Thomas Graham, MD, Chief Health Strategy & CIO, Tavistock Group

Dr. Thomas Graham is the author of Innovation the Cleveland Clinic Way: Transforming Healthcare by Putting Ideas to Work. In the book Dr. Graham shares endless details on how Cleveland Clinic pioneered innovative thinking. We expand on them in this interview.

Catalyze: We will start, Dr. Graham, with a question from your previous role at the Cleveland Clinic where you were in charge of innovation. Why did the clinic focus on Innovation and what drove the organization to make that a major priority?

Dr. Graham: When I was asked in my previous role as CIO at the Cleveland Clinic as to when innovation was founded at that institution, I always told them — 1921, which was coincident with our founding.

What we developed was a reflection of the fact that it was the highest acuity hospital in the world with the sickest patients being taken care of there. What I saw were considerable contributions, whether it was the first blood transfusion, first kidney transplant, practically everything you can think about in pulmonary angiography and open heart surgery, the founding of serotonin, so there’s a long history of techniques and technology. Yet, it was in the mid-90s when I recognized that the intellectual property being developed didn’t have a linear path to the marketplace. It was either getting shoved in a drawer, because the resources weren’t available to develop it. It was going over the transom to industry without any reward coming to the inventor or the institution, and not having impact on job growth locally in a city that was once an industrial giant, but was becoming a knowledge-based economy.

We talked about how to start a commercialization, entrepreneurial engine within a not-for-profit. That’s usually when I use the term innovation, at least in the beginning of conversations, I preface it by saying mission-driven; everything we did was to improve and extend human life and bring prosperity to communities. So, it was in the mid-90s that we started to put together the internal resources to gestate intellectual property that started at the bedside and we wanted it to return to bedside.

Catalyze: You were at Cleveland Clinic for how long?

Dr. Graham: I started my career there in the early 90s. I left in 2000 to be the Chief of the congressionally-designated National Hand Center in Baltimore and returned in 2010 as the Chief Innovation Officer, although the basic substrates at Cleveland Clinic Innovations were started back in the 1990s, when I was there.

Catalyze: So how has that experience informed what you are doing today, in terms of innovation?

Dr. Graham: Yes, I’ve moved on to be the Chief Health Strategy & Innovation Officer of the Tavistock Group, a worldwide, private investment real estate development firm, but also run the Lake Nona Institute as the Global Chairman, which is sort of our thought leadership forum.

Innovation, I believe now, has a much clearer definition than when I started this odyssey in two-plus decades ago. It’s not an ethereal wind that blows through your corridors; it’s a practice, it’s a discipline, it’s a metrics-driven engagement where its outcomes can be measured. I think that’s one of the greatest breakthroughs — we started recognizing back in the 1990s that if you surrounded it with the right apparatus, you could engage the virtuous cycle, the unmet need recognized at the bedside by a world expert, or a laboratory bench side, by the way. And then gestate it all under the control of an entity—we called it Cleveland Clinic Innovations. Now, I think a lot more people have gotten the memo that innovation is a key cultural characteristic of enterprises. We don’t improve year on year, or lift our entire sector without creative thinking. But you must reduce it to practice. Transcendent thought has to somehow find a way to go to work. So, you have a living laboratory of 700 acres here, which allows us to deploy a lot of those great ideas.

Catalyze: Particularly looking at the return on investment for innovation, how do you measure that today?

Dr. Graham: That’s a really good question. When you do reduce something to process, it’s important to have the mechanisms by which you can evaluate two key things: one, is the quality of the ideas, and the other is to assess market need. We developed multivariable scoring instruments that were being employed by key opinion leaders. That’s really important; your inventors deserve more and the process is one of allocation of scarce resources that you just can’t lick your finger, hold it up and say, “Gee, the wind is blowing this way today, maybe we’ll invest time and effort.”

It starts with recognizing that everybody’s ideas are valuable and having an intake process that allows protection of intellectual property. And then there’s triage — is this something that going to need a patent or a trademark? Is it something that could be monetized, like an advisory function? Is it just something that’s going to be incremental improvement in an existing process? Is it something that is important for our nurses? Those all get triaged in different ways. And then they finally find their way through a period where the validation of whether they are investable, whether someone will purchase them so someone will use them once they are in the marketplace. So that’s a whole ecosystem that needs to be understood and linked. That’s what we did early and developed a level of capability and mastery. I think those are the things that differentiated us.

There are some components of the ecosystem that are critical to assemble. You asked about process and metrics — at every stage you have to make tough decisions. Sometimes you have to tell your most prominent surgeons that their baby is ugly, that their idea is not that good. If you tell them early without the pain of delay or elevated expectations, then they’ll go back to the drawing board and keep innovating. You have to make the decisions about an inherently non-linear, fraught with failure, long-to-success process. I hate to break the news to everybody, but that’s innovation.

Catalyze: You did allude to building an ecosystem. Would you like to expand on that?

Dr. Graham: The short version is…there’s never enough of the stuff you need — time and money! What is interesting is that good ideas are not in shortage. I’m always impressed how engaged and creative the minds are around what we do in healthcare, our industry partners. The new generations that are being exposed to new technologies… when I think about it, I’ve always sought to put the crucible of creative thought adjacent to a for-profit development engine. Those entities work differently. And then, you have to deploy a pre-economic capital to that at really critical parts, before venture investment, way before private equity. That was one of the most difficult things, was to link those three legs of a stool. You are talking about the need for proof of concept funding at 25K-50K, and something to accelerate a promising technology at a 125K-250K level. Just as an entity looks like it might spin out as a company, the real sweet spot is that one to three million dollar level. Too early too risky. I get that. I understand the economics of it, but we have to have that pipeline continuing.

The fourth leg of the table is to have a place to plant it. That’s where my enthusiasm to be down here now at Lake Nona Medical City’s 700-acre living laboratory where we have a Veteran’s Hospital, a Children’s Hospital, the Guidewell Innovation Center, the UCSF Medical School, the UF Research Institute, because I do think there is a concept of propinquity. If you can geographically associate those with cultural alignment, that becomes more powerful. Some people would say that’s just a cluster, didn’t you read everything coming out of Harvard, etc? If anything I’m more of a constellation thinker. I think you can now virtually link best processes and best practices and I also don’t want to just abdicate all great thinking to the coasts. When I was in the upper Midwest, I think we started to see emerge a middle coast of innovation. I think Florida has immense promise. Now that we’ve been sharing our experience and engaging everybody from the private sector to the politicians, as well as the academy, as I described, I think we have a chance to grow innovation where any idea is. After all, it’s a meritocracy.

Catalyze: You talked about key components of protection of intellectual property. Is that almost a recruiting tool, because I’ve talked to physicians who have chosen academic positions at centers where they have more protection over their intellectual property?

Dr. Graham: First of all, the intellectual property law is its own practice. Always having access to experts like that to see if your idea is indeed a prior art. Was it invented in Germany 18 years ago? Or, is it something that can be protected?

What I think you are touching on is really valuable. Having a well developed and operating innovation function becomes a recruitment, retention and reward tool for the organization that has invested in it. All of the sudden, that moves the needle in preference for your clients (we call them patients). Who doesn’t want to be engaged with a corporation or institution that is cutting edge?

Second, when you are competing for talent…and, let me put myself back in Cleveland. I’ve recently had this weather upgrade, but in the middle of February, if someone is trying to decide whether to go to University of California, Santa Barbara, or Cleveland Clinic, that might be an issue in February. But wait a minute…I’m pretty innovative and if you have this robust function, and it all starts with intake and the ability to recognize what is a creative thought. So that’s open…everybody from the loading dock to the doc, and then there’s the ability to protect the intellectual property. That then starts the cascade that is necessary to evaluate whether things have technical, scientific, market relevance or merit. So, it’s a key component of the innovation ecosystem. There are many, from prototyping, engineering, transactional, regulatory, but if you must start with “the longest journey begins with a single step,” then it’s usually having the mechanism to intake and protect intellectual property.

Catalyze: You talk about the broadness of where ideas come from, so with that broad spectrum are there specific areas of focus around innovation in healthcare over the next few years?

Dr. Graham: Let me try to answer that question from both a global perspective and how innovation must think about creative thought. When we curated innovation in healthcare we usually have it come in one of four domains: medical device (total hip, stent, etc.), healthcare information technologies (which is the rocket ride), pharma (molecules or some form of diagnostic or therapeutic), and then delivery solutions (health system processes). You can express innovation in that way. You can be an executive or a ward manager and have innovative thought.

Let’s pluck one of those out quickly — the HIT, because really right now, information technology touches practically everything. It’s hard to make a medical device that doesn’t have some kind of smart capability. I guess if I were going to project where the growth will be it is hard for a bunch of really brilliant chemists to develop a bunch of compounds that go through an arduous, decade-long process to which checks with a lot of numbers on them are assigned, and many of them fail and finally you get a drug; whereas, a couple of high school students in their garage might come up with the next Uber. We have to understand the power of big data. It helps us not only dive deeply into the individual as we are looking to practice precision medicine. It let’s us go up to the highest level and practice population health — the enabler that is going to allow us to move from volume to value in healthcare.

The other part of your question, Travis, is where innovation comes from. I’m not talking geographically. I’m not talking a strata of your organization; I think everyone in your organization should have access to your apparatus. Don’t ever restrict it. But, you have to appreciate that innovation comes in different packages. I think when you are starting out in an innovation function and tapped as a chief innovation officer, you’re usually dealing in opportunistic innovation. You are rebounding the lightning strike. There then comes a part where you have your platform working and you are mining innovation that is a little bit more incremental, more organic, if you will.

Then you really start to accelerate when you get synergistic innovation, from partners across the street or across the country, or from an adjacent sector that wants to see those breakthroughs. Then you start to rub those sticks to together. I have a saying that innovation happens best at the intersection of knowledge domain. I feel very strongly about that.

Sometimes you can even have geographic innovation. You have a situation where a breakthrough in making brakes for cars can actually translate to something in healthcare. I remember when we forged our relationship through the Global Healthcare Innovation Alliance with Parker Hannifin. (Parker Hannifin a 14 billion dollar motion control giant. If you ride in a car today, they have several hundreds parts in your car. If you flew on a plane, they’d have even more.) So we asked (at Cleveland Clinic at the time), how can we find a platform for collaboration. They thought we wouldn’t be interested in what they did. They flow fluid through tubes with valves in them. So what do you think our cardiologist and urologists think about all day — fluid, tubes and valves? All of the sudden, you have a significant medical device portfolio and collaboration with a group of engineers that you may have never thought possible.

I’ll just put the cherry on top of the different kinds of innovation and say this….the Holy Grail for us in this business is strategic innovation. Knowing the market need, being able to find the best minds for it—the solvers, give them the tools they need and it cuts down on the time. It cuts down on the waste. Although you absolutely must be positioned to be ready for somebody to walk into your office and say, “I had my Eureka moment.” That happens and it is the greatest thing in the world. But I think in this day and age, where we need solutions faster, more efficiently, more effectively, and more economically, there is a real focus and a precedent for us to really develop the concepts of strategic innovation.

Catalyze: When I think about health IT and the sort of 800-pound elephant, is always the EHR and where it remains in the center of clinical data and workflow. I’m curious where you see the EHR in terms of innovation?

Dr. Graham: We were early in the pool of adopting electronic medical records at the Cleveland Clinic in, I think, 2002. Then a lot of innovation came out around “how do you patch this?” How do you make it talk to itself better? How do you extract data better? I think that honestly gave us a bit of a head start.

The best thing we can think about with regard to electronic medical records is how can we transition it from a passive archive to an active partner in healthcare delivery? That’s a lot of work that we were doing with IBM Watson — machine learning capabilities, cognitive computing. I know a lot of smart people in medicine but no one can read two to eight million pages per second. First of all, taking Watson to medical school is one of the things that I was very proud of at the Cleveland Clinic. I continue my relationships with that team today. I think that it has an amazing ability to assist the physician or caregiver and the patient — the new paradigm could be enabled by that. That’s intelligence; There’s always room for wisdom. I think if we can find a way to curate, search, extract, extrapolate and in all other ways link this mountain of data that we are generating minute by minute on each other — whether in the hospital and it is going into your medical record or on your smart device as one of the quantified-self army that we are now, it makes healthcare more democratized.

Here at Lake Nona Medical City, we are engaged with Johnson & Johnson on the Life Project. We have 20,000, and growing, citizen scientists who want to help us develop that data and those concepts. It’s the fastest connecting community in the world, thanks to Cisco, we have that backbone capability. Those are things that we are looking to do — the intelligent home. There’s so much we can learn, then be able to intake and sort through the data. I was worried as a physician back in the 80s/90s/2000s that I’d miss something sorting through a thick chart. And that was even when there was more limited data. Now, medical information has a doubling time in less than a year. Back when I started, I used to think I could almost capture what was being written out there, knowing that I was in a very specific specialty — hand surgery. No way now, absolutely no way, especially like things in oncology.

I just think that the best friend and worst enemy is the electronic health record right now. So, we have to wrestle it. We have to find a way to make friends with it and to move forward as partners with that data, whether that’s developing new therapies, or helping an individual survive longer. It is probably the greatest enabler, but somehow we have to take it from a high priced paperweight on our desk to an entity that is moving shoulder to shoulder with us for healthcare transformation.

Catalyze: Thinking about innovation, both from an internal perspective and then from a partner perspective…

Dr. Graham: One of the most innovative companies is Guidewell. They aren’t a health insurance company; they are a health and wellness solutions company for its millions of members. Who handles data better than somebody who has been doing this? I’m sorry, I was just thinking about…that’s new; those are new climates. We no longer have vendor/client, we have vendor/partner. We no longer have competitor; we have collaborator.

Catalyze: So you guys approach innovation by capitalizing on your own internal IT, but also leveraging partners or collaborators, where it makes sense?

Dr. Graham: I always say: Why are the greatest advances in our society (philosophy, music, art, science) happen at the port cities? Because that’s where ideas had intercourse. That’s where people from different cultures and perspectives and research all came together. I think you could be the smartest individual or the smartest company in the world, but if you have the myopia with the blinders to think that you have a monopoly on the ideas, you are going to lose.

There are locks on everybody’s campus and I guarantee the keys reside elsewhere. The best thing about innovation is its non-competitive platform. I get it: University Hospital and Good Samaritan in Springfield, wherever, are competing for a patient. You are going to get your baby delivered in one place and your total knee replacement inserted in the other. Whereas, if Dr. Brown has a great idea at University, but the apparatus for innovation doesn’t exist there, and Good Samaritan has a robust one, who is going to lose? The patients that would have been served by a better idea, the inventor would never be rewarded, the institution isn’t going to benefit, and no jobs are created. That is going to be one of the mantra you will always hear from me.

The only net new job creator in our country in the last two decades are companies less than five years old. And about half of those came from healthcare, or related IT. So, this is the most patriotic thing we can do.

People ask why did I write the book and imbue it with a lot of the secret sauce — the specific scoring instruments, the process? Why would I think I’m a board, let’s pull up the ladder? That’s the worst thing a true innovator could ever say. I’ve learned so much from my colleagues that I want to share that. It’s all about best process and best practice. We don’t lose an idea because someone else had it in California. Every once in awhile, there is simultaneous discovery, but we have a big job. We have an expanding population. We have physician shortage. We have spiraling costs. I’m all about the value proposition of innovation.

I’m here to tell you that it does not make healthcare more expensive. You can track the expenses of penicillin’s development, but you can never track the impact.

I’m always on my bully pulpit to try and disabuse people from the idea that innovation makes healthcare more expensive. We are very focused are solving big problems for large populations. I stand shoulder to shoulder with some amazingly bright colleagues, Daniel Pratt, Jeff Arnold, there are so many. New colleagues like Dan Buettner at BlueZones, where he is showing there are some areas in the world where people live longer and have a happier life because of things. We are now talking to different people and different partners than we ever were. If we don’t, we are going to be in a lot of trouble. It’s a big team as far as I’m concerned and that’s why I’ve been very open about sharing it.

I thank the Cleveland Clinic for allowing me to develop a lot of these things here. Now, I’m here at Tavistock that has 200 companies in 13 countries. We have a global vision to improve and extend human life and to create economic prosperity for individuals and communities. Our ground zero is here at Lake Nona Medical Center in Orlando, but we believe that this concept plays everywhere. We are here to help anybody who wants to pursue it.

Catalyze: This has been insightful and I appreciate your time. Is there anything that we didn’t cover that you think is worth commenting on?

Dr. Graham: We just conducted our fourth annual Lake Nona Impact Forum. We have an invitation only thought leadership forum for 250 key opinion leaders. I was just blown away by the level of engagement and connectivity. I thank the colleagues who came, from Sanja Gupta, Deepak Chopra to Patrick Kennedy and Billie Jean King. The folks that are real leaders understand that we have massive challenges. It’s not going to be until we recognize and admit them, understand our own limitations, and then really embrace the power of partnership.

I spent my life doing hand surgery but also cultivating the concepts of contemporary innovation and I used to say that you have to be ready for failure. But innovation is just fraught with failure. You have to appreciate the pursuit, embrace it and have a bit of a thick skin. But, it was was Billie Jean King who said she doesn’t even call it failure, she calls it feedback. WOW! That was transformative for me. I think we need to look at it that way and we need to also quit accepting that you just need a bunch of “at bats” and it’s okay to have a low batting average and low slugging percentage. Because, the things that we have talked about on this interview, like technologies and new levels of collaboration, both within and between sectors, I think we are going to be doing better. So, I believe that the future of healthcare innovation is super bright and I hope that we contributed modestly to it with a lot of the things we pioneered. I hope when people read the book, they are both inspired and informed. And, they do scratch their head a bit and say, “Why did this guy just tell me everything he has learned?” You can always tell the scouts because they always have the arrows in them. It’s been an awesome journey.

One last thing. It’s in the book, but I was very ill a few years ago, so sick to be thought as not to be able to survive. I was in the hospital for six months, had 20 operations, and out of work for a year and a half. And I thank the Cleveland Clinic every day for saving my life; it’s unbelievable. But I’m the greatest beneficiary of innovation. So I’m not a dilettante at this. I’m not just passing through and thinking isn’t it great to have light bulbs go off your head. I know, full well that we are all going to be patients. I hate to say that, but there’s a little bit of stark reality that will have to take a double take when they hear it. So, we have to find ways of solving today’s and tomorrow’s problems. I only know one way and that’s to keep the good ideas flowing, nurture them and assign them the value they inherently have.