Monday, January 21, 2013

Building a Health Incubator within a Hospital: Creating Value

[This is part 3 of a series of posts based on the following:]

The main purpose of building a health incubator within a hospital is to decrease the diffusion coefficient between the patients, providers, and payers and the entrepreneurs trying to create solutions to their problems. As with all incubators, a hospital based incubator can speed the time and decrease the resources needed to confirm or invalidate a hypothesized value proposition. Such an incubator can also generate specific value to the host hospital, the partnering institutions and experts, and the participating fellows.

The host hospital can confer a benefit from the incubator to it’s patients and/or providers by giving them direct access to the product of the incubator. This benefit may be augmented for a population that may have otherwise been underserved and not a typical target market of profit-driven innovation. The hospital itself stands to benefit because it can indirectly absorb the expertise cultivated through relationships with external content experts. And if a commercially viable product or service bubbles out of the incubator, proceeds from those profits can be reinvested to improve patient care.

The partnering institutions and experts outside of the hospital can similarly grow relationships that may have otherwise been difficult to obtain. The current incubator model engenders a symbiotic relationship between otherwise very expensive consultant services and entrepreneurs that would otherwise not be able to afford those services. The consultants offer their services free or at a substantial discount to the incubator companies and in term have are first in line for a fully reimbursed future relationship when fledgling company grows up to be better capitalized. External experts whose business models are not based on a fee-for-service consultancy model can stand to benefit from the knowledge products that result from the incubator relationship. The processes being developed at this novel intersection of business and clinical innovation can be codified, packaged, and re-purposed or sold by external collaborators. In a sense, the creation of the incubator is itself a lean knowledge product with this blog being the market test of it’s value.

The value of a hospital-based incubator to a clinical innovation fellow is multifaceted and compounding. The direct benefit is that a clinician innovator no longer has to choose between clinical practice and entrepreneurship. They can do both without stifling the progression of their academic career and simultaneously offering the requisite full commitment to an innovation effort. Remaining linked to an academic center has substantial benefits; a formally recognized fellowship in clinical innovation would maintain that academic grounding and promote innovation through an incentive structure that is less based on production of scholarly activity and more based on production of viable products and services with social value. 

Additionally, there is a bidirectional benefit when clinicians have intimate exposure to the clinical idea sandbox and simultaneously contribute innovative thinking to the direct care of patients. Upon completion of the fellowship, the clinician innovator can leverage their experience and connectivity to serve as a catalyst for health care disruption as a business executive or chief innovation officer at a hospital, among endless other possibilities.

The value of an innovation incubator within a hospital ultimately comes from the processes that are developed and their resultant products or services. The next post explores the tension between the social and commercial value of the deliverables of an innovation incubator.

No comments:

Post a Comment