Cleveland Clinic Innovations has parted with its executive director — a move triggered by an investigation from a “government agency” over financial transactions by one of the health system’s spinoff companies.
Gary Fingerhut was executive director of Cleveland Clinic’s powerful tech transfer arm for two years. This shakeup will be felt well beyond that health system, as Innovations also served as the commercialization partner for other healthcare organizations, such as Maryland’s MedStar Health.
The Cleveland Clinic sent MedCity News a statement explaining why:
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We were recently notified by a government agency regarding certain financial transactions involving one of our spin-off companies. The information led to the identification of violations in Cleveland Clinic policy and appropriate actions were taken. Cleveland Clinic was not a part of this inquiry. The current chairman of Innovations will oversee the office while a search for a new executive director is underway.
Cleveland Clinic spokeswoman Eileen Sheil declined to elaborate further.
“It’s our policy not to confirm or deny a possible investigation while it’s ongoing,” said Vicki Anderson, a special agent for the Cleveland division of the Federal Bureau of Investigation.
Given the sprawling health system’s leadership role in life sciences business innovation, questionable “financial transactions” are particularly egregious.
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Cleveland Clinic Innovations has launched 43 spin-off companies, which have attracted nearly $1 billion in equity investment. It’s also considered a top corporate venture outlet for healthcare investment.
Long lauded for its efforts in innovation, Cleveland Clinic has partnerships in place with Israeli healthcare companies, as well as with several other hospitals and research institutes. For instance, it’s built out the Global Healthcare Innovations Alliance – which, on top of MedStar, is working with NASA Glenn Research Center, the University of Notre Dame and several other institutions.
It holds a yearly Medical Innovation Summit which is broadly attended — unveiling each time the top ten most innovative medical technologies of the forthcoming year.
However, Cleveland Clinic Innovations has had its own share of tumult. It’s shuffled through leadership — losing its founding executive director Chris Coburn to Massachusetts-based Partners Healthcare in 2013. Notably, Coburn had a sweet deal in place in terms of equity rights, and made a healthy profit from spin-off exits.
David Strand, another Cleveland Clinic heavy hitter in tech transfer, left the health system in 2009 as part of a somewhat dubious organizational shakeup – but with a golden parachute sendoff that included a $527,000 severance.
Fingerhut has led Cleveland Clinic Innovations since 2013, though he served as acting director beginning in 2010. With a background in health IT, Fingerhut has grown Cleveland Clinic Innovations’ focus on digital health since his tenure began.
Sheil did not confirm when Fingerhut was removed from his role; however, he was still tweeting about Cleveland Clinic Innovations on Monday this week.
Fingerhut is on the advisory board for MedCity INVEST, which is MedCity News’ investor conference – previously called the MidAmerica Healthcare Venture Forum.