Strategies for University Hospitals
Focus, Agility and the importance of No
How do you best build innovation and work with tech start-ups inside a university hospital? UK hospital Guy’s and St Thomas’ NHS Foundation Trust (GSTT), took the unusual step of appointing as Director of Innovation & Strategic Industry Partnerships , Nadine Hachach-Haram, a physician who is also a successful entrepreneur, Founder & CEO of Proximie. We look at how GSTT has now developed its own innovation accelerator with a linked venture capital fund and at its overall strategy to encourage innovation.
On the face of it, hospitals should be great places to build health tech start-ups. Their teams of clinicians understand the problems and challenges and so should be able to help start-ups to rapidly prove concepts. And they have immense scientific expertise and mountains of data.
But all too often hospitals and their twinned research institutes are better at discovery of new drugs or devices than at translation of innovative solutions into changed medical practice.
Why?
Part of the problem is cultural. Research institutes tend to focus on abstract science and publishing papers, whilst physicians in the hospital are absorbed in curing complex patients. Physicians and scientists need to be shown how they can become entrepreneurs and assured that setting up a business is compatible with their other roles.
Part of the problem is bureaucratic. University hospitals tend to have fragmented and siloed decision making. Haram says it is entirely possible for a start up to approach a hospital and to be bounced around for 2 years without ever getting a definite decision. A series of small pilots which never take a project forward is a common experience for many.
Part of the problem is trust. Their non-commercial cultures mean hospitals don’t often trust industry and external investors. Wrangling over intellectual property can kill cooperation.
Haram says that GSTT set out to solve these problems. The first step was to create a unitary team that brought together all staff dealing with innovation across the organisation. This created CITI, – Centre for Innovation Transformation and Improvement – a team of 30 people.
Another early step was to identify the real challenges that GSTT wanted to address. Hachach-Haram says: “Our clinicians know what the pinch points are and we focus on these. Anything we do has to enable us to delivery our overall mission of better, faster, fairer healthcare. We call them grand challenges. These are the areas we want to focus on.” In GSTT’s case, grand challenges include ambulatory care patients, something that is essential as the NHS moves towards integrated care models that link inpatient to outpatient. Other grand challenges include rapid process automation, using artificial intelligence to improve the management of, for instance, waiting lists or the best use of workforce time. Another grand challenge is around surgery. “How do we best drive fast and effective training to address the workforce gap, or how do we improve productivity?”
The creation of grand challenges also enabled Hachach-Haram and her team to engage with physicians around the subjects which are most dear to their hearts. Involving them in setting such goals immediately shows the relevance and importance of innovation.
But within the grand challenges, the CITI team will systematically scan the market both internally and externally to identify start-ups with possible solutions.
“We have so many brilliant scientists, clinicians and inventors in the NHS and UK universities, but too often it feels like they have to swim against the bureaucratic tide to get their innovations into practice. The aim of CITI is to turn that tide so that it goes with innovation, rather than against it.”
Lawrence Tallon, Deputy Chief Executive Officer, Guy’s & St Thomas’ Hospital
GSTT is aiming not just to create start-ups using its internal staff but also to engage with spin-ins, companies that it can partner and work with at GSTT to enable the translation of innovation. This is why a key component of the CITI team is not only its innovation team but also its delivery and transformation team- these need to work hand in hand to ensure successful delivery at scale
Hachach-Haram says it is also important for GSTT to also be an investor, hence the setting up with Kings Health Partners (Guy’s & St Thomas’ Hospital, Kings College London & Kings College Hospital) KHP Ventures to do early stage investment alongside co-investors. “We can provide the start up with access to a real world environment to road test ideas and products and to prove viability quickly.” Once viability has been proven, she says other external investors are keen to come in. “They know our audit of clinical viability is far more thorough than the norm. And investing in a business which is plugged into GSTT is also very attractive.” Set up with £12mv so far from the KHP organisations, the fund has so far made ten investments. It is now raising a second fund from external investors which is likely to be around the £50m mark.
Meanwhile, CITI is also keen to encourage GSTT, KCL and KCH staff to be more entrepreneurial. This means systematically identifying entrepreneurs and innovators within the organisation. Who are the individuals who are already creating companies or technologies, who are the people who are minded to do so? Hachach-Haram says: “Innovation and start up culture is clearly not for everyone and that is fine. It is not essential, but we need to identify those with the inclination.”
CITI also plans to have entrepreneurs in residence. “We want to try and match great scientists with business builders. We want entrepreneurs who can come in, meet our physicians and understand the opportunities.”
All this means creating a business-friendly environment. Haram says, for instance, that GSTT is not fixated on zero sum intellectual property games. “You just create frictions and barriers to scale you need to be focused on value creation. The important thing is to focus on the potential and how we can jointly create and maximise value.” She also says it is a mistake to demand too large a slice of equity early on because it can crush promising start ups and reduce their chances of further investment.
For Hachach-Haram, the entrepreneur, the secret behind all this is focus, agility and the importance of failing fast and starting again. ‘You need to tell start ups when the answer is no or you think that what they are proposing is not viable. You need to help people fail fast not shower them with vague maybes.”
All this appears to be working. The 30-strong Citi team and the six analysts and experts at KHP Ventures are all lodged on the same floor. “There is a Google-style buzz with start ups coming into pitch ideas and a constant stream of workshops. The exciting bit is that they are working alongside clinical groups on site trying to solve meaningful problems for our patients” Meanwhile clinician and research staff are more engaged. So far KHP Ventures has made ten investments and CITI is working with a further 10-15 start ups. GSTT is proving that the model works – it can offer huge value as a test bed for new ideas and it can swiftly demonstrate the viability of ideas. And that is quite an achievement.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
