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Cleveland Clinic, MedStar join forces to move medical technologies to market

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The Cleveland Clinic, one of the country’s most prominent medical research centers, and MedStar Health, the largest health-care provider in Maryland and the Washington region, will collaborate to bring medical inventions to market, according to a plan to be announced Tuesday.

The alliance, which will affect technologies developed by thousands of scientists and doctors, will be the first of its kind between two large U.S. health systems, executives said. The collaboration is a response to growing pressures on health-care institutions to cut costs while finding innovative ways to improve patient health and care delivery, they said.

At the same time, analysts said the move strengthens each organization’s market position against a world-class competitor, Johns Hopkins Medicine. For Columbia, Md.-based MedStar, Hopkins has expanded from Baltimore to gain a strong foothold in the District; for Cleveland Clinic, Hopkins is a competitor nationally and internationally.

Among the hospitals MedStar operates are Washington Hospital Center, Georgetown University Hospital and the National Rehabiliation Hospital in Washington, D.C.; MedStar also operates six hospitals in Maryland.

“Reinventing the wheel everywhere isn’t as favorable an option as forging collaboration,” said Thomas J. Graham, a hand surgeon and chairman of Cleveland Clinic Innovations, which oversees the idea-to-market process.

“This allows us to open up a larger-scale collaboration that can be helpful in improving patient access, getting clinical answers and expanding innovation.”

With improvements in electronic health records, more health systems will be turning to such collaborations to tap into the expertise of other organizations, officials said.

Moving medical technologies to market is a relatively new endeavor for health systems and academic medical centers, Graham said. Created in 2000, Cleveland Clinic Innovations has licensed more than 250 technologies and started 35 new companies to market products. One of its best-known products was invented by Cleveland Clinic’s president and chief executive officer, Delos Cosgrove — a tiny U-shaped device used to restore proper functioning of a heart valve in patients with leaky valves.

The Cleveland model is a combination of royalties from licenses of technologies to established companies and the sale of shares in spin-off companies. Royalties from licensing generate about $10 million yearly, but overall revenue is increasing significantly, said Chris Coburn, executive director of Cleveland Clinic Innovations. Last week, Boston Scientific paid $78 million for a Cleveland Clinic spin-off that is developing a system that uses deep-brain stimulation to treat traumatic brain injury.

“We would apply our expertise and experience to creating spin-off companies in the D.C.-Maryland region,” Coburn said.

MedStar Health’s effort to emphasize medical innovation started more recently when it created the MedStar Institute for Innovation in 2009. Its director, Mark Smith, said the collaboration with Cleveland will give inventions from MedStar doctors and scientists a much greater chance of becoming reality.

Unlike universities or corporate research and development operations, MedStar’s doctors and staff are grounded in clinical reality, with nine hospitals, 27,000 employees and 1.6 million annual outpatient visits, Smith said.

At the same time, a number of MedStar inventions never made it to patients, he said, in large part because of a lack of strong support infrastructure.

They include a “sucking nebulizer,” a device that delivers extra oxygen or nebulized medication to an ill infant while allowing it to suck on a pacifier or bottle; a device that uses ultrasound to assess the skin of patients at risk for bedsores; and the use of substances secreted by stem cells to grow blood vessels in locations where arteries are obstructed, Smith said.

Cleveland Clinic has a more organized structure for “moving these ideas so they don’t fall off the conveyor belt, from concept to deployment,” he said. For example, Cleveland has its own engineering and prototyping laboratory, while MedStar does not.

As with all large organizations, MedStar employees often get caught up in the “tyranny of the daily, which trumps the pursuit of the remarkable,” Smith said.

One area of initial focus will be health-care information technology, a critical piece of the health-care overhaul in the coming years. MedStar’s Smith developed a system to deliver clinical information, such as laboratory results and radiology images, with two-click access to all data. The system was acquired by Microsoft in 2006 and is the flagship product of Microsoft’s Health Solutions Group, Smith said.

Initially, the collaboration will be for three years, and Cleveland Clinic will hire two to three staff members to start working immediately in Washington and Maryland with MedStar staff.

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