Allegheny Health Network is reaching across the pond for a new partnership.
The health care giant headquartered in Pittsburgh has signed a memorandum of understanding with the Israel Innovation Authority, creating a formal affiliation between AHN’s Research Institute and the Innovation Authority to support Israeli health care startups.
The agreement will provide the IIA with access to AHN facilities for pilot projects, advanced technological support and other forms of program assistance.
Dr. Jeffrey Cohen, chief physician executive for innovation at AHN, said that the partnership was brought to him by the 412×972 group. Supported by the Jewish Federation of Greater Pittsburgh and assisted by the Allegheny Conference on Community Development, 412×972 takes its name from the area codes of Pittsburgh and Israel. Its mission is to facilitate relationships between businesses in Pittsburgh and the Jewish state.
“We started looking at it from the standpoint that anything that brings innovation into AHN, and Highmark is a good thing because it stimulates thought and change,” Cohen said.
Israel, he noted, has a lot of innovation but it’s a relatively small country with a population of about 10 million people. Pennsylvania, by comparison, has nearly 13 million residents.
“The innovation that goes on there has to leave Israel to be successful,” Cohen said. “Every country in the world wants to come to the United States.”
The agreement, he said, gives AHN a first look at companies created by the IIA in the health care space. The IIA, in turn, gets access to the American market with the intellectual property staying in Israel.
Any deals, Cohen said, will be between the health care network and the individual companies. The IIA simply lays out the rules for engagement.
AHN and Highmark Health Insurance, Cohen said, is the second largest integrated health system in the United States, serving 6 million people and spanning four states.
“There are a lot of problems to solve. If you bring in something that helps us in this domain, you get immediate traction with a very large insurer and this keiretsu (a Japanese term meaning a business network) of Blues around the country, where everybody talks to everybody,” he said.
Included in the advantages of working with AHN is Pittsburgh’s infrastructure, Cohen noted, which includes the colleges and universities and the city’s workforce. Pittsburgh’s not only strong in health care, but in computer science — specifically artificial intelligence and advanced manufacturing in robotics, which, Cohen said, the IIA is trying to promote within Israel.
When the collaboration is finalized later this year, applications to the new program will be opened in Israel with the IIA and AHN jointly selecting, screening and approving finalists. The selected companies will then receive up to 50% funding from the IIA to conduct joint research and development projects or pilots with AHN.
Cohen expects to begin seeing fruits from the partnership in the next six to 12 months.
The relationship, he said, is one more piece in the changing health care landscape.
“Innovation is very important to that,” he said. “My job is to bring ideas and look at marrying product development cycles to ideas. So, where are we going? What do we need? What are the problems we have?”
The payoff for Israel is economic development, he said, adding that in the context of 360 million Americans, the GDP for health care in the United States is approximately seven times larger than the Israeli GDP.
“That’s just health care. Our model is going through changes right now. All the stresses on the system are producing different avenues [of opportunity.] They’re producing products that are going to, in many cases, simplify, improve and deliver care faster, in a different fashion, in a more digital fashion. But it’s a relatively small market and they’re looking to export this technology for obvious reasons,” Cohen explained.
The IIA has a budget of approximately $200 million. The partnership in Pittsburgh, he said, is “a very big story.” PJC
David Rullo can be reached at firstname.lastname@example.org.