LSU Health is among participants in the specialized venture fund, which is open to other health systems.
Physicians and other clinicians have a lot of ideas to improve healthcare through digital innovations yet helping them commercialize those solutions is a challenge for many organizations, particularly when staff devoted to these endeavors already operate at capacity.
LSU Health New Orleans has found a solution to this dilemma by joining Vantedge Innovation Alliance. The Alliance is a network of health systems partnering with Vantage Ventures, a Chicago-based innovation firm and venture fund that helps these institutions commercialize innovations from within their systems. This approach offers an interesting alternative to the "do-it-yourself" model, exposing participants to additional expertise, support, and incubation opportunities among the membership. The Alliance is currently open to additional health systems.
5 Openings Available to Health Systems
Members invest to participate in the $50 million fund, which can accommodate 10 health systems. The amount of each participant's investment was not disclosed. LSU is the first to announce its participation, and five vacancies remain. Ideal candidates are regional health systems with four to 12 hospitals, at least $1.5 billion in net patient revenue, and an innovation staff of two to four members, says Kyle Hathaway, co-founder and managing partner of Vantedge Ventures.
While similar venture funds exist, and activity is "heating up," says Hathaway, "Our focus is unique. A few organizations have focused on helping health systems ingest external innovation. We saw a need to help them to commercialize their internal innovations and get them to market."
Vantedge Ventures will take health system members through a process that involves:
- Vetting ideas formulated by the health systems
- Supporting development of the innovations and reducing risk
- Forming startup companies that will be incubated among Alliance members
- Offering commercialization services to create scale
Alliance Addresses Reasons Innovations Fail to Launch
Health systems seem to have difficultly successfully launching these ventures on their own, Hathaway says. In reviewing the landscape, his firm saw development of a significant number of digital health applications that "either weren't being fully adopted [after] the pilot or floating along listlessly without any real expansion or growth. The exit market for those solutions has been less than impressive," he says. With a pressing need for healthcare innovation, his firm believes health systems are in the best position to create solutions, "because they truly understand and are prioritizing their own needs. We wanted to tap into that and then expand across a larger market."
Another advantage to this approach is "alleviating the regionalization of innovation," says Hathaway. Working with the Alliance and the experts at Vantedge Ventures provides access to broader perspectives, he says. "A hospital can spend a lot of time and millions of dollars to create an innovation only to find out that there's a competitive market out there. Health systems are not really built to compete or commercialize businesses."
Approach Will Bolster LSU Health's Efforts
Patrick Reed, MS, RTTP, director of the Office of Technology Management at LSU Health New Orleans, says that the Alliance will provide exactly the support his organization needs. "My office is responsible for evaluating all of the new inventions developed by our faculty. Traditionally, we serve the research faculty, but because we're a health sciences center with a medical school, a dental school, etc., I don't always get in front of our clinical faculty is as often as I would like. That's the focus of Vantedge Ventures. They are interested in teasing out the clinical innovations that our physicians might develop."
“LSU Health New Orleans clinical faculty have invented technologies, providing new approaches to treatment and improving outcomes for a number of health conditions over the years,” said Larry Hollier, MD, LSU Health New Orleans chancellor in a news release. “This new relationship with Vantedge Ventures will provide a greater level of support for the successful development of physician-led innovation, boosting the local economy and benefiting patients here in Louisiana and around the world.”
Jami Youmans, co-founder and managing partner of Vantedge Ventures said in the release, “Our partnership, coupled with the resources of our healthcare collaboration partners, creates a truly unique and powerful offering in the healthcare innovation ecosystem.”
Mandy Roth is the innovations editor at HealthLeaders.
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