Tremblay Consulting, independent advice since 1997

My proposal to present on the challenges of academic health science centres as entrepreneurial environments has been accepted for the 2012 Entrepreneuriship conference in Maastricht in March 2012: see here for more details.

Why should academic health science centres be understood as entrepreneurial environments?

AHSCs: a state of mind, not just a building

The Academic Health Science Centre undertakes three important missions:

• they treat patients

• they conduct research

• they teach the next generation of clinicians

The AHSC model, as a structured and integrated organisational form, is most developed in the US, Canada, Netherlands, UK, Sweden and a few others, and emergent in other countries.

They are a distinct and probably unique type of organisation, quite expensive to run (annual revenue streams on the order of €2 billion or more), very complex and home to a diversity of stakeholders. Often, AHSCs are thought of simply as teaching hospitals in a loose affiliation with universities but this underpowers their role.

The AHSC represents the most robust model of an institution that could be seen as sitting at the nexus of innovation and entrepreneurialism in health sciences. They essentially own the challenges facing us in the biomedical and treatment arenas, and have access to, or indeed may own, their own research capacity to solve those problems – they can be seen as both producer of new knowledge and consumer of it. And through their role in the intergenerational transfer of knowledge (i.e. teaching), they can influence future priorities, and clinical treatment practices within healthcare systems. As large and potentially well connected organisations, they have the potential to access considerable sums of start up capital, and spin-out a variety of new companies.

Not all teaching hospitals have the capacity to be an AHSC. Not all universities become an AHSC simply by linking their medical schools to a hospital, anymore than simply bolting on some labs to a hospital creates productive research capacity.

Virtually all countries, and regional economies, prioritise biomedical research probably within at least their top 5 areas of investment – despite frequently have significant deficiencies. While thinking that an AHSCs may be seen as the best local solution, local capacity can be lacking or weak. A critical worry is that AHSCs will be created from small, dysfunctional, and poorly performing institutions into large dysfunctional and poorly performing institutions, wasting public money, frustrating researchers and would-be entrepreneurs, weakening treatment capacity, and failing to deliver the innovations.

Internationally, AHSCs should be seen as sitting at the top of the healthcare pyramid, providing care from the simplest up to the most complex, and with unique expertise. While challenging to national/regional innovation strategies (which are often parochial in perspective), AHSCs should be at the forefront of international collaborations and integral to globalisation of knowledge transfer and evidence-based care.

Therefore, creating an AHSC as a driver of innovation and home to entrepreneur is not to be undertaken lightly.

One aspect of the AHSC that is particularly important to conceptualise and operationalise effectively is how they commercialise their intellectual property as a result of being both owners of problems, and creators of solutions to these problems. Risks here include inappropriate de-risking of research, premature efforts at commercialisation, confusion over ownership of the work itself, and conflict between institutional components on the methods to choose. These all track back into the AHSC itself, and how it is governed and how the executive suite and board, decide what can and cannot be done, or done well.

The paper draws on the author’s professional experience of working in an AHSC, working with an AHSC in thinking through their commercialisation strategy, and comparative policy research on commercialisation of research and strategies.

What is an Academic Health Science Centre?

AHSCs come in many forms. Understanding why particular arrangements are needed is important to ensuring that AHSCs are not created out of poorly performing component institutions. They are not simply an aggregation logic for pooling knowledge and capabilities. AHSCs can be vertically integrated providers through to a confederation of autonomous institutions. In some countries, the structure of AHSCs is accredited, mandated or otherwise designated, while in others, they emerge as a logical and rational solution to various research/ treatment/ teaching challenges. In addition, AHSCs also form networks for further collaboration.

Depending on national funding systems in higher education and in healthcare, AHSCs may have to deal with a large number of government ministries or agencies (in addition to health and higher education: social/community care, research councils, labour, industry/commerce ) which may be at differing levels in government (national/federal, state, local) as well as charitable and international sources. With this comes a diversity of public supervisory and oversight arrangements, which unsurprisingly may conflict on a number of levels: research priorities, service delivery objectives, degrees of institutional autonomy, and not to ignore the diversity of political interest which may complicate this further.

And within this mix, the challenge of coordination looms very large, to accommodate the autonomy of constituent parts, public accountability and institutional mission.

How should AHSCs organise themselves to conduct research and development for commercialisation?

AHSCs should be understood as accelerators of innovation. In virtue of owning the problems, they can disseminate new practices, enhance the evidence base for treatment options, and alter the very structure of service delivery itself.

Therefore, a critical issue for an AHSC is how they go about commercialisation, that is, operationalising the acceleration and dissemination of innovation and how they enable the entrepreneurial nature of researchers.

Particular challenges arise when higher educational institutions and healthcare organisations are state owned and run, with the result that staff (academics and researchers) are public employees or civil servants. This has the potential to create difficulties for individuals who may wish to be entrepreneurial yet retain their relationship to those issues which sparked the innovation in the first place.

Problems in this area have been raised by the French government with respect to the visibility and commercialisation of national research from state-owned laboratories and from the universities themselves. Institutional restrictions on commercialisation can create conflicts as in the UK where the universities pursue one approach while NHS hospitals use NHS/Department of Health commercialisation strategies.

External sources of seed capital are faced with constructing sensible funding arrangements in this environment. This has led institutions such as Karolinska in Sweden or Imperial Innovations in the UK to create an entrepreneurial subsidiary to deal with the commercialisation process. We are a long way from simple technology transfer here.

What are implications for policy: on research, on commercialisation and on higher education?

At some level, AHSCs are ill-defined in the European context, what their characteristics are, how they are organised and perform. Sensible investigation is needed to identify the performance, role and function of AHSCs in Europe, and to understand whether they are in fact a nexus of innovation or a quagmire of bureaucratic interference.

We need lessons and cases to draw on to understand how to structure appropriate innovation policies that may require the formation of high performing AHSCs that can be breeders of entrepreneurs. We also need to think beyond biomedical research as the potential scope of AHSCs includes innovations in systems and ways of working, health information technology and software, medical devices and not just medicines and so on. This nexus of innovation is very broad.

As someone who sees the challenge of AHSCs through both the institutional as well as policy lens, some key areas of priority are implicated and which are presented as conclusions:

• Funding of AHSCs is not quite the same as funding the constituent parts, so national policies need to be harmonised if AHSCs are to become effective accelerators of innovation and enablers of entrepreneurs. This will raise coordination challenges for governments as the incentives they deploy may come from different pots of money with differing purposes.

• Institutional design is important and only suitably high performing institutions should comprise an AHSC; this has implications for whether a national accreditation system should be used (England), or policies and initiatives to advance the role of AHSCs (Canada).

• Commercialisation design is important and plays to national policies on public ownership of publicly funded research, whether state-owned research infrastructure should be disposed off to non-state ownership, with corresponding implications for the employment status of entrepreneurs. National taxation and entrepreneurial policies can be remarkably short-sighted and counter-productive; we really need to understand how bad some national legal frameworks are, and how good others are. AHSCs will be embedded in these legal frameworks, so how productive they can be is linked.

• We really need to understand how national policies can encourage the introduction of high performing AHSCs where none exist, or prune the numbers of AHSCs if they have proliferated without also achieving high levels of (international) recognition and performance, or enable existing AHSCs to be real drivers of innovation.

Evidence of market failure?

Academic Health Science Centres combine teaching, research and healthcare service delivery. They are complex organisations bringing together hospitals with academic institutions, and embrace socially important missions. They employ people who work on wards, caring for very ill people, as well as researchers working at the limits of our knowledge. Reconciling these twin challenges in particular is important because many front-line staff are users of research results through medical devices and medicines, yet have little direct involvement, and perhaps interest in, research. At the other end are researchers, particularly those involved in basic research. The translation challenge is to figure out how these basic researchers and their work can link, if at all, to the issues confronting patients. Much research goes nowhere, but even failures are important research learning.

This is why research translation, the bench to bedside agenda, has become so very important. But it is fraught with conflicting interests, as basic researchers are skeptical, for understandable reasons, that mission directed research should replace the basic research priorities. My reason is that we, as humans, are simply not smart enough to pick the winners, as serendipity and luck are research colleagues. Those faced daily with the problems and challenges of disease and treatment may not fully understand this, as they demand better tools and methods. They don’t understand why a good idea can’t be made easier for them to use (taking sensible account of risk of course). For them the issue is adoption and diffusion, not invention.

Somewhere in this mess lie people who can bring products to markets, meaning in effect that they link ideas to markets, frequently a commercial activity involving money but also a bit like a dating agency, of bringing people with ideas together with people wishing to solve problems in a practical manner. Sometimes governments have to take on this role, and sometimes they are so enthusiastic that they drive the risk takers away and all the funding and commercial responsibility falls on the public sector. There are risks here, as for every dollar/pound/euro that the governments put into a risky development pot, the private sector takes out the same amount. This creates the impression of market failure in commercialisation, but is really more an example of the government crowding out investors. Unless governments have become particularly good at commercialisation, something commentators are broadly agreed they are not very good at, this defeats the whole research process, and leads to a public welfare-like system of research and development.