Some politically incorrect thoughts about healthcare

The more I work with hospitals, the more I believe hospitals are uniquely positioned to benefit financially from discoveries in the medical field. This is not only true for cutting edge research but as well for any operational or management related initiative. Hospitals may be an outstanding partner for start-ups willing to enter the marketplace.

But the more I work with hospitals, the more I see they don’t get it. They don’t see the potential and they do nothing to capture it. Why?

(1) Most healthcare managers still see innovation as a task. Most physicians still ask questions such as “I am already seeing patients, doing research, teaching… and you you want me to innovate as well?”. Well, innovation is not a task, it is not something that has to be done, it is a state of mind. Innovation is a permanent questioning of how we can do things better. You can innovate while you see patients, while you do research, or while you teach. But you need to see things differently, you need to be constantly looking for needs.

(2) The idea that hospitals should be promoting and funding healthcare start-ups that are designed to have a profit is still politically incorrect. For most CEOs, nurturing healthcare innovations should be directly tied to a nonprofit's mission… Well, I am afraid this may be politically correct, but from an “efficiency” point of view, it may be totally nonsense. Improving healthcare should not be a cause, but a “business”. If it is just a cause, many start-ups won’t flourish, and important innovations that were meant to save thousands of lives or make patients lives better won’t never reach the market.

So, if you are a hospital CEO, a medical director, a healthcare manager, I beg you to see the innovations around you as potential venture capital (VC) investments… Try to see reality with a different mindset. VCs aren’t dreamy idealists. They are indeed ruthless realists. They’re pragmatists, looking for returns on investment, and a piece of the future action. Successful VCs try to define the risks they have to take and to minimize them as much as possible. They’re not risk-focused but opportunity-focused. They are looking for unfilled niches. And when they find one, they invest in it, and they profit from it.

Nurture and invest in the innovation that flourishes at your hospital trying not only to do good, but to capture value as well. Innovation is a for-profit business if you want to do it well. Sophisticated hospital executives are increasingly realizing the potential benefits of such an investing philosophy.