What is The Innovation Institute?
The Innovation Institute is an organization focused on transforming healthcare through the development of innovative new products, services, and ideas. The Institute is an incubator that helps nurture ideas and brings them to market to improve care delivery, eliminate waste, and extend human life. Think of the Institute as a type of “Shark Tank,” only a lot friendlier. Here, we evaluate inventors’ ideas and determine the long-term potential for each concept. We walk with the inventor to obtain patents, develop prototypes, and navigate the best way to take their idea to market as a new product, license agreement, or even a new company.
Why We Exist
The Innovation Institute exists:
- To transform care delivery.
- To help physicians, employees, and clinicians commercialize their ideas.
- To find new revenues sources and advance innovation.
- To collaborate and partner with Health Systems and Industry.
- To advance and find innovative solutions and products that help the underserved.
Unique Business Model
The Innovation Institute is authorized to have seven non-profit health systems as equity investors or “Member Owners”. Each investor holds a seat on the Members Committee. The day-to-day operations are managed by a Board of Managers. Launched in January 2013 as a for-profit LLC, the Innovation Institute has three major elements:
The Lab is the heart of The Innovation Institute. It is the incubator /accelerator that works with clinicians to incubate their ideas and help take them to market. The Lab is also a physical space where we will bring leaders together to advance innovation. Located in Newport Beach, California, the Lab has onsite tech-transfer experts who work with inventors. Through a strategic alliance with Cleveland Clinic, the Lab is able to provide great depth and subject matter expertise when needed. The Lab also has social ideation software (Brightidea) through which it conducts targeted innovation challenges.
The Enterprise Development Group is the “economic engine” that drives the cash flow to support innovation. The Innovation Institute owns a portfolio of profitable companies that provide services to hospitals across the country. The profits from these companies are invested in innovation and support the Lab. Each of the companies are for-profit LLC’s that have their own leadership teams. There is no requirement that the “Member Owner” health systems use the portfolio companies, though it is often advantageous for them to do so.
The Fund will be established to invest in companies that have innovative products. Once The Institute seeds the Fund, most of its future capital will come from private investors. While the Lab is primarily focused internally on Member Systems to advance innovation, the Fund will be focused externally on what other organizations are doing. The Fund will bring market intelligence and provide significant synergies with the Lab.
Learn More About Our Unique Business Model
Who Owns The Innovation Institute?
The Innovation Institute is a for-profit, limited liability company owned by non-profit health systems (our equity owners or “Member Owners”). The Innovation Institute is authorized to have seven “Member Owners” as investors. The minimum investment required to be Member Owner is $10 million. This can be a cash investment, or a combination of cash and asset contribution. The Innovation Institute has a unique business model that has allowed it to be profitable from Day One by holding a portfolio of service companies that sell services to hospitals and health systems internationally. The profits from these service companies are reinvested in innovation. There is no requirement that Member Owners use these companies.
The Institute is a “perpetual company,” established to focus on innovation into perpetuity for the benefit of those systems that invest. In other words, there is no planned liquidity event to ever go public with an IPO, sell the company, or merge it.