can submit ideas through a Web-based process. We are collaborating with Cleveland Clinic Innovation Alliance to manage the steps involved in the commercialization process. Technology underwriters support the Lab with expertise and funding. The Innovation Lab is designed to serve four distinct purposes: collector of creative ideas, idea developer, technology accelerator and innovation showcase.

The third piece of the business model is the Growth Fund, which seeks to fund and develop startup companies that will provide returns to our investors. We expect to deliver those returns by backing companies that understand and align the economic incentives of healthcare's three major constituencies: payers, providers and patients.

Member-owners benefit from best practices and cost savings provided by a team with hundreds of years of combined experience in essential service areas, and by converting traditional cost centers into revenue centers.

In my next column, I'll discuss more about the Innovation Lab and the technology partners we are working with to introduce new technologies. For more information, visit www.ii4change.com.