Healthcare innovation

AMA Opens Silicon Valley Outlet, Bets on…

AMA Opens Silicon Valley Outlet, Bets on…

The American Medical Association now has a Silicon Valley address, just down the block from Pinterest and Zynga. It also has a new digital identity.

The staid Midwestern bastion of traditional medicine hasn’t abandoned its Chicago headquarters or its conservative style. But the AMA is attempting to move aggressively into the digital age, making a $15 million bet on a for-profit company called Health2047, officials announced during the firm’s formal launch at the JP Morgan Healthcare Conference in San Francisco Monday.

Health2047 is set in San Francisco’s SoMo district, an artsy neighborhood dotted with talent-rich Internet companies. The firm reflects the AMA’s desire to take an active role in reshaping a health care system buffeted by converging market forces, such as the push to exploit new technologydrive down costs, improve quality, promote transparency and heighten accountability for the results of care.

From doctors’ offices to retail clinics to operating suites, these pressures are inescapable, says Dr. James Madara, CEO of the AMA and chairman of Health2047. The challenge: “How do we make physicians’ practices sustainable in this new environment?”

Health2047 seeks to combine AMA’s medical expertise with Silicon Valley technology and business know-how to develop solutions to the problems that “burden physicians and detract from patient care,” he says.

Supplying the business savvy is CEO Dr. Douglass Given, a physician-scientist-entrepreneur with broad expertise in health care, venture capital and drug development. His resume includes stints running Vivaldi Biosciences, Inc., a biotech firm reinventing the flu vaccine. He has also played roles in traditional pharmaceutical companies, public health and academic medicine.

Given believes that doctors’ insights should play a pivotal role in health care’s evolution. “You think about the $3 trillion-plus health marketplace, with less than a million practicing physicians – think of the leverage they have,” Given says. “We need to leverage and unlock the insights of the AMA, and do that through partnerships with leading commercial enterprises that for one reason or another haven’t been able to penetrate health care.”

Jack Stockert settles in at Health2047's new office space.  He leads Health2047's business strategy team.

Jack Stockert settles in at Health2047’s new office space. He leads Health2047’s business strategy team.Courtesy Health2047

Given describes the firm’s San Francisco headquarters as an “innovation studio,” where a team of 15 are exploring opportunities and pursuing discussions with potential partners. Ultimately, he envisions a staff of about 60. The best analogy for Health2047’s game plan, he says, may be the MIT Media lab, where academics, innovators and industry scientists have partnered to develop technology used in scores of products from e-readers to auto air bags to wireless networks.

The MIT lab functions as an extension of its academic setting. Health2047 will draw its inspiration from insights derived from analysis of critical health issues, from corporate partners and from AMA members in every realm of medicine, from family physicians to leading academics – including the AMA’s Madara, formerly dean of the University of Chicago’s Pritzker School of Medicine.

“We’ll supply content expertise – scientific, medical, health policy and pragmatic specialty knowledge that can influence large-scale health care and medical practices,” he says.

The firm will have three business tracks:

  • Enabling established corporations to better participate in the health care economy by helping them to shape their products and services.
  • Working with venture-capital backed drug firms and others to develop the tools they need to enter and compete in the health care market.
  • Developing novel products and services that fit a recognized need.

The areas that offer the greatest opportunity for innovation are medical education, chronic care; value-based health care and payments; connected health solutions; and networking technology for physicians, providers, payers and patients. Creation of a seamless network is especially appealing, Given says. “It’s a mystery to me why it doesn’t exist, why physicians aren’t using this in their practice.”
“The AMA’s diverse membership represents a resource for cultivating ideas, beta-testing products and making use of those that reach the market,” he says. “AMA has a wonderful channel to physicians. When we launch these products, we want the physician channel to accelerate the adoption of winning solutions.”

Thinking big has its appeal, but some researchers believe the greatest opportunities for innovation occur on a smaller scale. “What concerns me a great deal about innovation in health care these days is the attention paid to far-reaching and disruptive ideas at the expense of smaller bets that are far more certain to pay off,” says Chris Trimble, a researcher at Dartmouth College’s Tuck School of Business and author of “How Physicians Can Fix Health Care: One Innovation at a Time.”

“We’re spending way too much time betting on home-run hitters in the world. We need to spend more time with folks who crank out base hits at a high average. There are tons of them around, but we’re not seeing them – they’re doing a better job of coordinating care, keeping chronic disease patients healthy, standardizing medical processes and making better decisions. We can make more progress on a smaller scale, with a higher success rate, than through these futuristic solutions that we don’t even understand the potential of yet.”