Occasionally, EAB’s Business Affairs Forum examines topics of interest to a particular segment of our membership—in this case, institutions with academic medical centers. If you have suggestions for focused segments or themes, we welcome your input at [email protected].
- Focusing only on minimizing risk in the AMC-university relationship leaves mission- and revenue-boosting opportunities on the table.
- Regardless of organizational structure, there are three areas most ripe for AMC-university collaboration: philanthropy, research and innovation, and future-oriented academic programs. This overview focuses on the first two.
In laying the groundwork for a strong AMC-university relationship, minimizing risks to your institution through an aligned governance structure and a sound financial model is a critical first step. But stopping there without maximizing the upsides of the relationship in creative and entrepreneurial ways can leave strategic advantages and mission-boosting revenue on the table.
Growing the university’s top line and ultimately moving both the AMC and the university toward strength—particularly at a time in which the evolving market for health care services has produced anxiety about the future—should be at the top of leaders’ agendas. This article highlights just two areas where AMCs and universities can find common cause for collaboration, regardless of organizational structure:
- Research and innovation
When it comes to the work that goes into securing financial gifts from donors to universities and medical centers, the benefits of partnering up are clear. The most successful cases of integrating AMC-university donor relationship activity have included a handful of common tactics, including: 1) implementing credit sharing policies to incentivize cross-disciplinary pursuits; and 2) deploying an integrated, cross-departmental database showing a 360-degree view of a donor’s relationship with the university and hospital.
By actively and structurally aligning philanthropic efforts, universities and AMCs can break free of uncoordinated approaches that incentivize competition between the hospital and university. When gift officers work together, they can make a stronger case to prospect and donor audiences by showcasing the leveraged impact of partnerships and cross-institutional assets. Today’s donor-investors are looking for opportunities to support initiatives that will lead to transformative results, irrespective of academic and organizational silos that have traditionally limited fundraising efforts.
At the University of Chicago, the emphasis on collaboration and coordination between the university and AMC advancement offices has paid off. A cross-departmental database has now enables gift officers to identify and track prospects with multiple areas of interest and share credit for successful gifts. A quarter of the university’s six-figure donors have multiple areas of interest that gift officers can tap—and these multi-interest donors give on average about three times more than single-interest donors, opening up new opportunities that had previously remained siloed.
Research and innovation
Research, as a cornerstone of the tripartite mission of the AMC, has a critical role to play in shaping the reputation of the institution and attracting faculty, physicians, students—and even patients. Institutions seeking to maximize the AMC-university relationship may be interested in exploring strategies to take their discoveries from “bench to bedside” and benefit from tech transfer revenue, including patents, licensing, and equity. A major driver of these efforts is venture capital, which is growing in the AMC world, with $5 billion in investment in health care companies in 2016, up $400 million from the prior year. Even the NIH, through its Clinical and Translational Science Awards Program, is taking a market-oriented approach, devoting over half a billion dollars annually toward helping universities turn clinical and laboratory observations into market-ready patient care solutions.
To support these efforts, a growing number of institutions have established startup incubators and accelerators to amplify discoveries developed in the laboratories and operating rooms of AMCs. This approach is attractive for a number of reasons:
- Risk-averse companies now prefer to acquire start-ups that have developed and tested prototypes rather than pursuing internal R&D.
- Given the historical limits of commercialization through licensing patents, startup incubators and accelerators offer a different approach to pursuing alternative revenues through licensing or equity stakes.
- Universities can showcase the impact of their research and their investment in regional economic development.
Physicians are also expressing greater interest in applying their research to digital health and biomedicine startups, and medical students likewise increasingly expect to incorporate entrepreneurial thinking into their medical education. As just two examples of institutions supporting these trends, the University of California system has created a $250 million venture fund for startups with ties to its schools, medical centers, and research labs. The University of North Carolina at Chapel Hill has launched a $10 million fund, with half of the seed money coming from the AMC for supporting startups with medical application.
How to get the most out of the university-AMC relationship
Universities and AMCs that work together—in their donor pursuits, research ventures, and more—will be best poised to maintain and expand their bleeding-edge position in the constantly evolving health care industry.
Interested in learning more about where university leaders see the greatest opportunities—and threats—in their relationships with AMCs? Check out this overview of a recent survey the Business Affairs Forum conducted among chief business officers of universities affiliated with AMCs.