Chapter 5: Products

Completing the Virtuous Cycle

The ultimate goal of mission-driven innovation is the improvement and extension of human life. There is a genuine idealism at the core of our work. Yet some people blame the rising cost of medical technology for the nation’s current crisis in healthcare costs, which is not a fair accusation. In fact, the contrary is true. The virtuous cycle of medical innovation actually helps to control the cost of healthcare delivery. To help make this case, I’m going to describe the products of the virtuous cycle. I’ll break them down into four principle domains and review some of the obstacles that must be overcome before products find their way to patients’ bedsides. I’ll make the case that medical innovation is a worthwhile pursuit from an economic standpoint. Finally, I’ll introduce a process that is in many ways the social counterpart to mission-driven innovation: value-based innovation.

Outputs and Outcomes

To evaluate medical innovation in general, we have to understand its outputs in particular. For many in healthcare, medical innovation means hardware: surgical instruments, prosthetics, and imaging devices. But it also includes pharmaceuticals and, increasingly, software. At Cleveland Clinic Innovations (CCI), we divide our innovation activities into four domains, each corresponding to a distinct output. They are:

• Medical devices

• Therapeutics and diagnostics (Pharma)

• Health information technology (HIT)

• Delivery solutions

Let’s look at each domain, review its products, and consider some factors that may influence the cost of bringing them to market.

Medical Devices

Medical hardware has historically dominated CCI’s portfolio of gestating devices. Although it makes up 60 percent today, it was as high as 66 percent in 2008. This is typical of any innovation function in its early years. It’s easier to organize your efforts around something everyone can see, understand, and touch.

This emphasis on tangible devices in part reflects Cleveland Clinic’s long history of device innovation. Since the 1920s, our clinicians have continually improved the tools of the trade, from surgical retractors to gastroscopes. The other reason CCI rose to prominence as a commercialization engine for medical devices is rooted in the industrial heritage of the region and the “maker’s spirit” that pervades local culture.

CCI was founded in this spirit. To grow a world-class medical device commercialization function, we needed to aggregate, maintain, and refine our model-building, legal, and regulatory capabilities. We recruited biomedical engineers and built them a sophisticated fabrication shop with five-axis milling machines, 3-D printers, lathes, and experts to run them. We assembled a legal team with experience in the protection of intellectual property (IP) in the device space and regulatory expertise to help navigate the U.S. Food and Drug Administration (FDA) environment.

Our labs brought forth one solid, weighable object after another: artificial hips, hearts, and kidneys; valves, clips, and instrumentation; stents to keep ...