Joe Randolph, President and CEO of the Innovation Institute

Joe Randolph, Innovation Institute

Mark Masselli: This is Conversations on Healthcare , I’m Mark Masselli.

Margaret Flinter: And I’m Margaret Flinter.

Mark Masselli: Well Margaret a shocking loss has happened with the untimely death of
Supreme Court Justice, Antonin Scalia the soul of the High Court’s conservative wing
and an ardent foe of the Affordable Care Act.

Margaret Flinter: Well Mark Scalia’s passing leads the court with an even split along
ideological lines at a time when some very important health related matters were
coming bef ore the High Court, this case has involved Texas Abortion Laws, the
mandate requiring employers’ health plans to provide birth control to employees.

Mark Masselli: And it's possible that the decision o n these health related matters could
be put on hold un til when Ninth Justice is approved for the vacancy that in itself is a big
emerging story while President Obama is saying, he will announce candidate for the
position. Many political opponents are demanding that the decision be left until the new
president has been elected. It will certainly be an interesting story to watch unfold.

Margaret Flinter: And in the meantime health reform is moving forward in many
meaningful ways, coverage for about 30 million Americans has been secured under the
Affordable Care Act according to most recent numbers. And I think we can say
innovation in the healthcare space i s reaching a fever pitch , what do you say .

Mark Masselli: I think you are right , and our guest today is overseeing a new kind of
he alth innovation model , recently lauded by the Harvard Business School as one to
watch.

Margaret Flinter: Our guest today Joe Randolph, President and CEO of the Innovation
Institute, a Southern California based Innovation Lab inventor operation aimed at
im proving healthcare delivery in this country.

Mark Masselli: Lori Robertson, Managing Editor of FactCheck.org stops by, she is
always looking to uncover misstatements spoken about health policy in the public
domain , but no matter what the topic , you can he ar all of our shows by going to
chcradio.com.

Margaret Flinter : And as always if you have comments , please email us at
[email protected] or find us on Facebook or Twitter @chcradio because we love to
hear from you. We will get to our interview with Joe Randolph in just a moment.

Mark Masselli: But first here is our producer , Marianne O'Hare with this week's headline
news.

(Music)

Joe Randolph, Innovation Institute

Marianne O'Hare: I'm Marianne O'Hare with these healthcare headlines. The sleuths of
epidemiology are on the case , researchers analyzing the recent outbreak and rapid
spread of the zika virus are studying its genetic components to try and understand why
a virus has been around for almost 70 years and has always been considered a mild
cousin of its other mosquito borne pathogens like malaria and dengue fever. While
there is now real concern for connection to major birth defects thousands of babies born
to women in Brazil where the outbreak has been most prevalent had been born with
serious birth defects including micro cephaly . And while world health officials are
cautious about laying all the blames for those defects on zika alone , they do warn it
poses a serious threat to women who are pregnant or trying to get pregnant and
travelling to South and Central America as w ell as the Caribbean.

Meanwhile with a vaccine at least 18 months away the World Health Organization is
considering a number of other methods to combat the spread of zika including
genetically modified mosquitoes and bacteria that can thwart the developmen t of
mosquito larvae. US health officials are gearing up for warmer months when that type
of mosquito that carries the zika virus will be found along gulf coast sates
predominantly .

More cases of Legionnaires ’ disease had been reported in Flint, Michigan where the
tainted drinking water case continues to unfold , families in the region are being supplied
with daily allotments of bottled water and some homes have been outfitted with special
filters which removes most of the harmful toxins for bathing and drinking. Investigation
into the crisis and who is responsible continues.

Russia is claiming that US is responsible for air strikes on four hospital s in war - torn
Syria, the air strikes appear to be intended direct hits o n the medical facilities including
the children and maternity hospital and one run by Doctors Without Borders .
International observer s say, it was Russian missiles fired on those health facilities , a t
least 50 have died in the attacks and thousands of peo ple in the region have been left
without any medical facility to treat their sick and wounded.

And Lyme disease has impacted many tens of thousands who have been infected,
many of whom go on to develop lifelong symptoms with very few available treatments.
Researchers at the Mayo Clinic have uncovered a new agent responsible for Lyme
disease , Borrelia mayonii is a strain discovered in patients in Minnesota and Wyoming ,
symptoms differ slightly from the primary Lyme strain first identified in Lyme ,
Connectic ut some decades ago. Currently antibiotic use soon after infection is the only
known way to stop the events of the disease. I am Marianne O'Hare with these
healthcare headlines .

(Music)

Joe Randolph, Innovation Institute

Mark Masselli: We are speaking today with Joe Randolph, President and CEO of the
Innovation Institute, a unique collaboration of nonprofit health systems, representing
over a hundred thousand healthcare professionals from across the country , dedicated to
accelerating develo pment of technologies to improve healthcare delivery. Prior to
launching the institute , Mr. Randolph served as Executive Vice President, Chief
Operating Officer and Chief Financial Officer for St. Joseph Health System , a $5 billion,
16 hospital, multi - sta te healthcare system. He earned his MBA at Pepperdine
University. Joe welcome to Conversations on Healthcare.

Joe Randolph: Thank you, appreciate being on the show.

Mark Masselli: As we go through this real phase of the innovation and there are
thousan ds of entrepreneurs working to launch either new products or develop the new
platform that will have a positive impact on the healthcare system. And we have been
fortunate to talk with a lot of innovators and entrepreneurs, we had Dr. Topol and Esther
Dys on and just recently we had Aneesh Chopra really discussing their approaches to
launch inventors in the health industry, could you tell our listeners about the Innovation
Institute, and congratulations Harvard Business School recently lauded you as a
groun dbreaking model to watch, what sets your institute apart?

Joe Randolph: Well, we launched about three years ago . We are a for - pro fit limited
liability company. We are authorized to have seven what we call member owners or
investors as health systems. One of the big differences in our model is that it's self -
sustaining and so innovation often times from concept to when it gets to m arket can be
several years a nd so we wanted to set up a model that would be profitable and self -
sustaining from the get - go . So the model that we have is somewhat unique , i t's set up
to be a collaborative and the governance structure that we have is set up to be very
nimble so that we could take advantage of market opportunities.

Margaret Flinter: Well Joe so often some of the best innovations come from those
within the care delivery system I am betting yourself , some of those at St. Jos e ph during
your tim e there , from clinicians and other people who work on the frontlines in
healthcare, but you make the point that clinicians and the organizations they work for
and other healthcare workers often have neither the resources nor the time and maybe
not the trai ning to fully develop their idea . So talk with us about how your Innovation
Lab offers a different kind of support to the partners that you are affiliated with and how
our system helps bridge that resource gap from a very bright idea to a viable market
pl ace innovation?

Joe Randolph: Sure. And one the things that I found early on is, the definition of
innovation varies from organization to organization, and our model is basically a
problem to space model to where we tap into the physicians, clinicians, e mployees that

Joe Randolph, Innovation Institute

are on the frontlines to get their ideas and solutions to problem s that they are dealing
with and have been dealing with for years , and especially on the nonprofit space most
organizations don’t have the ability or the resources to assist phy sicians with taking their
ideas to mark et . And so what we put together is we have on staff PhD s, MDs, MBAs
that do the initial evaluation and then take of the ideas, we work with the inventor they
get pretty significant rewards for things that are able to go to market. There is no cost to
the inventor or to the health system for us evaluating the ideas, we basically, the health
systems are owners and we earn our nickel incubate the concepts all the way from idea
to commercialization.

And we also have as y ou said, alliances with like Cleveland Clinic and so while we have
expertise on staff , the amount of subject matter experts that we would need to have to
evaluate all the possible ideas that could come in from healthcare would require us to
have staff of y ou know hundreds. And so what we do is, we have a strategic alliance
agreement with Cleveland Clinic and we can tap into their research arm and also into
their peer physicians review groups that have subject matter expertise to help do a
deeper evaluation of the concept s .

We have industry partners such as Boston Scientific and Dell and Deloitte and their
interest lies in, that they wanted to be able to tap into our portfolio of ideas a nd co -
develop things with us or conversely if they have something that they want you take to
market and they want to partner with someone, they can bring that to us and we can
bring together physicians from across the country to work with them.

Mark Massel li: You know Joe so many of the world’s great innovators celebrate the
notion of failing forward , a phrase your organization embraces and yet while failure is
critical in innovation it can be catastrophic in the healthcare arena, could you talk about
the importance of being able to incubate ideas within the system that allows failure to be
part of the path success and how does your Innovation Lab function with failing forward
in mind?

Joe Randolph: Within the healthcare, hospitals and health systems they tend to be very
risk – averse environments I mean they focus on things like Lean Six Sigma evidence
based medicine and standardization. And it's all for a good reason, but when you think
about innovation and the culture of innovation , you really need to be able to reward
failure and take risk in order to actually, ultimately turn that in break through and find the
solution and Edison was the one that said, “ I didn’t fail 10,000 times , I found 10,000
ways not to make the light bulbs ” and I love that comment b ecause I think it's really
appropriate.

So we have an environment that’s very safe for the inventors . A lot of times they will
bring a problem that they are looking for a solution for we will do the review of prior art

Joe Randolph, Innovation Institute

and find that there is a solution ou t there . And the physicians are just as pleased to find
that there is a solution to the problem that they are trying to solve than it is, that they are
taking their ideas to market. So having a problem s - base d model and having physicians
that are scientists at heart is very rewarding to help them take their ideas to market.

Margaret Flinter: Well Joe certainly since the passage of the Affordable Care Act we
have seen a dramatic shift towards the notion of valu e based care, and this quest for
the triple aim of safer care and better quality, better outcomes, lower cost means that
the healthcare industry has to recalibrate how it generates the capital to keep running
efficiently while also containing cost and impr oving outcomes, maybe you could talk with
us a little bit about why your approach to innovation is so vitally important at this
juncture in health industry reform, in one way for creating viable new revenue streams
for health systems just thrive in this fe ature of more value based care.

Joe Randolph: Well in the next 20 years there is going to be more advances in
healthcare than there has been in the last 200s. So the change that’s coming is not
incremental, it's going to be exponential and I think we hav e not set up our healthcare
system to really facilitate innovation. And so having a vehicle like ours that can be a
collaborative to bring organizations tog ether to focus on it, I thought was something that
was very much needed I think we are in the right spot at the right time, finding solutions
from within healthcare , using the providers and the expertise so that people that are
dealing with those problems I think it's much better than having it legislated or come
from the outside and there is a very gre at acceptance for the model that we put forth
and the provid ers that we are working with I think is very pleased with our approach.

Mark Masselli: We are speaking today Joe Randolph, President and CEO of the
Innovation Institute dedicated to accelerating development of new technologies to
improve healthcare delivery . Prior to launching the institute , Mr. Randolph served as
Executive Vice President, Chief Operating Office r and CFO for St . Joseph of Health
System of $5 billion, 16 hospital, multi - state heal thcare system . Joe you know we also
are engaged in research but you have said that truly disruptive innovation requires more
out of the box as well as in the box thinking , illuminate for our listeners what you have
learned from applying those types of sys tems while at the helm of a large health
organization and what work can be achieved from incubating ideas outside the
organization?

Joe Randolph: You know I often times in my previous roles had physicians or clinicians
come to me with what I thought were great ideas and because of compliance issues or
because the physician was you know big admitter at the hospital there is legal issues
with us investing in his idea or concept and so I have always wanted to have a vehicle
where we could help these physicians take their ideas to market. And so creating an
environment that’s safe to where they can bring their ideas I mean it's almost like they

Joe Randolph, Innovation Institute

are in a toy store because they are so excited about it and I think healthcare as the
organizatio ns grow and they get larger , they get very conservative and very risk - averse .
And it's also at a time when, where the Affordable Care Act and budgets getting tighter ,
it's difficult for organizations to embed innovation within their health system because
they look at a very short horizon in terms of the returns. And so what we try to create
with our unique business model what we have a portfolio of service companies that we
provide to industry and the profits from that then get reinvested into innovation. It allows
us to take a longer term view on things you know healthcare with using lien and saying
that, I think it works really well in terms of the incremental reductions, the
standardizations, patient safety and elimination of errors but it doesn’t work well when
you are thinking about innovation where you need to take risk.

Margaret Flinter: Well Joe I thought you have made the interesting point that many
innovation enterprises are internally led such as at Kaiser Permanente and the Mayo
Clinic and spe cific to their own bottom - line which is little different than replicating these
innovations in the broader marketplace, so we would be interested in maybe hearing
about your take on the inherent strengths and challenges in your model of collaboration
with multiple entities.

Joe Randolph: Lot of the problems that we are dealing with are consistent across
organizations. And so having the ability to tap into multiple organizations to look for
solutions, I think you are going to come up with better ideas, the more minds you have
working on the same problem. And that was some of the philosophy that went into
model was that , if we can set this up to be truly a collaborative we can come up with
better solutions. And one of the processes that w e have set up is called facilitated in
innovation where we will take a specific problem state, bring together subject matter
experts from across these different systems as well as Cleveland Clinic and spen d three
days focused session on looking for a comme rcialization opportunities and solutions to
these problems.

Mark Masselli: You know Joe I was looking at a stat that said, over half of the
entrepreneur startups fail to make it but we often sort of lament the amount of time it
takes to get from the bench to the bedside particularly with the drugs sort of on average
up to 17 years and yet we maybe in an important inflection point where technology and
big data and other forces can change the pace of success and what kind of
breakthroughs are you envisioning will emerge from your research approach? So tell us
where you see the greatest potential for growth right now ?

Joe Randolph: I am not a scientist. My background is finance so everything is a shiny
object to me . But when I get with the scientist and ph ysicians, a lot of times the experts
will tell me that it's not that great of an idea but I think that genomics and personalized
medicine is going to be a huge area of opportunity. I think brain research, there is still

Joe Randolph, Innovation Institute

little really known about the brain and I just read this morning about some work at UCI
where they are setting up algorithms that help s somebody that’s paralyzed to walk and
you know tissue regeneration, Big Data, artificial intelligence all areas that I think have
tremendous potential and opportunities. The more that we can bring industry and
providers and clinicians together I think the better chance we have of having some huge
breakthroughs.

Margaret Flinter: Well Joe we have certainly seen that excitement within our own
research instit ute as Mark noted and just how powerfully and compellingly exciting it is
for people in healthcare to make a positive contribution beyond day - to - day care but
something that really changes the system . So I guess we would like to ask you before
we wrap up, would you like to share with us a couple of the things that you have seen
the Innovation Institute receive as the bright ideas and move along or be well along the
road to becoming sustainable part of the healthcare system?

Joe Randolph: You know there is several things, I mean it's part of the, the biggest part
of my enjoyment from my job, it comes from meeting with these inventors. They are so
passionate about finding these solutions and then come to fruition. There is a medical,
somebody that was an Ol ympic hopeful soccer player that had an ankle injury , never
was able to get the right kind of treatment, never was able to fulfill his dream, he
became a physical therapist at one of the hospitals that we work with, developed this
ankle therapy device that we are now, we have patterns on and it's going to market. I
think it's probably one of the best devices for ankle injuries that I have seen in terms of
the treatment, and so that one is one that I am looking forward to see and how it plays
out.

There is another one that a surgeon came up with that’s, and sometimes you know it's
not the pharma or the big scientific brea k throughs it's just a simple solution that
somebody has been dealing with for their career that could make a big difference . And
this one is for needles you know they have sharp s containers in the patient rooms t o get
rid of the needles when they give patients shots but in the OR they set them on the tray
and often times you know physician or nurse will reach and get that needle sti ck and
this is something that part the syringes and change the needles and count the sutures,
it's a device that sits right on the tray and so that’s another one that we are so excited
about. So those are just couple, but there are several more I could go on for probably
half hour to talk about some other things.

Mark Masselli : We have been speaking today with Joe Randolph, President and CEO
of the Innovation Institute dedicated to accelerating development of innovation
technologies aimed at improving hea lthcare delivery. You can learn more about their
work by going to ii4change.com or follow them on Twitter @ii4c hange . Joe, thank s so
much for joining us on Conversations on Healthcare today.

Joe Randolph, Innovation Institute

Joe Randolph : Thank you , I enjoyed it .

(Music)

Mark Masselli: At Conversations on Healthcare , we want our audience to be truly in the
know when it comes to the facts about healthcare reform and policy. Lori Robertson is
an award - winning journalist and managing editor of FactCheck.org , a nonpartisan,
nonprofit consu mer advocate for voters that aim to reduce the level of deception in US
politics. Lori what have you got for us this week?

Lori Robertson: In one of the democratic presidential debates , Hillary Clinton said that
the Affordable Care Act had helped more African American s than any other groups to
get insurance, but the Obama administration’s own figures show a larger drop in the
uninsured among Latinos.

The Department of Health and Human Se rvices released an analysis in late September
2015 , saying 17.6 million people had gained health insurance coverage under the ACA.
The administration said that figure included three groups: young adults who were able
to stay on their parents’ policies unt il age 26, those who signed up for the Medicaid
expansion and those who gained coverage through the state and federal insurance
marketplaces.

The rate of uninsured African American adults dropped by 10.3 percentage points, a
greater decline than among whit es but not as much as the rate drop for Latinos.
Between October 2013 and September 12, 2015 four million Latino adults gained
coverage, a drop in the rate of uninsured of 11.5 percentage points. For African
Americans 2.6 million people gained coverage, a 10.3 percentage point drop in the
uninsured and for white adults 7.4 million gained insurance, a 6 percentage points drop
in the uninsured.

A December 2014 Urban Institute report projected the ACA could “substantially narrow
differences in un - insurance r ates between whites and all racial/ethnic minorities except
blacks” why , because blacks disproportionately live in states that did not expand
Medicaid. Overall, a larger percentage of the Latino population is still uninsured 30.3%
among African Americans 12.1% are uninsured and among white Americans 8.3% are
uninsured. And that’s my fact check for this week, I am Lori Robertson , Managing
Editor of FactCheck.org.

Margaret Flinter: FactCheck.org is committed to factual accuracy from the country's
major pol itical players and is a project of the Annenberg Public Policy Center at the
University of Pennsylvania. If you have a fact, that you would like checked, email us at
www.chcradio.com . We will have FactCheck.org's Lori Robertson check it out for you
here on Conversations on Healthcare.

Joe Randolph, Innovation Institute

(Music)

Mark Masselli: Each week Conversations highlights a bright idea about how to make
wellness a part of our communities and everyday lives. Clubfoot is one of the most
common childhood deformities in the world , a condition that in the past was not
correctable without the intervention of expensive and invasive surgeries , in low resource
parts of the world access was nearly impossible and as a result clubfoot is the leading
cause of disability in the developing world.

Chesca Colloredo - Mansfeld: The effects on the child are devastating. It also has an
incredible impact on the mom. These kids have to be taken care of and often the
mother is blamed for having a child with any kind of a problem .

Mark Masselli: But a breakthrough treatment called the Ponseti method has changed
all of that. Chesca Colloredo - Mansfeld was an employee at the University of Iowa
where this new non - invasive inexpensive intervention was developed which corrected
the problem in a series of months often before a child even begins to walk.

Chesca Colloredo - Mansfeld: The health care provider gently manipulates the tendons
and ligaments in the foot and move the foot about 10 to 15 degrees and then places the
feet in a long leg plaster of Paris cast, that cast is on for one week and then they repeat
the process and they just gradually move the feet.

Mark Masselli: She and her colleagues founded miraclefeet, a nonprofit organization
that identifies children throughout the world who can be treated for about $250 per child,
a tiny fraction of what the surgery would cost. Today miraclefeet supports over a
hundred clinics through partnerships in 12 different countries. Already having given
thousands of children in the developing world the chance to walk, run, play and to grow
into productive adults. miraclefeet has earned numerous awards for its innovative
treatment design and its ability to be easily deployed in low resource settings.

Chesca Colloredo - Mansfeld: We came up with a brace that the shoes clip on and off,
it's adjustable, the angles are fixed, so there is no p roblem with the medical efficacy of
it, and we can produce it for $20.

Mark Masselli: miraclefeet , providing a low cost treatment for children born with
clubfoot around the world , giving them a chance to live active and fully productive lives,
now that’ s a bright idea.

(Music)

Margaret Flinter: This is Conversations on Healthcare, I am Margaret Flinter.

Joe Randolph, Innovation Institute
Mark Masselli: And I am Mark Masselli, peace and health.
Conversations on Healthcare, broadcast from the campus of WESU at Wesleyan
University, stream ing live at www.wesufm.org and brought to you by the Community
Health Center.