Lessons from Shanghai: One Innovator’s Path to Adoption
Editor’s Note: Cambia Grove is proud to partner with the innovation community to amplify their perspectives on topics applicable to the larger health care ecosystem. This guest post from Brian Glaister, Conflux Innovations, looks beyond our domestic health care system for international perspectives on innovation that entrepreneurs can incorporate at home.
The views expressed in this article are solely those of the author and do not necessarily reflect the opinions or positions of Cambia, Cambia Grove, or any other entity or organization.
Nearly a decade ago in my Seattle basement, my colleagues and I cobbled together a hardware store prototype of what would become Kickstart, an unpowered exoskeleton to help stroke survivors and people with other neurological conditions relearn to walk. In recent months I have had the unbelievable experience of traveling to Shanghai to see Kickstart treating patients in its initial stages of commercialization in China. Now that I’m back home in Seattle from my latest visit I find myself comparing the two health care ecosystems and wondering how we might leverage both to bring innovation to the domestic marketplace.
The first thing you notice upon landing in Shanghai is just how much bigger things are in China. In the distance of a train ride from Seattle to Portland you might pass by 100 million people (and do so in 1/3 of the time). In the US, many large cities don’t have specialty rehabilitation hospitals and those that do top out at 250 beds. In Shanghai alone, there are maybe a dozen rehab hospitals. The first to use Kickstart, Shanghai Sunshine Rehabilitation Center, houses 700 beds currently and has plans to add a new building to double the size of the facility that still won’t come close to satisfying demand. With the rapid urbanization and upward economic mobility of China’s population, the health care system is straining against the needs of the population and the need for innovation to amplify the efforts of clinical staff is astounding.
Fortunately, the scale of the opportunities appears to be met by the scale of the support provided to innovators. I had the opportunity to visit HiMed which is one of many incubators in the region supporting health care innovation and is funded by a mix of corporate sponsorship, government support, and rent paid by startup tenants. At HiMed, entrepreneurs gain access to sector-specific office space to support software development, medical device manufacturing, and pharmaceutical discovery science. HiMed also partners with the Shanghai University for Science and Technology to administer an entrepreneur training program based on Stanford Biodesign that claims to have trained thousands of entrepreneurs through the program in the past decade. Additionally, HiMed helps start-ups secure approval from the Chinese Food and Drug Administration, navigate the labyrinth of local commercial and manufacturing licenses required, and gives entrepreneurs access to capital through its own angel fund. HiMed is bursting at the seams with tenants despite covering over 30 square miles of area. Opportunities abound to help shepherd health care innovation in Shanghai into the hands of people who need it.
Locals joke about “Chinese Speed” and this is well-founded as Kickstart has progressed in China at a pace I could never have dreamed of in the United States. In the U.S., I have waited upwards of six months for institutional review board (IRB) approval for minimal risk studies. In less time our partners in China not only secured IRB approval for a similar study, but also shepherded 30 patients through the study, have a publication pending describing the positive results, and generated sales demand from their clinical partners in the process. It took us several years in the U.S. to generate this level of clinical and commercial traction with Kickstart but in China it happened in the blink of an eye.
I’ve heard the narrative in Western media that while China is a rising economic power, it is growing by imitating the innovations of others at best and copying them at worst. That may be true in many cases, but at a senior living company called iCare I saw innovation in terms of technology, care delivery, and payment that demonstrated the growing strength of Chinese creativity. In the U.S., I don’t care to recall the number of prison-like facilities I have visited where seniors are largely forgotten by their communities and isolated in large suburban compounds that collect a stream of revenue under a fee-for-service model while providing a depressing existence to residents. iCare, on the other hand, has blazed a different path leveraging innovative technology to justify payment for improved outcomes while ensuring that residents maintain connections with their communities. We witnessed a local kindergarten completing a school art assignment with the seniors at the facility and learned how iCare’s proprietary smart home technology not only documented improved outcomes but also helped residents seamlessly transition between their homes and back to the iCare facilities when medically necessary. iCare’s corporate headquarters more resembled that of a tech startup than of a health care provider with monitors mounted everywhere displaying mountains of data to monitor improved outcomes, but I only needed to see the smiles on the faces of their residents to know it was an intriguing model I haven’t witnessed stateside.
What does this all mean for the Seattle health care innovation ecosystem?
Certainly the grass is not always greener in Shanghai. While US-based patent trolls, in an ironic sign of progress, have set their targets on China to take advantage of a newly strengthened landscape for injunctions and damages, intellectual property theft remains a problem. Political distrust is at an all-time high between our two countries and the Committee on Foreign Investment in the United States is increasingly targeting health data companies and smaller cross-border deals for divestiture. Quality remains a problem for device and life science manufacturers which is perhaps best underscored by the January 2019 allegations that hundreds of children were given expired vaccines in China. Additionally, while the market is enormous, there is still strong downward pressure on price which will not support all health care innovations. And without good local partners, the Chinese marketplace will eat foreign novices alive.
Still, for many new innovations I can’t help but wonder if, with the proper partners, China might be a better initial market for Seattle-based health care entrepreneurs if not the end goal entirely. Start-ups are under extreme pressure to demonstrate traction to investors quickly and with limited resources. The cost to run a clinical study in China is much lower than in the US, and with the right partner to help navigate the labyrinth of regulations, the speed to collect the data is much faster. Competition between health systems is fierce in China given the plentiful choices patients have in concentrated population centers and as such sales cycles for innovative solutions can be much faster. And with over a billion mobile phone users, China offers consumer-focused digital health solutions a massive opportunity to quickly demonstrate user traction at scale. Commercializing health care innovation in China is certainly not without risk, but the potential rewards of demonstrating traction quickly and cheaply can be so large that many entrepreneurs may want to replace San Francisco in favor of Shanghai as their first stop on the path to adoption before preparing a domestic launch.
About Brian Glaister
Brian Glaister is the Managing Director of Conflux Innovations, a boutique consultancy that operates at the intersection between product development, sales & marketing, and operations to grow innovative companies to the next level.