28 Nov ProMedica incubator fosters innovation

[Media Coverage] The BladeㅣBy Tyrel LinkhornㅣBlade Business WriterㅣPublished on November 27, 2016ㅣUpdated 7.29 a.m.

ProMedica incubator fosters innovation 

Software, products tested before going into market for use in health care

In Bonnie Rashleigh’s lab, the method for keeping tabs on all the carefully calibrated machines didn’t quite match the sophisticated work her team was doing.

“We used to have clipboards,” said Ms. Rashleigh, the chemistry supervisor at ProMedica Laboratories, as she went to grab a thick binder full of dogeared checksheets. “Here is just one of the daily tasks you have to do for one part of those big instruments over there.”

To meet regulatory requirements, keep track of maintenance, and ensure temperatures are where they need to be, laboratory staff have a long list of daily logs that must be carefully completed.

Until this year, it was done on paper, which could lead to lengthy audits — and potentially costly mistakes.

Now lab employees use tablets loaded with with Assured Compliance Solution. The mobile application was developed in Sylvania Township by Kapios Health, a 50-50 joint venture between ProMedica and Kaonsoft Inc., a software developer based in Silicon Valley.

Kapios is one of three health-care startups housed in Promedica Innovations business incubator, which is aimed at giving new companies a launch pad where they can access ProMedica’s network and expertise.

Assured Compliance, in place since January, has been met with rave reviews.

“Personally it saves me monstrous time,” Ms. Rashleigh said. “But it’s more of that immediate feedback and follow-up to make sure that nothing gets overlooked, nothing gets missed.”

Officials hope with ProMedica’s lab serving as a positive test case, Assured Compliance can be marketed to other laboratories and health-care providers.

That’s a model — develop something in house, prove it works in a clinical setting, and commercialize it for others — that many hospitals are examining. And it’s a key part of what ProMedica Innovations incubator does.

“Obviously the core mission of any hospital is delivering care and also doing research and teaching, but the capabilities that allow you to do that also can have an enormous amount of value in other categories,” said Chris Coburn, vice president of innovation at Partners HealthCare System in Boston.

Before going to Partners, which is made up of Brigham and Women’s Hospital and Massachusetts General Hospital, Mr. Coburn was at Cleveland Clinic, where he founded Cleveland Clinic Innovations.

Mr. Coburn said the idea of innovations programs within hospitals started getting traction a decade ago but has significantly accelerated lately, even among smaller hospitals.

“The same pressures apply and the same highly talented people — maybe in smaller numbers at a smaller hospital — but it still presents the opportunity to take that core set of skills and drive value both in terms of helping patients, but also in terms of finding revenue during a period that most hospitals in the U.S. are under some measure of fiscal duress,” Mr. Coburn said.

ProMedica launched its own Innovations program in 2012, largely modeled in the image of Cleveland Clinic. ProMedica Innovations added a business incubator late last year.

In addition to Kapios, the incubator is home to VentureMed Group, which makes flexible catheters, and Wellopp, which makes patient-facing software aimed at reducing hospital readmission.

Both companies are getting closer to move to their own standalone facilities.

Kapios is somewhat different. Its role is developing and marketing not a single product, but any of the medical applications or software created by ProMedica Innovations inventors. In a way, it’s an innovations lab within an innovations lab.

ProMedica initially used Kaonsoft to develop an app. But leaders from both companies quickly realized they had a lot to gain by making their partnership much deeper.

For Kaonsoft, working with ProMedica meant a way into the booming health-care market — something that officials say is much harder for a software company than one might imagine.

“Even if you are Microsoft, to get into a health-care system you usually have to have a sponsor or someone who can guide you or actually work with you from a health-care side,” said Daniel Lee, Kaonsoft’s co-founder and chief technology officer.

“That’s the thing, there are a bunch of technology companies who are wanting to get into a health-care system. However, it’s not easy to get in. It’s not easy to find the right partner,” Mr. Lee said.

For ProMedica, it provided an expertise in software development that the group didn’t initially think it would need.

ProMedica expected its Innovations pipeline would be filled with medical devices such as the tool VentureMed Group is making for angioplasties. But what officials found was a surprising number of software ideas.

Justin Hammerling, associate vice president of ProMedica Innovations, said at one point nearly 60 percent of the proposals they were receiving were apps or programs.

While plenty of opportunities exist in that area, ProMedica Innovations wasn’t really set up to accommodate them. Their model was device focused: they’d get a patent they could then license or build a startup around.

“For software it’s different,” Mr. Hammerling said. “Software needs updates. There’s different iterations. Who’s going to do that? Is it ProMedica picking up the phone when another health-care system has an issue with the software we sold them? There’s all this support and logistics that goes in the back end.”

Having Kaonsoft as ProMedica’s joint-venture partner gives them that expertise.

In addition to its Assured Compliance, Kapios has two other ventures in the pipeline.

IOSurge is a web-based system designed to ensure billing codes are accurately communicated between scheduling and operating rooms. Officials say scheduling software is typically far less specific than medical coding, which can lead to conflicts. The software also can help avoid issues that occur if a procedure has to change at the last minute.

Kapios also is nearing the launch of ProMedica Go, a mobile app for patients that includes scheduling information and will eventually have maps of the inside of ProMedica’s facilities.

Mr. Hammerling, who also serves as chief executive officer of Kapios Health, said what Kapios does should be beneficial to ProMedica. If it is, it’s paid the development costs.

But it also gets the benefit of being capable of going to market with a product that’s already been tested and proven in the real world.

“I’d say the majority of IT startups in health-care fail because of lack of adoption. It’s not because the product’s bad. No health-care system wants to be a test bed,” Mr. Hammerling said. “They’ll pay money for something that works, but they won’t pay less to take a risk.”

ProMedica officials declined to say how much money they’ve invested in the Innovations program, though they say there’s potential for a major return on their investment.

“I don’t want to give numbers, but it could be quite substantial for the region and a very good percentage of ProMedica’s operating revenue coming from it,” Mr. Hammerling said.

Though Innovations and the business incubator are young, they are getting a lot of interest. So much so that ProMedica announced this month that it has secured an option to purchase the vacant Willis Day warehouse near downtown as a new site for its incubator.

The facility is currently on the campus of ProMedica Wildwood Orthopaedic and Spine Hospital in Sylvania Township.

Doing that, ProMedica President and Chief Executive Randy Oostra said, would provide room for 12 to 15 companies. ProMedica officials have said they already are seeing strong interest in the potential new space. ProMedica also is exploring the idea of virtual tenants for its incubator.

Beyond creating revenue for ProMedica, company leadership say the Innovations program has the potential to become a significant force in northwest Ohio’s economy. Mr. Hammerling said last week that officials want to create 250 non-ProMedica jobs out of the Innovations program in the next three years, a goal that he said is well within reach.

They also want to show venture capitalists that Toledo can be a great place to locate their own startups and feel that ProMedica Innovations can be a sort of anchor for that effort.

“We don’t necessarily want ProMedica Innovations to be the only startup game in town. We want to be that initial source of attention so [venture capital] money can take a look at Toledo and, oh by the way, look at what other startups outside of ProMedica and outside of health care are doing in the region,” Mr. Hammerling said.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.

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