Episode #7: Innovation Insights from the Largest Medical Center in the World, Texas Medical Center
In this episode, co-host Carrie Nixon talks to startup veteran and Director of TMC Innovations, Tom Luby, PhD., and Emily Reiser, PhD, Senior Manager of Community Engagement, about how the largest medical center in the world looks at the innovation ecosystem and the future of healthcare.
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In this episode you’ll discover:
What the ecosystem of innovation looks like at TMC Innovations;
How TMC Innovations helps startups via accelerators, resources, and their venture fund;
How they’ve seen health system partners work with digital health companies;
How specific digital health startups are adapting and thriving during the pandemic; and
What they think is the most pressing need in healthcare in the next 3 years.
Keep scrolling for a transcript of this episode.
Read the transcript:
Tom Luby (00:00):
We keep sort of theming that you have to understand your costs and that just isn't about what you charge. It's about who gets paid, when they get paid, how they get paid when you're involved, when your stuff comes to line, who doesn't get paid. So really thinking about the economics because more and more pressure is going to become to bear about the costs.
Announcer (00:21):
You're listening to Decoding Healthcare Innovation with Carrie Nixon and Rebecca Gwilt, A podcast for novel and destructive healthcare business leaders seeking to transform how we receive and experience healthcare.
Carrie Nixon (00:34):
Hi everyone, this is Carrie Nixon with Nixon Gwilt Law and I'm coming to you with decoding healthcare innovation. Today I am delighted to be joined with Tom Luby, the head of innovation at Texas Medical Center, and his colleague Emily Reiser, the head of community at TMC Innovation. Tom Emily, welcome to the podcast.
Tom Luby (00:54):
Carrie, great to be here.
Emily Reiser (00:56):
Pleasure to be here, Carrie.
Carrie Nixon (00:57):
Great to have you. So Tom, start off get us started a little bit and tell me a little about TMC Innovations. I know you all have gone, kind, undergone kind of a revamping recently and I'd like to hear more about it.
Tom Luby (01:10):
Sure, Carrie, happy to share it. It's probably easiest if I put it in the context of what Texas Medical Center is. If you're in Houston and you say you work at the Texas Medical Center, or as it's known TMC, people know that as a geographical region in town, it's, it's a huge area, just southwest of downtown. The next question I always get is what hospital you work for? And I'm like I don't work for one of the hospitals. I work for the Texas Medical Center, and then many times I get a puzzled look after that. So Texas Medical Center is a corporation that was created 75 years ago to encourage health research and education here in the city of Houston. And we own a 1400 acre plot of land southwest of downtown on which 62 member institutions sit literally right next to each other.
(02:01):
So some of the big enterprise brands in healthcare, MD Anderson, Baylor College of Medicine, Texas Children's, Texas Heart, the list goes on, all share common land with us, and it's our mission to bring them together. We run a lot of the infrastructure here including the roads, the parking, the police, those types of fundamentally basic but incredibly important aspects. And we also run an innovation program here, which Emily and I help to coordinate and collaborate between the member institutions, really thinking about ways to create an opportunity for healthcare startups to take advantage of this massive density of healthcare clinicians, research funding, entrepreneurial mindsets, research universities, et cetera, all located in a super cluster here just southwest of Houston downtown.
Carrie Nixon (02:53):
And I suspect that super cluster nature is a big factor in driving some of the innovative thinking that goes on. Is that right? Do you have people collaborating together all the time?
Tom Luby (03:04):
Yeah, I think that's a combination of the resources that are available to people here, both in terms of people and talent. 120,000 healthcare professionals come to work every day at the medical center. There's billions of dollars of NIH and other grant funding that flows into each of the member institutions and a number of universities located in and around the medical center, including University of Houston and Rice University. Mix all that together, plus a little dash of the general spirit of entrepreneurship that takes place in Texas and in Houston specifically. And it comes out that there's a lot of people thinking about ways to commercialize much of the thinking and intellectual property here at the medical center.
Carrie Nixon (03:50):
Absolutely. And in fact isn't TMC the largest medical center in the world?
Tom Luby (03:56):
It is. You are absolutely correct.
Carrie Nixon (03:58):
In fact. Okay. Well I didn't know that actually before you and I spoke just before the podcast, and that really says something about the breadth and depth of folks that you have working there. So talk to us a little bit about the role of early stage companies and startups at TMC Innovations.
Emily Reiser (04:20):
So at TMC Innovation, we're really looking to support our member institution partners, understand what are their priorities and what are their needs. We can have this information accessible to us and then leverage that information to go out and recruit the highest quality of startups that are well-matched to those needs. Because we've built these relationships over time, we can help these companies translate what they're working on to be well suited to our health system partners. We can really understand who's gaining traction across different health systems and who's really able to scale in the digital health space, which is a big challenge that investors and other partners are really trying to better understand in this environment. So for us as teams, innovation, being able to bridge that divide between the healthcare startup and the health system is really what we're here to do. Once we find companies that are well suited to the needs of our member institutions, we wrap around a lot of different support for them, access to resources, advisors and mentorship to help them be successful.
Carrie Nixon (05:30):
Terrific. And how do these startup companies find you? Is it just your reputation and they apply to become part of TMC Innovations?
Emily Reiser (05:38):
We have several programs that open applications at which we open to the entire community. We certainly do leverage recommendations from our trusted partners. Those recommendations come from the health systems themselves, from our advisor, community, investor community, and all of the other mentors that support our programs. So it's certainly a combination of looking to attract the best talent from around the world and then also leveraging the relationships with trusted advisors that we've built over the last six years.
Tom Luby (06:10):
I would add that we have a venture fund that we help administered as well, and the funding is incredibly important for the startups, but the connectivity back to other investors that we've in startups allows us to gain insight to what their interests are, and obviously other startups that might be interesting to us to invest in. Plus we've established three international programs, so we recruit startups directly from Australia, from the UK, and from Denmark through our BioBridge program. Gives them a great opportunity to have a unique place to land for the first time in the United States because of the density that we have for potential, obviously insight, but customers from their perspective as well.
Carrie Nixon (06:53):
Absolutely. So what stage are these companies, these startup companies, typically at when they get to you? Are they very, very, very, very early on or are they some of them in a much later stage of early stage, so to speak?
Tom Luby (07:09):
Yeah, they can be pretty broad in terms of their stage. We run a biodesign program here where we recruit individuals, so talented individuals from around the world to come and go through the needs finding process of biodesign and then launch a company around a solution that they've come up together. So these are people, not even companies. So that's like in the pre plasmas stage, if you will, all the way to companies that come into our health tech accelerator, for example, looking for the opportunity to engage with an enterprise customer here at the medical center. So sometimes they'll certainly be through series A, sometimes series B funding with relatively big teams and enterprise sales experience under their belt. So we feel like we have an opportunity, the types of engagements that fit for early stage through later stage.
Carrie Nixon (08:05):
That makes sense. And I also really love the notion of building a solution around a problem first, not start not necessarily starting a company and figuring out the solution, but having a customer in the form of a health system say, here's a problem that we're struggling with can you help us come up with a solution to address it? That seems like a no-brainer way to get a company started.
Tom Luby (08:34):
Yeah, it really creates great differentiation for us if people think about different opportunities as a startup where you could go, especially in the world of healthcare accelerators, which one you might want to choose. We're very selective about the companies that we work with. We have to feel like we can be helpful to them and really want to drive a value inflection point for them. And that customer first, understanding the customer need and then matching that up with a startup creates a really wonderful dynamic at the beginning that allows them to get early traction and usually a productive time spent with us.
Carrie Nixon (09:15):
Terrific. So I'm hearing we have an accelerator component and we have a venture component as part of this overall ecosystem. How do those two interplay? Is it always the case that the venture fund makes an investment in one of the accelerator companies or how does that work?
Tom Luby (09:34):
The two are work closely together. All of our programmatic pieces work together because we're a team of 14, so there's not a lot of mysteries when we talk about different startups, but we use our accelerator programs as diligence vehicles for investment, that's for sure. There's nothing like six months of in-person diligence to get a better sense of whether or not it makes sense to invest. Our venture fund isn't limited to just TMC Innovations programs, though there's the opportunity for healthcare companies to come to us and then for us to get to know them and more traditional roots as well. But it certainly helps when you're thinking about investment, to know the individuals that are behind the companies to know the entrepreneurs themselves as well as you can gives you great comfort when you think, and additionally to know that there's the potential for some sort of strategic relationship before you write a check.
Carrie Nixon (10:32):
Absolutely. It seems to me that the ability to get to know the team and how the team functions and works over the course of, as you say, six months, really gives you some good insight as to whether or not this company is going to be likely to succeed. And in addition, how receptive they are to feedback through the process of working with them in the accelerator. I know with some of the clients that we work with, you have some who are very receptive feedback and some not so much, but tell me a little bit more about how you engage with those companies and those founders.
Emily Reiser (11:15):
So we are really seeking to understand what their intention is in the Texas Medical Center environment and how adaptable they may be to feedback, not just from our team, but from all the experts that we bring in to support their strategic development while they're here. So it's certainly our intention to curate a plan customized to each startup that's reflective of the goals that we hope to reach with them while they're here. But we certainly have a range of success stories and it's really tied to how receptive those founders are to the feedback and iterating on that as they move forward throughout not only the program, but beyond.
Tom Luby (11:57):
Yeah, we really love curious people that come here and ask us a lot of questions, really trying to understand the different systems that we have, our corporate partners that mix for not only probably better relationships and more engaging conversations, but better chances of being successful at the end. If you come and tell us everything and just make introductions we're a little less convinced that you actually probably do know everything. Curious people tend to be more successful in our minds
Carrie Nixon (12:31):
If they believe they know everything. It's like, well, what you really need from us, then you got it covered. Right,
Tom Luby (12:36):
Very true.
Carrie Nixon (12:37):
Yeah. So you know, have this network of advisors, as you talked about wrapping around the early stage companies that you work with. What types of advisors do you all have as part of your network?
Emily Reiser (12:52):
Well, it really ranges. So we have a lot of startup founders in our community, some who've gone through our accelerator in the past and look to provide valuable mentorship back to our community and others that have been a part of this for the last several years as well. We also have a lot of advisor within our health systems, clinicians, champions, people that want to be involved in the innovative process. Also those that have left the health systems but still really want to be involved in healthcare Innovations are another valuable aspect of our community. Beyond that, of course, we have different service providers and expertise from regulatory reimbursement and beyond that really look to provide both strategic guidance and then sometimes frameworks by which the companies can move forward. So we really take a look at it holistically but really centered around former founders as well as those with health system experience.
Carrie Nixon (13:46):
So how do you define success for a company that is part of your portfolio?
Tom Luby (13:52):
Yeah, that's a great question. We were just, it's funny, we always tweak around a little bit of how we tell our story because it's a unique place. We have all these member institutions, yet we're not a hospital ourselves. We are engaged with member institutions in corporate partners. We do some bio design work, we have a venture fund, we run a couple of accelerators and it can get a little bit confusing. It's like, wait, what is all of that and why do you need all that? So we tend to tell our story through the eyes of companies that we've worked with before. We talked yesterday a little bit about Trusted. So Emily, maybe that's a good story to share here as tells a little bit about how they've been able to take advantage of the different offerings that we have for startups.
Emily Reiser (14:37):
Yeah, absolutely. So Trusted Health is a nurse staff management platform, so certainly a high area of interest right now across health systems across the country and the world. They came through our accelerator program in 2016. We ended up investing in the company in 2018 and 2019 particularly because they had been successful in acquiring a customer here in the Texas Medical Center as a portfolio member of our fund. We were also able to get them additional resources to build out a new customer pipeline when they launched the second version of their product. And that product was first rolled out here in the Texas Medical Center as well. So we're really looking at that story as an example of a great team with a high area of unmet need that was able to sustain great value for one of our member institutions over a long period of time. And we were privileged to be able to support them through that journey and continue that over several years.
Carrie Nixon (15:40):
I mean, that's a terrific example, and you've worked with hundreds and hundreds of startups, I'm sure over the years. One topic that we're seeing that is very, very hot right now, of course is the topic of virtual care services. Obviously the pandemic sort of raised everyone's attention to the importance of virtual care, including telehealth and remote patient monitoring. Do you have a company in that space that you could talk about a little bit and how they sort of navigated through the pandemic?
Emily Reiser (16:16):
Yeah, I think it's such a great area to discuss and listening to one of your previous podcast, Carrie, around how the reimbursements were recently changed and how that really opened the floodgates. You were discussing the rule about needing to have 16 days within 30 to have data transferred. And the other thing that I was reflecting on when you were talking about that in a previous episode was that what is somebody on the other end on the health system side going to do with all that data? And so when we talk to our health system partners, it's really about how are they managing this influx of data that's coming in with remote patient monitoring. How do they need to staff to manage that? Where does it go within the records and how does it all get integrated eventually? So these are all questions that everybody's asking collectively and that we are needing to be aware of as we work with remote patient monitoring companies ourselves.
(17:10):
My favorite example of a recent success story in the space though is Patched Medical. They use off the shelf wearables and a proprietary algorithm to detect sepsis at home. The founder's story is really incredible and Rob is one of my favorite founders. So this company had developed these algorithms already and tested it on retrospective data, but coming through our accelerator two years ago was able to establish a relationship with one of our member institutions and only recently started the first prospective study of detecting sepsis at home on our campus. The reason why I love the story is he was really able to pick a use case where there was a care team already set up to receive that data, and now patients are going home with this device and potentially having this lifesaving data transmitted to the hospital and that care team directly. And that workflow is of course still being worked out through the study, but has really been a key area why I think that that company was successful at launching that collaboration so far.
Carrie Nixon (18:16):
Yeah, I mean you mentioned workflow and it's really important to emphasize workflow as a component of how any type of digital health or other healthcare innovation company is working with folks on the ground, whether it's the providers on the ground or the patients on the ground, or both. There are operational workflow issues that result from the use of any kind of technology like this. And it's really critical to take those into account because you can have, I think, the best technology in the world and if it doesn't appropriately fit into an easy to use workflow for the providers who are treating the patients, it's not going to be of use. Right.
Tom Luby (19:02):
Yeah, it's a great point. And one of the things that Emily mentioned before is we like to tap into some of our entrepreneurs and founders who've been through our program and have successfully launched into the enterprises to have them feedback some of those lessons to our earlier stage companies as well, because companies get tripped up on that all the time.
Carrie Nixon (19:22):
Absolutely. I see that as well. So I want to ask you two more questions before we wrap up. Tom and Emily, quick end from each of you. What is the most pressing issue that you see over the next three years for healthcare?
Tom Luby (19:41):
Well, I mean, I think that the easiest one is the cost burden that healthcare just generally is driving into society and how we're going to manage that. You know, start to see in single payer countries the capitation of costs because you just can't afford it. And with some of the new therapeutics that are coming forward, they'll add additional costs. Interesting article in the New York Times the other day about costs in the hospital and price transparency in the hospital. So we keep sort of theming that you have to understand your costs and that just isn't about what you charge. It's about who gets paid when they get paid, how they get paid when you're involved, when your stuff comes to line, who doesn't get paid. So really thinking about the economics because more and more pressure is going to become to bear about the costs less and less opportunity to charge costs without clear justification about how that's offsetting other things in the healthcare systems. We expect that only to become more and more part of the conversation moving forward.
Carrie Nixon (20:46):
Yeah, I agree. And along those lines, sort of the longer term longitudinal data around the overall cost, the longer term cost of care, so not just the cost at the point of care and at that time, but how does that cost at that time influence the longer term cost of care?
Tom Luby (21:09):
Yeah, that's exactly right. So if we're going to eat the cost now, how are we saving costs on the back end that's going to be all involved in outcomes and other efficiencies. And technology's got an important part to play in that, and we're excited about the potential,
Carrie Nixon (21:23):
A huge part to play. And there's also a little bit of a mind shift involved, I think in particular sometimes on the behalf of providers who in a fee for service world, we haven't had to look specifically over for the longer term cost of care in a value-based world. That's what it's all about. Right. All right. Emily, for you?
Emily Reiser (21:45):
For me, I think it's really about access to care and it's a big umbrella, but certainly been a big area of focus over the last year especially. So thinking about things like telemedicine seemingly opens up access to care, but what about for communities that don't have internet access or digital literacy or what about mental health? How can we expand access to mental health and other primary care practices where we're going to see not enough clinicians to meet the demand? So how are we and how are health systems thinking about access to care ranging from everywhere, from getting patients access to internet through the new digital front door and kind of patient as a consumer type of technologies that are really starting to become mainstream. So I think access to care holistically and the way that we all think about accessing our own healthcare is going to change dramatically over the next three years.
Carrie Nixon (22:40):
Couldn't agree more. All right, Tom, before we go, tell us what's next for Texas Medical Center Innovations?
Tom Luby (22:46):
Yeah. Well, we have big projects on going here at TMC, generally Texas Medical Center, not just innovation. We're focused on being building a new translational research campus. It'll be a 37 acre campus where industry and our member institutions will have the ability to closely collaborate and bring forward new and great commercialized technologies that campus is under. Construction will begin to open up phase one in two years. And so there's a real opportunity for us to expand our footprint from an innovation perspective and work with a larger community of corporates, academic medicine and provide that whole community to our startups.
Carrie Nixon (23:30):
Terrific. Excellent. Well, we will be watching and look forward to having you back on this show at some point to give us an update when the time is right.
Tom Luby (23:40):
Killer, Carrie, thank you so much. Great to be able to talk with you today,
Carrie Nixon (23:43):
Tom, Emily. Thanks for joining us. Bye-Bye.
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