Is an Academic Medical Center Partnership Right for Your Startup?

It’s not all glitz in the Ivory Tower. We pull back the curtain on how AMCs operate with tech companies to help set expectations for effective partnerships.

I collaborated on this article with my friend and former colleague, Donald Murry.


Many early stage healthcare companies need to validate their product in a clinical environment. That validation can range from learning how to incorporate provider-focused tools in actual care environments to understanding sticking points in patient engagement apps. We can all agree that in order to bring a strong product to market companies should test within the complexity of actual healthcare environments.

However, the struggle for many startups is how to identify the right clinical partners who are willing to work with untested solutions. Often founders are drawn to academic medical centers (AMCs) with the belief that AMCs are dedicated to exploration, science and research. While these are core tenets of an AMC’s research mission, often they only wrap around the walls of the hospital and the staff within it. In addition to advancing science, AMCs also have to operate like other health systems and those financial and strategic decisions don’t embrace the scientific method or the ‘fail fast’ mentality of tech companies.

There are a variety of reasons why AMCs hedge on early stage partnerships with startups:

  • They have to provide resources and opportunities for their own clinicians and researchers

  • They have multiple competing priorities and plan budgets far in advance

  • They want to manage their reputation and may be averse to risk

  • They are short staffed

  • They are legally bound to protect patient data via HIPAA

  • They aren’t set up for non-enterprise agreements within their legal dept and security vetting offices

If your startup is considering partnerships with Academic Medical Centers, be aware of some of the benefits and challenges of testing in that environment:

BENEFITS OF AMC PARTNERSHIPS:

  • Real life patient data: This is health technology company gold! Access to real patients gives you the ultimate end user feedback as well as clinical records. All other user testing pales in comparison to testing with your ideal end user. What you learn will help to rapidly validate your product, service, or idea. Additionally, you’ll gain insights into how you might pivot or expand your product or service based upon findings.

  • Testing workflows in clinical settings: Even the most experienced HIT teams can’t anticipate every point of friction when it comes to both the technological and human integration of new tools. Working with a hospital allows your team to see in real life how your product fits into how the teams already work. Inefficiencies and problems will become immediately clear and allow you to improve before launching widely. Additionally, most AMC’s have established systems that don’t have to be built from scratch, but will need integration. Integration with EHRs isn’t one-size-fits-all but you likely learn some helpful things for the future.

  • Research teams have done this before: Conducting a scientific study with process and outcomes data is an excellent benefit of partnering with an AMC. While you may pay for it, they have existing research support teams that can advise on how to run the study, how many participants need to be involved, and how to analyze the data. Be prepared that AMCs may be wary of outside vendors having access to sensitive data and parts of the care system, and may limit your access to them. However, startups can leverage an AMCs research staff, fellows, residents, as true human resources to move projects along.

  • AMC doctors and professors are incentivized to publish to keep their jobs: Have you heard the term ‘publish or perish?’ Doctors and researchers with academic appointments (aka professors) are incentivized to conduct research and publish the results in scientific journals for promotion. Bringing in new technology that aligns with an academic’s research interests is a nice carrot for collaboration.

  • Brand association: Everyone loves a prestigious logo that they can put on their website. Working with a reputable hospital system can be a big feather in your cap when it comes to establishing your street cred. IMPORTANT NOTE: You need to outline the terms of use of mentioning your partnership or using logos when you write your contracts with hospitals! Another benefit is that some AMCs have investment arms or established pipelines for funding startups. Once you are in a network you may have access to those resources.

CHALLENGES OF AMC PARTNERSHIPS:

  • You have to bring the money (or another incentive): Despite healthcare being one of our largest capital expenses in the US, health systems are often strapped for cash and run on slim profit margins. Those profits are typically used to purchase new essential equipment like MRI machines and update physical spaces. Most research is funded by outside grants. You may be expected to front the costs to validate your tool for the privilege of having access to the clinical environment. If you don’t have capital at the ready, you can consider partnering with researchers on grant applications to fund the research team and your company.

  • It’s unlikely to convert to a paid client: See Halle Tecco’s death by pilot blog post. If anyone is getting your product or service for free they are unlikely to start paying for it, unless a schedule for conversion to paying client is outlined in the contract or there is a planned inflection point to determine if the value you bring is worth the investment moving forward. The best attitude is to consider the partnership an investment in your business because of the insights and prestige you’ll gain.

  • Everything takes longer than you’d expect: Startups and hospitals work on different timelines. Most sales cycles are 12-18 months within hospitals…and that would be just to go from initial conversations to a signed contract. Then you need to plan time for writing the research protocol, IRB approval, and actually testing/ studying/ and validating the product. Planning to publish your results? You’ll need a few months to write the manuscript, time for it to be reviewed by journals, respond to edits, and then ultimately publication. This can take over a year! Work closely with partners to establish timelines but know they might not be totally accurate and make your peace with it.

  • Co-development might mean shared IP and shared profits moving forward: YOU NEED TO OUTLINE THESE TERMS UP FRONT. Some hospitals have investment arms. Some doctors are also interested in becoming co-founders. Hash out if your company is being treated as a vendor (therefore a totally separate entity) or a partner, and what the partnership entails as far as IP, credit, branding, marketing, and funding. You are going to want a lawyer to help you with this.

  • Each AMC has a unique environment: Just because you figure out all the nuts and bolts to be successful in one AMC doesn’t mean it will work with all AMS. They are unique: - Technically: They may use different electronic medical records and have differing levels of FHIR adoption.- Organizationally: Each has their own hierarchy, decision-makers, and purse-string holders. The level of autonomy given to researchers varies as well.

  • You will face technology fatigue: Even if what you offer is going to be AMAZING, people have differing opinions on having to learn how to use something new. Clinician fatigue is real. Documentation fatigue is real. The value of a product or service has to continually outpace the level of technical fatigue a clinical/research team is experiencing for it to be valuable and useful.

When we got together to write this article our goal was to impart some of our hard learned lessons to the health technology startup community. We have been on all sides of the table. We’ve championed innovative companies within the AMC environment, brokered partnerships between researchers and early stage product companies, and sat through some cringy sales meetings with companies that had no idea who their audience was. We believe in health care innovation and want great ideas to succeed! Part of a successful partnership is expectation setting and we hope that this will help your company approach academic medical centers with your eyes wide open.

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