Dive Brief:
- While it's still unusual, some hospitals have begun developing and selling technology to build revenue rather than simply using it to improve their internal operations.
- For example, MedStar Health's Baltimore region and the Cleveland Clinic are developing and selling new health technology to build their profitability. At MedStar's Washington offices, which house its Institute for Innovation, employees take new tech ideas and turn them into commercially salable products that they believe can be profitable.
- Cleveland Clinic is not only building and selling profitable technology, it's using the practice to recruit employees interested in the development process.
Dive Insight:
Until recently, it was very unusual for hospitals to step outside their internal IT affairs and reposition their IT development projects for outside sale. However, this is increasingly becoming the case, with some hospitals creating "innovation spaces" more typical of venture capital incubators. For example, as Healthcare Dive reported last month, New York-Presbyterian Hospital has integrated a tech startup incubator into its IT plans, renting out space to New York-based accelerator Blueprint Health LLC and housing computer systems of its own in Blueprint's offices in an effort to be at the forefront of tech innovation.
Perhaps the granddaddy of health systems with commercial IT development efforts underway is the University of Pittsburgh Medical Center, the nation's highest-grossing not-for-profit with 2014 revenues of $12.21 billion. Previously led by shrewd former CIO Dan Drawbaugh, UPMC runs its own Technology Development Center, where roughly 200 techies toil to find new commercially-viable health IT products. UPMC's last success in this area was its investment in data management vendor dbMotion in 2006; Last year, after developing dbMotion's software for its own and others' use, UPMC made $67.8 million when it was acquired by Allscripts.