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#SROA2020 Highlights: Driving a Culture of Innovation

By Tammy McCausland

On Friday, October 30, Mark Coticchia, vice president for Innovation at Baptist Health South Florida, presented on driving a culture of innovation. He described innovation as the intentional process of developing a new product or service to address a need held by many. It’s a structured form of problem solving that is need-based and multidisciplinary.

The healthcare industry needs innovation due to the aging population, chronic disease conditions, the global pandemic, clinician burnout and economic reform. Hospitals have many reasons to innovate: to attract and retain talented physicians and employees; to earn recognition for discoveries, inventions and innovations; to increase revenue and attract corporate support and donor gifts; to contribute to economic development; and to comply with federal regulations.

When innovating, execution matters. Coticchia said it’s important to start with talent. An organization needs professional expertise (IP protection, legal, regulatory, marketing, IT). Most innovation functions must run lean.

He identified three keys to success:

  1. Ensure the risk/reward relationship warrants the investment of time and resources.
  2. Have processes to assess winners and losers.
  3. Have policies for external agreements (legal). One-size-fits-all contracts don’t work.

Cultivating Innovation: Coticchia outlined important criteria to create a successful innovation function in a healthcare setting: business-experienced staff and marketing staff (lots of science and medical experts already); a centralized function; authorization to move deals quickly;  a business-like approach with continual refinement of processes; an operating philosophy focused on commercialization, targeted approach, customer service and cost recovery; and an “Innovation Network” of contributors to leverage expanded ties to the region.. Innovation leaders should have decision-making authority because committees move slowly. Coticchia strongly recommended getting to know the resources in your regional community.

Cultivating innovation can be challenging in an not-for-profit healthcare setting where clinicians are focused on patient care and research. There’s not a lot of time left for innovation activities. An institution must reward innovators, economically and in performance reviews and recognition. Coticchia established Baptist Health’s first intellectual property in which innovation creators receive half of any net income that the hospital may ultimately receive from its commercialization efforts.

Value of Commercialization: The value of commercialization in terms of fiscal return is another common challenge. There’s an inherent lag and it may take 5-10 years for a new innovation function to break even. Innovation leaders talk about the “valley of death,” which is the gap between the funding needed to “de risk” an emerging product and the funding available from common investment sources. It’s difficult to get capital in the earliest stages of product development, he said. Bootstrapping becomes the most relied upon form of resources to continue early product development.

The cost of protecting intellectual property is another economic challenge. It costs a lot to apply, prosecute and maintain a patent portfolio. You can spend more than $20,000 on a patent application before you even know how it’s going to be received by a patent examiner.

Engaging Partners and Investors: Determining how to best engage potential partner companies is also a challenge. Large partners can be great partners, but they are often tightly focused on near-term sales, and they don’t collaborate or invest in upstream at the various early stages of product development. Privately held firms, especially startups, have interest and product designs that align at the various early stages of product development, but they often lack the resources to execute on product development, and they don’t understand the healthcare environment.

Engaging investors and entrepreneurs can be wonderful, he said, but these dealings present their own challenges. It requires knowing a different “language.” Relationships and track records matter when dealing with investors and entrepreneurs.

Other Challenges: Managing legal affairs adds complexity, and managing conflicts of interest require management. Coticchia recommended making the innovation program part of the institution’s conflict of management program. It’s important to encourage appropriate entrepreneurship, but you don’t want your expert to leave to join the new venture. A workable approach, he suggested, is short-term engagement with the new venture. But the new venture must hire a full-time CEO within months. With innovation, the goal is to balance the upside with maintaining the current state of operations. An overall assessment of expectations, not just upside, but also costs and risks, should drive the institutional view and promotion of any of these pursuits.

Creating an Innovation Culture: To fostering an innovation culture you must have strong relationships, especially since most innovation activities fail. The ones that become successful take many years. Gaining trust in all innovation partners is key. You need collaborators who share your expectations and are not quick to point blame. You also need strong support and shared expectations with the C suite, and the board of trustees/directors. You should seek experts (champions) you can rely on for advice. Many first-time inventors seek mentors on their own. The innovation function doesn’t make the opportunities, he said, it responds to the opportunity and structures the appropriate projects and collaborations that emanate from other people’s ideas.

If a new or established innovation function has a dearth of new ideas, seek change, Coticchia said. At Baptist Health South Florida they’ve used challenge mechanisms and promotional outreach to ensure their inventors/creators that the innovation function is there to work with them. The innovation function’s mission is to provide a high level of service, transparency and positive outcomes. It’s imperative that you convey your successes and that your constituency is patient, he explained.

Developing Ideas: Coticchia concluded by saying because innovation is multidisciplinary, there’s always an opportunity to participate in improving the way we provide care. You don’t have to create the idea—you can contribute to how an idea is developed or modified so that it can benefit many patients. When thinking about areas in which to innovate, simply look at your own professional day. What are the pain points. You can also ask, “If there was one thing we could magically make go away or improve in your job, what would it be?” Sometimes the answer to this question becomes a launching point for what becomes a comprehensive innovation project. Also, think about where you receive the most complaints from patients. These can also be jumping off points for innovation, he said.


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