Startups, Health IT

Cleveland Clinic’s commercialization arm: What healthcare entrepreneurs need to know

Tom Sudow, Cleveland Clinic Innovations director of business development, will be taking part in a panel discussion on how health systems work with startups at the MedCity INVEST conference May 17-18 in Chicago.

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 If you’re a healthcare entrepreneur considering pitching Cleveland Clinic’s commercialization arm  Cleveland Clinic Innovations, be forewarned. It will be a methodical process that will probably seem achingly slow for those unfamiliar with the healthcare sales cycle. You should also be prepared to explain the clinical need for your product because if you can’t, it’s a dealbreaker. The process also varies from company to company.

Those are just a few pieces of advice from Thomas Sudow, who serves as director of business development at CCI. He will be taking part in a panel discussion on how different healthcare organizations, including Cleveland Clinic Innovations, work with startups at the MedCity INVEST conference May 17-18 in Chicago. In a phone interview, he shared some insight into how the institution selects startups and more mature health IT and medtech vendors.

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The organization has been around since 2000. Since then it has overseen the development of 3,400 inventions, 800 patents, and more than 40 spinoffs.

Thomas Sudow Cleveland Clinic Innovations director of business development

Thomas Sudow, Cleveland Clinic Innovations director of business development

“We pitch and we catch. We look for certain technologies to solve RFPs, but because of our brand, hundreds of thousands of startups approach us.”

Searching for technology innovation starts at home. But CCI also courts companies in an effort to fulfill an RFP from a particular department. Incubators and accelerators are also a source of interest, so long as they are properly constructed, Sudow said.  He is a bit partial to the one Cleveland Clinic supports — eHealth Ventures. The digital health incubator works with Israeli startups. In addition to the Cleveland Clinic, other partners include Israeli HMO Maccabi, Amgen, Israeli specialty pharma business Medison Pharma, and Chinese venture capital fund SCI.


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Sudow points out that there are two kinds of healthcare innovation technologies his group hunts for — those that have the secret sauce that makes the Cleveland Clinic tick and those innovations where there is a commercial opportunity.

He identifies one problem he sees with a lot of startups — their technology is a solution in search of a problem. 

“For us, it starts at the bedside. It starts with a problem but the only way it can get back to the bedside is to go through a [clinical validation] process.”

Health IT companies need to demonstrate clinical validity, produce scientific proof and prove that their business model is commercially viable.  And yet, one of the complexities of healthcare tech is that the patient who is using a device, drug or service isn’t paying for it, the doctor is selecting the treatment and a third party pays for it. So it has to be a product that satisfies each of them.

“You need to either improve patient outcomes or improve healthcare operations to make hospitals more efficient. So much of what takes place in digital health, and a lot of what I have seen, doesn’t solve problems,” Sudow said. “When I ask [a company] to tell me how their product improves clinical care,” if they can’t answer that question, what’s the point?

Sudow recalls a company that pitched to him eight years ago with a wrist-worn wearable device that can track blood pressure 24 hours a day. “I asked, ‘So tell me what a clinician can do with that information.’ And he couldn’t answer that question.”

He advises aspiring healthcare entrepreneurs to work with people early on who understand clinical needs and what hospitals are looking for.

“A lot of people try to tell us what our problems are. We know what our problems are.”

Asked what intrigues him in the way of emerging technology in healthcare, Sudow says artificial intelligence and using virtual reality to support training. In fact, Sudow says VR technology is so well developed that academic medical center will do away with cadavers and use VR for procedure training once a new center opens in 2019. He is also keen about its applications for reducing pain and anxiety.

He also finds AI associated with medical imaging particularly compelling when used as a clinical decision support tool.

“It doesn’t make the diagnosis; it points out areas you may have missed, that you may want to look at more closely….such as detecting a stroke.”

Of course, we couldn’t end the conversation without touching on Dr. Toby Cosgrove’s recent announcement that he’s vacating the post of Cleveland Clinic CEO. Although he hasn’t “seen the white smoke” indicating a new leader has been selected, Sudow said he expects the tradition of selecting a physician to lead the health system to continue. Asked if he expects the incoming CEO to change the way CCI operates, Sudow sounded optimistic. 

“A great thing about Cleveland Clinic is it has stayed ahead of the curve. The new person coming in has a really good game plan to follow.”

Photo: Yuri_Arcurs, Getty Images