From Baptist Health South Florida
7 min. read
Written By: Mark Coticchia
Published: Oct. 16, 2020
Written By: Mark Coticchia
Published: Oct. 16, 2020
In today’s society, the term innovation has become synonymous with value. Many even call our current global economy the “innovation economy.” There’s no shortage of commercials that convey how innovation is at the root of any given company’s products or services. In the last decade or so, most large companies have established formal innovation roles and functions.
When talking about innovation, it’simportant to first settle on a definition.
I define innovation as the structured,multidisciplinary process of developing a new product or service, with an emphasison the process.
Many people incorrectly viewinnovation as one of two ends of the spectrum: either they think of it as theinvention or really exciting concept, or they think of it as the actual productor service, itself. While many people can come up with great ideas, it takes aninnovation process to move it from an idea to an actual outcome.
Thenation’s healthcare system abounds with needs that require innovativesolutions. Challenges include caring for the growing senior population, lack ofaccess to quality care due to economics or logistics, and infrastructureconcerns related to supply chains or diagnostic methodologies. The COVID-19pandemic has brought many of these needs into even sharper focus.
Innovationcan create improved health and wellness for populations as well as better economicstability for the provider and payer system – not just in South Florida or theU.S., but around the globe.
In the healthcare world especially, innovation can improve working conditions by creating new products and processes that help healthcare professionals work smarter. Royalties or other income from sale of those products and processes can generate much-needed revenue. Often, entirely new companies spring up from medical advances, contributing greatly to local economic development and job creation.
Stepsto Innovation Success
Howdoes an organization lay the foundation for a successful innovation process? Ialways start with talent. An organization needs expert professionals who arecapable of understanding internal needs, capabilities and constraints, while atthe same time grasping external factors such as intellectual propertyprotection, investment mechanisms, and legal and regulatory boundaries. Becausemost innovation functions run lean, it’s important to have a strong and diverseexternal network of professionals, as well, including attorneys, IT andmarketing professionals, and even designers and engineers.
We also need to make sure the risk-rewardrelationship warrants the investment of time and resources. That means we needto have fair, objective analytical processes in place to quickly critique newopportunities and identify possible winners.
When organizations collaborate withexternal entities to develop a new product or service, a clear workingagreement is essential. In the case of Baptist Health, we might partner with aone-person start-up company, multiple multinational corporations, or nonprofitsincluding universities and other hospitals. In each instance, we start with atemplate agreement and then customize it. I always seek a champion withinBaptist Health who will engage in the project and ensure we’re meeting our endof the bargain.
Ipoint to several factors that can hinder innovation in the healthcare space:
Theunique nature of healthcare:Creatingnew products and services in a not-for-profit entity committed to the dailycare of thousands of patients is not easy. Our professionals are very busy fulfillingtheir primary employee obligations. It can be very difficult to get time from them,or even mind-share, when seeking their contributions to innovation activities.
Motivatingand incentivizing contributors to innovation: It’simperative that major contributors benefit economically as well as in terms ofperformance review and recognition. This is why we have established BaptistHealth’s’ first intellectual property policy, under which creators receive halfof any net income that we may ultimately receive.
The lag in fiscal return fromcommercialization: It isn’t uncommon for a new innovationfunction to need five or even ten years to ultimately break even. Being a costcenter, especially in today’s medical environment, is not an ideal position.Innovation professionals often struggle with what to measure and how tomaintain constituents’ confidence during that critical, years-long periodbefore the final economic outcome is known.
The “innovation valley of death”: The gapbetween funding available to minimize the financial risk of an emerging productand the funding generally available from investment sources. Fornot-for-profits, it can be very difficult to attract investment capital at theearliest stages of product development. While it would be great to have adedicated fund, most hospitals and universities simply cannot afford or defendsuch an investment relative to other mission-based needs. We mostly rely onbootstrapping to continue early product refinement.
The cost of protecting intellectualproperty: It costs a lot to apply, prosecute and maintain a patentportfolio. It is not uncommon to spend more than $20,000 for a patentapplication before it is reviewed and accepted by an examiner.
Engaging potential partneringcompanies: Each type of company has its own limitations. The largest, most well-knownmedical brands can become wonderful partners. However, they are often tightly focusedon near-term sales and usually don’t collaborate or invest upstream at the veryearly stages of product development. Meanwhile, privately held firms,especially start-ups, have interests and product designs that align at the veryearly stages of product development, but often lack the resources to fullyexecute.
Launching a completely new enterprise: Workingwith entrepreneurs and investors can be wonderful, but these dealings presenttheir own challenges. Like any relationship, finding the individuals you canwork with towards a long-term goal is not easy, and relationships and track recordsmatter when dealing with both investors and entrepreneurs.
Staying true to the organization’smission: There are times a healthcare organization may question whether agiven commercial or entrepreneurial activity is appropriate relative to ourprinciples and ethical obligations. Conflicts of interest aren’t necessarily tobe avoided, but they definitely require management. At Baptist Health, ourinnovation office is part of the institutional conflict-of-interest managementfunction.
Preserving academic and medical values: Medicalprofessionals sometimes question whether commercialization activities areappropriate in terms of their work obligations and career path. This decisionis ultimately theirs to make, but I point out that the best innovation opportunitiesaddress a strong medical need, and they must weigh that need in terms of theother aspects of their career.
Losing employees to entrepreneurialpursuits: Creating and growing a new healthcare company can subjectemployees to unprecedented demands on their time. We don’t necessarily want ourbest and brightest putting in long hours or even leaving their career withBaptist Health just to grow the business. We are aware of the opportunity coststhat arise when our people are involved in a new venture, and we try to balancethe potential upside of developing an improved future of care with protectingand maintaining our current state of operations.
There isn’t any single activity, but rather many ingredients that contribute to the innovation culture at Baptist Health.
To start with, we have strongrelationships in play. Because we know that most innovation activities will endin failure – or at least take many years to produce fruits – we work to gaintrust and, in turn, we must trust our innovation partners. We want to work withcollaborators who share the same expectations if we’re going to produce enoughshots on goal to have success.
Similarly, strong relationships,support and shared expectations with the C-suite and the board of trustees areimportant. At Baptist Health, these individuals also use their position toshare the message of just how important innovation is to the organization.
Beyond the relationships neededthroughout the organization, Baptist Health’s innovation team relies on specialcontributors and experts for advice.
I mentioned that we seek champions forany given project. When things are going well, you’ll have a handful of key opinionleaders whom you can bounce opportunities off of, and whose assessment andadvice you trust. Some of these people may also become ambassadors for theinnovation function. Not surprisingly, many first-time innovators seekreferences or mentors amongst their own.
It is important to recognize the realitythat the innovation function itself does not create the opportunities.
Hopefully, we are adept at respondingto opportunity and structuring appropriate projects and collaborations thatemanate from other peoples’ ideas. We need our inventors or creators to dotheir part. I track invention disclosures and meetings to see just how well we’redoing at providing us opportunities. We have also used challenge mechanisms andpromotional outreach to ensure that our inventors remember we’re here to workwith and for them.
Every Baptist Health employee,regardless of role, has an opportunity to participate in the ways theorganization provides care. You don’t necessarily need to have created theidea, but rather you may contribute to how an idea is developed or modified sothat it can create positive impact for many.
I encourage workers to look at theirown professional day and think, “what are the pain points? If there were waysto magically improve my job performance, what would they be?” Likewise, patientcomments can be a jumping-off point to innovative endeavors.
These innovation principles translate readily to other industries and professions. Contact your local chamber of commerce to tap into innovation resources in your community.
About the Author:
Mark Coticchia, Corporate Vice President for Innovation
Mark Coticchia is Corporate Vice President for Innovation at Baptist Health South Florida. He recently assumed the new role that will build on three decades of medical innovation at the largest not-for-profit healthcare organization in South Florida. Mr. Coticchia arrives from Henry Ford Health System in Detroit, where he was vice president and chief innovation officer, responsible for driving intellectual and clinical assets through new ventures, corporate partnerships, product development and technology commercialization. Mr. Coticchia received both his M.S. degree in Industrial Engineering and B.S. degree in Civil Engineering from the University of Pittsburgh.
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