Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=231554
Story Retrieval Date: 10/30/2014 11:50:35 PM CST
From electronic medical records to robotic surgery, healthcare innovation is paving the way for gradual and consistent change in the medical industry. By providing more financial and informational help to entrepreneurs, the City of Chicago is taking a series of steps to catch up with the high-tech movement in this field.
“People want to see a lot of investment in the community before they [get] involved,” Sarah Doherty, chief technology officer of TeleHealthNow LLC, a Chicago startup that is robotic surgery devices, said of Chicago. MATTER would be a “physical marker of the prominence of healthcare startups in Chicago,” she said.
According to the development plan released by the Illinois Department of Commerce and Economics Opportunity in July, the state identified the biomedical/biotechnical field as one of the seven high potential industries that are well established and backed by leading global companies in Illinois. However, the plan also shows that the industry ranks second to last among the seven in terms of the ability to attract companies and talents.
Healthcare innovation, such as electronic medical records, may significantly reduce inefficient appointments and waiting time and create higher-paying jobs. By 2025, Illinois intends to create 157,137 positions, a 26 percent boost, in the biomedical/biotechnical industry, the development plan indicates.
On July 24, MATTER held its first social event at its unconstructed space. More than 100 local people from universities, law firms, venture companies and healthcare startups gathered to discuss the development, potential challenges and possible solutions as the technology movement advances in healthcare.
Investment Before Regulatory Stage
A big issue is whether or not the startups would attract enough investment to stay viable and support their work in Chicago before reaching the regulatory stage. The startups specializing in medical devices face tougher challenges than digital software innovation since hospitals tend to consider them void of credibility.
Startups face significant challenges when trying to find clinical trial partners, said Rao Mitesh, MD, director of Section of Health Services Evaluation & Policy Research at Northwestern University Feinberg School of Medicine.
It can be challenging for hospitals to properly offer clinical trial opportunities as well, especially when the hospitals incur costs related to the trials, Mitesh added. Normally, the Food and Drug Administration requires that a new medical device need go through at least three phases of clinical trials lasting two to three years in total.
According to Lyle Berkowitz, associate chief medical officer of innovation at Northwestern Memorial Hospital, a cohort comprising of representatives from hospitals and research institutions in Chicago are working to identify issues in their working environments and looking for startups that develop software and technology that solve those problems.
MATTER stands to play a key role in matching them and to also serve as a conduit for attracting out-of-state investment. Thanks to1871, a sister digital technology hub located next to MATTER, said Dave Roeder, communications director of DCEO, the funding raised for startups in 2013 almost tripled.
Unsustainable System, Consistently Change
“Healthcare in general is not a sustainable business,” Berkowitz said. “We have to rethink how do we practice.” Last year, IMS Health Holdings Inc., a company that provides information, services and technology for the healthcare industry, released a report showing that the U.S medical industry could save at least $213 billion caused by inefficiency.
The current design of electronic medical records slows down the record documenting process because doctors sometimes take more time to type the records than write them down, Berkowitz said. The increasing demand for primary care doctors requires innovators to design the technologies as elegantly as in other industries, Berkowitz added.
Efficient technologies not only reduce doctors’ workloads but pare down the numbers on their paychecks as well. In the traditional volume-based healthcare organization, doctors are paid by how many appointments they have, which requires internal system change to balance out the profit among different sectors.
In order to encourage doctors to use new technologies, Berkowitz said, the industry need to make the shift from a volume-based payment system to a value-based payment system, which pays doctors for high-quality work.
Open Resources or Copyright
The July MATTER event showed guests the construction plan for its space, which will be completed fall 2014. The space is being designed for company representatives to gather in order to exchange ideas and information and this might result in different companies developing similar concepts, which raises issues of copyright and infringement.
In order to avert such problems, companies using MATTER’s space will have their patents or copyrights ready before they begin discussing their innovations with others, explained J. Peter Paredes, a registered patent attorney at Rosenbaum PC, a Northbrook-based law firm specializing in intellectual property.