When Amazon stated it would take bids to host the Seattle-based giant's second headquarters, most cities perked up and are in the process of putting on their Sunday best to compete for the $5 billion and 50,000 workers the move would clench for the anointed city. Some cities even went to extremes to get noticed; one Georgian city said it would change its name to Amazon if chosen.
In early September, the city of Pittsburgh announced its intentions to compete for the bid. And it makes sense, Pittsburgh has seen a rise in innovation and is on the precipice of gaining a foothold in a changing global economy. The Steel City boasts marquee names in the tech space as residents and already has been a set piece for Uber's self-driving car experiments.
While the likes of Google, Amazon and Facebook host offices in Pittsburgh, the state's largest nongovernmental employer is the University of Pittsburgh Medical Center (UPMC) with nearly 80,000 employees. UPMC's venture arm, UPMC Enterprises, has been a star in the city's burgeoning innovation district. By investing in and creating strategic partnerships with startups, UPMC Enterprises is looking to grow its brand with an eye on the future of healthcare.
It's an important moment in the history of Pittsburgh. The city's population is declining and some researchers worry it won't attract outside talent. The city claimed an estimated 303,625 residents in July 2016, which is only slightly lower than the previous year. Births are down while deaths are up, calling for the need to inject talent into the city if it's to grow beyond its current capabilities. To that end, UPMC, by building itself as an innovative brand, is using tech and forward-thinking to help attract talent and push healthcare practices forward.
Pittsburgh is making waves in innovation but has seen better days
The Steel City has seen its ups and downs in the past number of decades. A recent Brookings Institution report that characterizes Pittsburgh's place to potentially become a global innovation city states the city's unemployment rate surged to 18% in 1980 after the industrial foundation of the city's economy collapsed. While the unemployment rate in July 2017 was 5.4%, the success is anchored in the fact that the population is declining.
Scott Andes, fellow with Brookings' Anne T. and Robert M. Bass Initiative on Innovation and Placemaking and an author on the Brookings' Pittsburgh report, doesn't sugarcoat the population trends. "They're not good," he told Healthcare Dive. While the metropolitan statistical area (MSA) for Pittsburgh is broad, the core of the city — The Oakland District — has been doing well and a large reason for that can be attributed to healthcare jobs, Andes said.
He added the three big institutions — UPMC, University of Pittsburgh and Carnegie Mellon University — are helping to position Pittsburgh to propel itself into a global innovative city. "The 'eds and meds' mix that has translated into advanced manufacturing...has given Pittsburgh a new breath of life [into] a city that was basically broken in the 1980s," Andes said.
UPMC is all in on innovation
UPMC, through its venture arm, UPMC Enterprises, is working to bring innovation and technological advancement not just to the Pittsburgh area but also to the healthcare industry at large.
Recently, the business has re-strategized its focus areas into four core components:
- Translational science: Moving best practices in science to narrow the space between bench science and bedside practice.
- Consumer: Developing solutions that allow patients to access medical services in all steps of the healthcare journey.
- Improving outcomes: Connecting and coordinating health systems to empower clinicians.
- Infrastructure: Delivering healthcare in a manner to take waste out of care delivery and move from brick-and-mortar hospitals into the patient's home.
"We're continuing to push on our original strategy that is able to leverage the living lab at UPMC" to push the envelope forward, Dr. Rasu Shrestha, chief innovation officer at UPMC and EVP at UPMC Enterprises, recently told Healthcare Dive.
UPMC Enterprises has been building out its portfolio and aligning itself with strategic partners such as digital prescribing/analytics platform Xealth, supply chain company Pensiamo and online behavioral wellness tool Lantern.
Xealth is an addition in the last year, Shrestha said, and looks to bridge the divide in what's traditionally happened in the EHR realm and what's been proliferating in the last couple of years around apps, mobility and consumers leveraging digital health platforms. Through the Xealth platform, a clinician can "prescribe" apps to patients, which creates a bi-rectional interface where the data are able to be tracked and pulled back from the apps to a clinician in a consumable manner.
Through its Lantern investment, Shrestha says UPMC has piloted CPT protocols working with behavioral health specialists to refine care delivery models in the mental health space through mobile platforms. Such initiatives seek to create a stickiness with the tools but Shrestha adds getting the data to flow back and forth is important. "That's something we're trying to push forward," he said.
These investments come at a time when hospitals and health systems are changing how they fundamentally view what business they're in, Andes said. He sees providers questioning how their consumers perceive and use healthcare. Using technology as an enabler, "that's the philosophical aspect that needs to change," he said. UPMC's investments aren't done to solely create medical devices, Andes said, but to get into data analytics. "For them, it's how...they understand the patient and provide care that makes revenue but remains competitive with CVS Minute Clinics," he said.
Pushing the envelope and shifting out of the heads-in-beds mentality and into an outcomes focus has long been UPMC's M.O. While Shrestha says the industry as a whole lives in a fee-for-service model, he says organizations like UPMC are in the driver's seat for fee-for-value. "Part of the biggest thing we're trying to do is to show by doing," he said, adding that his team is focusing on data driven decisions to prove that new models of care delivery work.
Going against the heads-in-beds model can be difficult when that's been the traditional measure of success in the industry for years. "If you're able to specially show success and show how, as a system, you're able to save costs across the board and, more importantly, improve outcomes for patients, then you have the right makings of a revenue model overall that [show] this can be done," Shrestha said.
Competition among innovators
Talent is what makes an organization what it is, Alexi Nazem, co-founder and CEO of healthcare jobs market platform Nomad Health, recently told Healthcare Dive. To him, finding, training, keeping and growing healthcare talent is one of the most important things an enterprise can engage in.
This is something UPMC understands and, from an innovation perspective, faces some strong competition. UPMC's competitors aren't other health systems, Andes said. It's the likes of Google and Facebook and Amazon. "Talent is one of the most critical aspects of how we determine whether or not we work with an entrepreneur, an individual or a company," Shrestha said, adding that culture is largely tied to talent. Shrestha at UPMC Enterprises is positioning the company to foster a company culture that's inquisitive, curious yet full of intelligent doers.
At the same time, "when we're talking with data scientists, I know they're going to go upstairs afterwards and meet with Google," he said. Shrestha's response: You don't have to have a white coat and a stethoscope around your neck to make a difference in a patient's life. He believes many answer the call to enter the healthcare field because they can make an impact in something greater than themselves. Amy Cook, chief talent leader at UPMC Enterprises, told Healthcare Dive that the entrance of Uber and Facebook into the Pittsburgh area has given UPMC better access to tech talent. UPMC, through its work as a payer-provider integrated system, "wins the mission game every time," she said.
The system in recent years has made an effort to build itself as a brand recognized for innovation and its tech-savvy in hopes to attract workers to the Pittsburgh area. So far the effort is working. Matt Rimer, VP of talent acquisition at UPMC, told Healthcare Dive that in FY2017, the system as a whole filled about 18,000 positions with 11,000 of those being external hires. This was an increase from the previous year by about 750 people, Rimer said. The system received about a half a million applications from about 120,000 applicants during the same time period.
The use of cutting edge technology such as artificial intelligence and machine learning has helped attract about 24,000 applicants from outside the region since January 2016, he added, stating affordable housing and the richness and access to nature, arts and sport are all attractive options to outside applicants.
Healthcare is projected to see growth but will Pittsburgh?
The healthcare sector — driven in part by the silver tsunami and the growing demand for healthcare services — is expected to grow in the coming years. With the growing demand and the trend toward more networked approaches among providers, both clinical and technical healthcare professionals will be in demand for years to come.
At a micro level, Andes says UPMC may look at how it competes with the larger tech companies that are beginning to infiltrate the healthcare space. How they leverage, create and deploy technology to compete with those emerging healthcare entrants "will define its success."
He added the current population trends for Pittsburgh are a liability, but those trends will be a lagging indication of investments made in the region. What happens next to the city, Andes posited, will depend on whether or not the already developed entrepreneurial assets in the city stay in their own domains. If they do, Andes expects Pittsburgh will have a small but healthy advanced economy, but it won't be comprehensive.
In the Brookings report, the authors made a number of recommendations for the city including, improving the pipeline of high-growth entrepreneurs and creating a talent alliance within the Oakland district. "While a number of workforce programs already exist, the purpose would be to aggregate employment demand in hard-to-fill occupations in healthcare, research, and education," the authors wrote.
The innovators and the city should look to leverage and pull assets into the broader economy where companies cluster around the entrepreneurs and build new companies that grow and employ workers, according to Andes. If that happens, he expects to see "phenomenal economic growth" in Pittsburgh.