When Doctors Enter the Startup Arena: How Global Top-Tier Medical Institutions Balance 'Commitment' and 'Exit'

In the process of innovation and translation, medical institutions should focus on “what to do” and “what not to do.”

Why is this the case? There are, in fact, well-founded reasons. In recent years, enthusiasm for medical innovation and translation has reached unprecedented levels in China. As the primary source of innovation, healthcare institutions are inevitably required to assume greater responsibilities.

However, the current issue remains evident, with the core challenge lying in how healthcare institutions can achieve "targeted precision" during the process of innovation and translation, namely“Act” in areas that can truly drive innovation, and “refrain from acting” in areas beyond one’s capabilities that may hinder innovation.

Specifically, in the process of innovation and translation,Medical institutions are primarily focused on the initial stage of “from 0 to 1.”, for example, by implementing policies or management measures to establish a mature and efficient innovation translation system within the hospital, building state-of-the-art experimental platforms, or providing access to market resources such as talent and funding.

As physician entrepreneurs progress to the stage of deep market engagement, healthcare institutions should adopt a “hands-off” approach—for instance, by streamlining approval processes and refraining from excessive involvement in core market-driven aspects such as capital infusion. Additionally, state-owned equity should consider an “exit” strategy; when scientist-led projects reach a certain scale, the withdrawal of state-owned shares may enable the projects to realize greater value in the marketplace.

However, the reality is that the vast majority of medical institutions in China currently exhibit somewhat “extreme” approaches to medical innovation: either a “complete void,” characterized by the absence of corresponding policies and measures and a lack of a robust system for medical innovation and translation; or “overreach,” where they attempt to manage every aspect but, due to insufficient market understanding or inadequate core capabilities, inadvertently cause harm with good intentions. This ultimately results in the failure or delay of translating scientific research projects into practical applications.

Stones from other hills may serve to polish the jade. Global medical institutions began exploring medical innovation and translation earlier than we did, and have now reached new heights. Some leading institutions have even achieved an optimal balance between “investment” and “exit” in medical innovation and translation. Based on this,VCBeat Orange BureauReviewedThe Underlying Logic of Innovation Translation at the Top 10 Medical Institutions Globally, for the readers' benefit.

Medical innovation translation requires technology, talent, and capital, and research-oriented hospitals precisely meet all three of these essential conditions.

Through long-term research conducted by VBInsight, it has been found that among the top ten medical institutions globally,Research-oriented Hospitals Account for Half the MarketCompared with traditional hospitals, research-oriented hospitals appear to be an “upgraded version” of traditional ones, possessing stronger core capabilities in both clinical practice and scientific research.

From a clinical perspective, research-oriented hospitals have leapfrogged from the stage of “difficulty in accessing medical care” to that of “tackling complex and challenging diseases,” serving as diagnostic and treatment platforms for acute, critical, and refractory conditions. Hailed as the “Mecca of Medicine,”Mayo ClinicBoasting an impressive array of medical milestones—it was among the first hospitals to adopt the MDT (Multi-Disciplinary Team) model, performed the world’s first open-heart surgery, the first total hip replacement in the United States, and the world’s first face transplant...

From the perspective of scientific research achievements and their translation,Johns Hopkins HospitalIn 2021, a total of 444 invention disclosures were processed, 166 new patents were granted, and the number of start-ups reached 174;Cleveland ClinicIn 2021, 92 innovative projects were successfully commercialized, attracting over $1.3 billion in investment...

So, what is a research-oriented hospital?

Simply put, research-oriented hospitals do not prioritize scientific research over clinical practice, nor do they abandon clinical care to focus exclusively on research; rather,Clinical practice and scientific research are mutually reinforcing; research enhances clinical proficiency, which in turn drives the further advancement of research and teaching.

So, how do research-oriented hospitals focus on innovation and translation to improve their scientific research level?

First, establish a comprehensive mechanism for innovation and translation., this not only serves as a constraint on all parties within the innovation ecosystem but also as a form of protection, enabling the promotion of innovation and translation within medical institutions in a more planned and rational manner.

Then come the four foundations: talent, disciplines, facilities, and funding.

First, to build a team of academic and commercial talent.For physicians, how to conduct scientific research and achieve commercialization remains a major challenge.Johns Hopkins HospitalLeveraging university resources, a “Lab-to-Market” training camp was established to organize researchers and inventors in learning how to maximize the impact of their own research. The curriculum includes guest lectures by industry professionals, evaluations of key case studies, and weekly demonstrations of the inventors’ technologies.

At the same time, a Mentors-in-Residence program was established. This initiative directly brings in seasoned entrepreneurs and pairs them with members of the FastForward Innovation Incubation Center to provide technical expertise and business guidance.

Second, establish clusters of leading disciplines.A comprehensive range of disciplines and key disciplinary clusters enable healthcare institutions to achieve broad-based development while maintaining strategic focus. For example,Sheba Medical CenterWith 150 departments and outpatient clinics covering nearly all medical specialties, Sheba Medical Center enjoys a strong international reputation in fields such as obstetrics, gynecology, pediatrics, and rehabilitation. This has led the center to increase its focus on innovation and translational research in these “areas of excellence.”

Third, provide top-tier hardware equipment.Access to state-of-the-art laboratories and advanced instrumentation often facilitates smoother progress in scientific research projects. For instance,Lausanne University HospitalFor example, to provide physicians with an optimal research environment, the hospital has not only established research infrastructure but also granted researchers access to various specialized laboratory resources that are otherwise unfundable, such as mouse pathology facilities, experimental microsurgery facilities, and in vivo imaging equipment.

Fourth is the investment of real money.R&D inevitably requires funding, and the earlier a research project is in its lifecycle, the more acute its financial needs become. This is because external investors are often reluctant to engage at such early stages, deeming the projects too premature, while research teams themselves cannot sustainably cover R&D costs. Therefore, medical institutions should step in as the “funders” of research projects during this period by providing dedicated R&D grants.

Toronto General HospitalIt is Canada’s largest and best-funded research institution. According to publicly available data, Toronto General Hospital’s research expenditures reached $480,000 in 2020, representing an increase of nearly 20% compared to the previous year.

Finally, the translational model: from clinic to market.

At this stage, healthcare institutions primarily serve as conduits for linking to market resources. There are two core approaches: one involves selecting specific resources from the extensive market resource pool through assessment and performing targeted matching based on the needs of research teams; the other entails deep engagement by establishing specialized teams through external recruitment to comprehensively support the translational needs of research teams.

In fact, at the stage of medical innovation and translation, medical institutions primarily act to “protect” researchers. On one hand, they safeguard researchers’ commercialization rights and interests through rules and regulations; on the other hand, they provide essential market-oriented resources during the earliest stages of research projects. As these projects mature to a certain stage, medical institutions gradually withdraw their involvement and shift their focus toward new, earlier-stage research initiatives.

In the process of medical innovation and translation, physicians should assume a leading role; if healthcare institutions become the “protagonists,” they may, to some extent, act as an “impediment” to physicians’ progress in innovation and translation.

This is actually quite reasonable. Because innovation and translation are essentially a relativeFlexible and DiversifiedThroughout the process, each innovation project is independent, and the elements involved in each project are diverse. Consequently, the pain points encountered and the resources required during the innovation and translation phases differ from one project to another. This distinction is particularly pronounced in the healthcare sector.

Therefore, as the first “guide” for researchers on the path of medical innovation and translation, if medical institutions only participate in services and management at a narrow level in a mandatory manner, they may end up “doing harm with good intentions.”

Therefore, more importantly, healthcare institutions must learn how to “unbundle” or “exit” at an appropriate juncture and in a suitable manner.

So, when benchmarking against the world’s top medical institutions, how do they reach a “consensus” with researchers on medical innovation and translation?

On one hand, there is the issue of how benefits are to be distributed.

In the process of medical innovation and translation, when it comes to benefit distribution, doctors and medical institutions each have their own rationale. From the doctors’ perspective, having devoted considerable effort to achieving a research outcome, they question why medical institutions should claim such a large share of the rewards. From the standpoint of medical institutions, having provided substantial resources and invested significant effort in the earliest stages, they wonder why they receive only a small portion of the benefits in the end.

Neither side is actually at fault; what is lacking is a benefit-distribution mechanism that can leave both parties “fully convinced and satisfied.”

Lausanne University HospitalAfter completing the innovation and commercialization of intellectual property and entrepreneurship, the “cake is divided,” ensuring that every participant in the innovation and translation process benefits. The Technology Transfer Office stipulates that the net income from licensing agreements, after deducting all patent application fees and a 10% fixed rate to cover the operational costs of the Technology Transfer Office, shall be equally divided into three shares, allocated respectively to the scientists, their affiliated departments, and the institution.

On the other hand, there is the issue of how and when to exit.

Prior to the public disclosure of research findings,Lausanne University HospitalPhysicians are required to disclose their inventions to the Technology Transfer Office for inclusion in the achievements repository, thereby safeguarding the legitimate rights and interests of intellectual property.When physicians identify commercial partners and engage in deep collaboration with companies, their intellectual property needs to be commercialized., the Lausanne University Hospital provided physicians with two options:

The first is how to collaborate with the company on intellectual property issues and sponsored research; the second is how to maximize research benefits by integrating publications with intellectual property.

andWhen Physicians Launch Their Own Ventures, physicians can obtain institutional intellectual property licenses. If a startup is established based on a university or university hospital (a “spin-off”), the hospital will also assist in drafting and managing appropriate licensing agreements, thereby supporting physicians in innovation and startup creation.

Many physician entrepreneurs still lament that their technical expertise, while within the public healthcare system, missed out on too many opportunities. How, then, can hospitals in China achieve a win-win outcome with these entrepreneurial physicians?

First, it is essential to create a conducive research environment for physicians. This involves allowing some clinicians to step away from routine clinical duties to focus exclusively on medical research and development. For instance, West China Hospital of Sichuan University, Peking University Third Hospital, and Beijing Jishuitan Hospital have all empowered their staff to varying degrees in the development and translation of scientific research achievements.

Secondly, meticulous care must be given to scientific research achievements. During the process of translating these achievements into practical applications, physicians often exhibit a significant gap in business knowledge. At this stage, hospitals need to assist physicians in evaluating and connecting with market resources. First, regarding evaluation: hospitals should conduct precise assessments of physicians’ projects and propose reasonable plans based on the assessment results. Second, regarding connection: this primarily refers to linking with investment institutions. Hospitals can expand their own “market resource pool” through two approaches: “in-house development” or “recruitment.”

Ultimately, physicians should take center stage as entrepreneurs, a shift that hinges primarily on the balance between tightening and loosening control over intellectual property (IP). This involves implementing effective IP protection in the early stages, while learning to grant physicians greater autonomy once they develop entrepreneurial ideas, ensuring reasonable delineation of IP ownership and benefit distribution.

For physicians, in addition to actively cooperating with hospital-related work, they can also seek assistance from professionals to facilitate effective communication with the hospital.