#81: David Sylvan (UH Ventures)

David Sylvan (University Hospitals Ventures) [00:00:00]:

We're going to improve patient patient outcomes, but we're gonna do so from the perspective of, design, learn, and iterate in a real time time setting. What we love about some of these technologies is not necessarily the the initial use case. That's obviously important. That's the foot in the door. That's the, That's the initial value prop that you have to validate against in order to determine there's a there or there. But when you can make an identification that There are going to be other use cases and a broadened scope of offering down the road just by virtue of Company development, that gets us very excited.

Jeffrey Stern [00:00:39]:

Let's discover the Cleveland entrepreneurial ecosystem. We are telling the stories of its entrepreneurs and those supporting them. Welcome to the Lay of the Land podcast, where we are exploring What people are building in Cleveland. I am your host, Jeffrey Stern. And today, I had the real pleasure of speaking with David Sylvan, who is the president of Ventures, the innovation and commercialization division of University Hospitals here in Cleveland, A health system with 2 dozen hospitals, more than 50 health centers and outpatient facilities, and over 200 physician offices located throughout Sixteen counties. Ventures comprises a diverse array of professionals with deep domain expertise ranging from venture investing and company formation The human centered and experienced design as well as physicians, clinicians, and researchers who collectively seek to bring innovation to life In service of University Hospital's mission. Leading the organization, David gets a real breadth of exposure to entrepreneurship and entrepreneurship through a lens of the future of health care. Through my own company, through through actual, I've had the real privilege to see how David approaches this fascinating world of health care Innovation as he's invested in, advised, coached, and helped actual mature as a company over the last 3 years.

Jeffrey Stern [00:02:00]:

David comes to Ventures with more than 30 years of diverse corporate experience, most recently following a successful 15 year career in capital markets and investment banking, Where he led a derivatives trading and public finance investment banking platform. Prior to this, David spent 8 years in a variety of responsibilities at The sports marketing giant, IMG, and he started his career in public accounting with Deloitte in Johannesburg, South Africa. He is also an adjunct professor locally at Case Western Reserve University's Weatherhead School of Business and their Department of Design and Innovation. I really enjoyed pulling the curtain back here on the inner workings of hospital venture groups and the work David is focused on here at University Hospitals. Please enjoy my conversation with David Sylvan. So I've been, looking forward to this conversation. Perhaps of all the people I think that get suggested, to me to have them on the podcast, Your name is is often at the top of the list. And so, you know, several on my own volition, I've I've been looking forward to this kind of having the the opportunity to To work with you through my time at at Actual in collaboration with with Ventures and just, you know, seeing how you think.

Jeffrey Stern [00:03:17]:

But many others are excited to hear, Your story and how you think about things as well. So thank you, David, for for coming on.

David Sylvan (University Hospitals Ventures) [00:03:24]:

Pleasure is mine, Jeffrey. Thanks for having me.

Jeffrey Stern [00:03:27]:

So I'd love to you know, we'll we'll definitely get deep into Ventures and the the health care space and and and how, You know, you think about all those things. But I love to start more with your your personal journey and background, you know, your your path to To investing, your interest in entrepreneurship, and, you know, what how that all intersects with with Cleveland.

David Sylvan (University Hospitals Ventures) [00:03:48]:

Yeah. Well, the first thing I can promise you is that was not a linear path. Certainly wasn't a, an early career aspiration. I didn't, as an 8 year old think, you know, I really think Medtech investing is my, is my future, certainly, certainly far from it. I'm from South Africa. I I trained as a traditional accountants as a as a chartered accountant. I actually worked worked for a brief stint at, a predecessor to to Deloitte And truly, rarely was not having a wonderful time, Jeffrey. I just didn't feel like I was, realizing a passion from a career path perspective.

David Sylvan (University Hospitals Ventures) [00:04:28]:

And it was sorta hard for me to visualize that this was gonna be my next, 40 to 50 years. In fact, that gave me the shutters. And so I took the opportunity to, travel to New York City. I left South Africa. I had a lot of hope that, it was gonna be a mere trivial path for me to find, replacement employment in in in the United States, which is rarely to say that I'd done no research. I didn't understand the lay of the land, pun intended, with regard to what it might entail for a non US born, individual to seek and attain employment in the United States. And we were also going through a period in the in the late nineties of, of somewhat of a recession. I was pretty stubborn.

David Sylvan (University Hospitals Ventures) [00:05:20]:

I live with friends in the city. I believe that I should stay in the in the finance realm. And, eventually, all of that luck ran out. Fortunately, I did grow up in South Africa with, someone who'd become something called a sports agent. Didn't know what that was. And he worked for a company by the name of IMG. He'd never heard of them either. He reached out to me.

David Sylvan (University Hospitals Ventures) [00:05:43]:

I was in New York City. He indicated that there was the possibility of an opportunity in Cleveland. I reminded him that I was, I was a finance guy. I was an accounting guy, and I wanted to stay sort of in the realms of, of real estate. He reminded me that I was unemployed, and so I, got on a bus, took the bus to each East 12th Street, in Cleveland and, Began my career in Spoke's marketing with ING, which was incredible. Incredible company, incredible Cleveland story. It was Founded and and led by Mark McCormack out of Cleveland, Ohio, but with an international presence. Did that for close to a to a decade.

David Sylvan (University Hospitals Ventures) [00:06:23]:

Moved on then to, investment banking. I joined a broker dealer that KeyBanc Capital Markets had. When KeyBanc Capital Markets acquired McDonald and Company, it was really their 1st foray into being to offer synthetic financial instruments, so called derivative instruments. And, I did that for a number of years, traveled the country, helped to stand up and operationalize teams, in a variety of places, Did some fascinating things in a very complicated math based space, subsequently ended up leading a an investment banking team as well. And then around about 2013, had the opportunity to exit stage left and really think about what it is I wanted to do sort of as the as the as the 4th, perhaps, chapter from a career and professional development perspective. Began teaching at CASE, which I still do, teach in the business school at Weatherhead, love it. And, began some of my own, early stage investing, angel investing, and learned pretty quickly that The asset class of, of health care and, product and platform within life sciences, you really had to be immersed in the space in order to to understand more than just the underlying technology, but how it might integrate into workflows and and the consumer and patient experience, the provider and patient experience. I did some of my own consulting.

David Sylvan (University Hospitals Ventures) [00:07:48]:

One of my engagements was with university hospitals. This is about 7 years ago. What started as a, a very finite and, and specifically focused engagement turned into an actual opportunity. I was given a lot of latitude to help to visualize and, to to borrow a phrase from your current employer, to actualize an innovation platform for the hospital system. And we've subsequently morphed a number of times. With a lot of top down support and leadership support, we've managed to transition ourselves and and tool ourselves from a from a headcount and personnel perspective to really be an embedded venture capital platform whilst never losing sight of our roots from the perspective of more traditional innovation and then human centered design, which is the underpinning that runs through all of our work. So That's the career path. I I didn't think I was gonna be in Cleveland long, but then I met and married the girl, Jeffrey, which happens, and, you You know, I have 2 wonderful kids who have grown and, have left the house and, have been in Cleveland for a long time and, very passionate about what I do right now from a mission perspective And, a big fan of helping Cleveland to, be all that it can be from the perspective of, of, attractiveness.

David Sylvan (University Hospitals Ventures) [00:09:05]:

Well,

Jeffrey Stern [00:09:05]:

I had a lot of a lot of threads I I want to pull on there. But per perhaps As we make our way to University Hospital and the and the venture arm, how is it, I guess, getting into health care itself, Going down the the proverbial rabbit hole and, you know, getting up to speed on on just the industry as you started that, you know, Perhaps an initial consulting project. You know, did did you find that, you know, intellectually, from a curiosity perspective, it it resonated? You know, what what was it that, you You know, drew you to the space?

David Sylvan (University Hospitals Ventures) [00:09:43]:

Well, to be quite candid, it was it was pretty darn frustrating. I'd never come across a business model like that of health care coming from a for profit and and corporate space as well as dabbling from an angel investor perspective in a number of opportunities outside of health care, I didn't realize how convoluted health care was. I didn't realize how challenging it was to be in the business of of providing care. A lot of it is, is self imposed. We've we've created complexity. We've created redundancy. We've created inefficiencies. Some of that is is imposed upon us from a legislative perspective.

David Sylvan (University Hospitals Ventures) [00:10:23]:

Some of that is just legacy. And that all in and of itself creates opportunity. The the peep when people think about innovation in health care, they think about incredible surgical tools. They think about artificial intelligence. They I think about robotic process automation. Well, there's also the the the the underpinning to the business. There's revenue cycle. There's supply why chain.

David Sylvan (University Hospitals Ventures) [00:10:46]:

There are all of the elements that, obviously exist in all industries, but they are flavored by the idiosyncrasies of health care. And, You know, it it struck me that there was opportunity to impact people and patients and communities and populations, but also opportunities to impact efficiencies and, and and this convoluted business and to help to create ways in which we could, You know, impact outcomes but impact things like profitability and viability, etcetera. So I think it was dual fold. And, you know, the the mission aspect, the mission component was was very compelling and appealing to me.

Jeffrey Stern [00:11:24]:

So maybe now's a a good time to just talk about, you know, what University Hospitals Ventures is, you know, maybe some of the the history of it. I think we've covered your your path to it specifically, but just, you know, an overview of Ventures, how it works, the history, the goals, the vision, the strategy, just Just kinda setting the stage for for some other things we can talk about.

David Sylvan (University Hospitals Ventures) [00:11:46]:

Absolutely. And in some respects, we're not dissimilar from many of our counterparts and peers across the country. And in some in some respects, we we have some differentiators. The platform is ostensibly a path to sourcing sustainable alternate revenue streams for the hospital system. As health care continues to evolve and move from so called volume to value or fee for service to, actual, opportunities to impact outcomes on a macro basis, We realized that solely relying upon net patient revenue, to to underpin the financials, was probably gonna eventually create some some existential risks. And and it and it is for many of the systems that aren't in a position to, to engage with alternate, sustainable revenue opportunities. So we have a multifold focus. Very traditionally, we help as a research institution our own innovators, our own researchers, Clinicians as well as administrators, we help to give life to their innovations, to their ideas.

David Sylvan (University Hospitals Ventures) [00:12:56]:

The the best ideas are usually sourced at the coalface, the person, the individual, the team has the problem, and they begin to iterate and solve for that. Well, some of those elements that they're solving for are, of course, scalable because these problems exist everywhere. And it's our role to determine Which of those we could possibly take to the next phase with some resourcing, with some support, with some rigor and process, and, create a, a viable commercial opportunity out of those. But the same is true for the other side of the coin. We know we can't solve all of our own problems. And, we know that we need to be able to attract opportunities from outside of the outside of the city, outside of the region, outside of the country because many of the problems that we face are actually being solved elsewhere. And the speed to solution, speed to market would imply that we need to be receptive to opportunities that are not homegrown. And so, part of our platform focuses on the the sourcing of well defined unmet needs within our system, the the scouring of the the sort of known universe to find opportunities that might already be creating, solutions to those problems.

David Sylvan (University Hospitals Ventures) [00:14:10]:

And then doing some matchmaking, finding the right stakeholder, defining which of those opportunities are the ones where we'd like to formalize more of a a strategic relationship, and then helping with the structuring of things like proof of concepts or pilots or clinical trials, whilst while maintaining visibility from the perspective of investability. Is this an opportunity if we're able to influence outcomes, influence design, influence product development? Is this an opportunity that we would like to invest then. So there's a a little bit of a dual fold focus. By the same token, we need to keep, stoking the fires of innovation and entrepreneurship. So we're responsible for a lot of programming associated with, with those endeavors. We maintain very strong ecosystem relationships. And, Some of those are formal. Some of those are informal.

David Sylvan (University Hospitals Ventures) [00:15:02]:

And we we don't lose sight of the fact that we are responsible for, ensuring that Cleveland remains very viable when it comes to the attract the attracting innovation from outside, attracting, capital from outside. There's no reason, given all the critical mass that we have in the city, that we can't match wits with, many of our our, you know, partner cities both here in Ohio and elsewhere. And there's a lot of effort underway to to do that. And I'll just close this preamble, Jeffrey, with one of the primary differentiators for us as a as a sort of embedded Corporate venture capital and innovation platform is that we are also responsible for for certain operating lines of business. And these are, Core adjacencies like specialty pharmacy or home care or hospice or lab services, these are platforms that We can take advantage of from the perspective of business model development, recapitalization, perhaps, thinking about personnel adjustments and The on sell perhaps of, excess capacity or JV work, divestitures, etcetera. So It gives us a little bit more runway and leeway from the perspective of existing businesses already generating a bottom line that we can use to underwrite and support some of the more longer dated aspirational innovation, and investing, activities.

Jeffrey Stern [00:16:31]:

You you had mentioned that, you know, in some regards, there's a shared ethos, a shared approach with with other, you know, health system venture groups, And there's the some of the differentiators, that that you just mentioned. I guess when you think about both how you're you're spinning out, You know, internal development research from your own or organization, but also working to, you know, find the the innovation, in start ups externally. How do you think about, you know, is it competition with other health systems? Is it, you know, just when you just kind of a little bit at a at a macro level, the The landscape and and how that differentiation kinda manifests in in practice.

David Sylvan (University Hospitals Ventures) [00:17:13]:

Sure. Look. We're all trying to solve for the same things. We're all, at the end of the day, focused on the quality of outcomes for our own patient populations. And so to the extent that there isn't geographic competition, It makes infinite sense for us to be in loose alliances with other like minded, perhaps even like sized systems all looking to solve for the same things. And that creates opportunities within a, a closed circuit, within a safe zone For us, for example, to be able to show some of our spin out technologies to systems like us around the country and vice versa, I will tell you, I found that my counterparts and my peers across the country are extremely generous with their time, with their input, with their wisdom, with their surveillance and reconnaissance. And and we look to reciprocate. And that's really driven by this notion of, an acknowledgment that there are people at the end of the line that we're looking to to impact.

David Sylvan (University Hospitals Ventures) [00:18:11]:

Yes, of course, there's a financial component and and You have to keep the keep the lights on. But if philosophically or from an ethos perspective, we we don't lose Side of why we're doing what we're doing, I think there's plenty of room for collaboration across the country and across the world. And I'll tell you, even here in Cleveland, I have a wonderful working relationship with our friends at the Cleveland Clinic, at MetroHealth, at at the VA, we're responsible for our own city. And there are lots of things we could be, should be, and are beginning to do together, regardless of the the team jersey that we wear that will impact those patients and those populations. So there's a lot of open sore intellectual open source, if you will, Jeffrey, when it comes to these types of platforms and and, our equivalents at other systems across the country.

Jeffrey Stern [00:19:04]:

When when you think about the the the broader vision and goal for for your organization, how do you think about you know, you mentioned There's there's a lot of potential sources of, of innovation that that you're working with. How do you think about the actual, You know, maybe portfolio construction of of where those sources of innovation are coming from and how much resources you're gonna devote For internal development and spinouts versus external partnerships and start up investing versus, you know, areas of focus like, You know, patient experience improvements or more aligned with the work we're doing at ACTUAL, right, on the clinician utilization side?

David Sylvan (University Hospitals Ventures) [00:19:44]:

Yeah.

Jeffrey Stern [00:19:45]:

How do you just kind of like There there are so many areas that you could choose to focus

David Sylvan (University Hospitals Ventures) [00:19:49]:

on. Yep. That's, you're you're exactly right. If we didn't create guardrails or didn't create themes or or have strategic foci. We could we could spend all day just looking at things across the map and not getting much done. And so We choose periodically, whether that be quarterly or or or semiannually or annually, to align around certain strategic imperatives, Not to ignore, opportunities that might come over the the the proverbial wall that don't fit those specific themes. But In order to give ourselves focus, we align around a couple of 3, couple of 5, opportunity areas and look to specifically solve for those. That's that's more related to the outside in, Jeffrey, so that when we're sourcing for early stage companies, they're clumped around specific themes.

David Sylvan (University Hospitals Ventures) [00:20:40]:

That also helps you then, Attempt to get to best in class because then you're seeing, more than 1 of the same type, and you can begin to compare and contrast. We're a little less prescriptive when it comes to inside out because there are physicians and researchers, across the system, all with their dedicated, areas of expertise and domains, we can't stifle. We can't prescribe to them when they should bring us something. When something's ready, it it needs to come to us so that we can begin to wrap resource around it. So A lot more defined from an outside in, a lot more opportunistic, from an inside out. But we are doing a lot of work to democratize innovation from the inside We we we love the the prolific inventors who have a ton of research support in big departments or labs, and we love their output, certainly. But we also know that there are opportunities to be had if we look to our community or rural hospitals. If we look beyond, purely physicians and surgeons, and we look to clinicians and administrators and provide mechanisms for them to bring their inventions and innovations to us and almost create an incubation mechanism for them curated in order to help them get to some type of viability from the perspective of their of their inventions, their opportunities.

David Sylvan (University Hospitals Ventures) [00:22:03]:

Very few of them make it, and and we're not naive to that reality. But the effort that we put into to appropriately counseling and mentoring these internally sourced opportunities that don't come from The physicians and the surgeons is wonderful from the perspective of the culture that we're looking to to continue to to build and support here at the hospital. So we remain receptive and opportunistic, but we, from an outside in perspective, try to be Pretty, pretty rifle shot, with with the ability to sort of, midcourse steer adjust as circumstances change.

Jeffrey Stern [00:22:44]:

From the inside out perspective, one of the the things I've always been really curious about, I think both on the academic side and also on the Practitioner side is, you know, how would you go about trying to get, you know, more clinicians To pursue an entrepreneurial path, which is a hard thing, you know, off the bat given there's a clinician shortage that we're dealing with at a macro level in the 1st place. But From your perspective, you know, what where where does that bridge, you know, kind of come from and and how do you how do you try and facilitate that?

David Sylvan (University Hospitals Ventures) [00:23:17]:

Well, it starts philosophically. Are individuals commissioned to be innovative? And and, you know, you you've underscored a a workforce Resilience and shortage issue, and that is a material problem. But generally speaking, we want to put ourselves in a position where The system permissions inventors to have discretionary time in order to do this type of work. Difficult to do when there's, when there's a a patient population that needs to be served. So you have to be discreet about the process. You have to be realistic about the process. But we try to act as that enablement, both from the perspective of people resourcing as well as financial support. There's a lot of incentive for individuals to be innovative.

David Sylvan (University Hospitals Ventures) [00:24:04]:

If if, for example, we support an internally or homegrown opportunity and it becomes, it yields from the perspective of of, revenue or outcome. There's a very generous share, mechanism back to the inventor. That That in and of itself is not not usually the sole inducement for people to bring us opportunities. They are candidly caregivers, and they want to solve for a problem that they're experiencing with their own patient population or their own domain. But, this really starts with permissioning, with a a an organizational philosophy that that supports individuals and the time that they need to take in order to be, inventive and not merely sort of be tinkering around in the proverbial garage at to at 10 PM.

Jeffrey Stern [00:24:52]:

On the on the flip side of that coin, when you think about outside in opportunities, how do you go about sourcing them? Yep. You know, either Do do you approach that more like a traditional VC from that perspective? How do you weigh these different opportunities? Yeah. What what's some of the investment criteria you're you're thinking through?

David Sylvan (University Hospitals Ventures) [00:25:12]:

Yep. Absolutely. So we have some formal and some informal relationships. We we have a very Strong and long dated relationship with a, a venture capital and innovation platform out of Silicon Valley known as plug and play. They, for example, would be one of our 1st calls when we're looking to solve for a specific problem statement or or, domain, And they will begin to curate a list of opportunities that they have in their portfolio that they will put in front of us in a in an orchestrated manner for us to begin to make some selections. We, as a ventures platform, don't act unilaterally. We always bring the stakeholder, the The the individual, the peoples, the department with the problem to the table with us so that we can jointly adjudicate, the go, no go on various opportunities that we we see. And so we might consider 20, seriously consider 5 or Takes and only do something with 1 or 2, but the fact that we saw 20 in the 1st place through a formal sourcing relationship like that of plug and play helps us get to the the the quality quotient that we know we need to to attain.

David Sylvan (University Hospitals Ventures) [00:26:24]:

Some of these relationships are informal. They're with, they're with, Angel Networks, they're with law firms. They're with venture capital platforms who are incented to want to have their portfolio companies initiate a pilot or or commercial arrangement with a hospital system. So the the good news is There's no shortage of the ways in which we can source opportunities. We belong to something known as the Avia Network, for example, 60 of the largest health care systems in the Country with a very distinct digital focus. No shortage of opportunities. That's the good news. The bad news is there's no shortage of opportunity.

David Sylvan (University Hospitals Ventures) [00:27:02]:

So we have to be very clear with the manner in which we think about intake, the pace with which we get to a very quick note because that's as valuable to us as it is to the early stage company or the or the introducing entity. And it's always a no with a with a why. We never just, You know, you know, unilaterally walk away from something. There's always the the the feedback and the input that we give, which is of value to to both parties. And We value the experience of the entrepreneur or the early stage company as much as we value the experience of our own providers and, of course, our patients. And that helps us then with the the next iteration. The next time they come around with something, it's a it's it's a little bit more refined and defined based on feedback we've given. But we have an intake team that uses a a codified process, most of which was home built, that enables us to very quickly get to that next step disposition.

David Sylvan (University Hospitals Ventures) [00:28:02]:

Is it a perhaps? Is it a not yet? Is it needs more information? You know, is it a park, or is it an actual, you know, let's let's let's start to get serious from a, an engagement perspective? And and, The team is pretty adept at doing that.

Jeffrey Stern [00:28:17]:

I'll ask maybe a more selfish question, as someone, you know, building in the in the health care space, Which is a hard thing. It it's I, you know, I think building any any startup is a is a challenging thing. But I think there are some Particular aspects of of health care that that are challenging. And I you know, I'm not even sure if in in unique ways necessarily, but There's a lot of, you know, entrenched process. And as much as you mentioned already, as there's there's very apparent Opportunity and and room for improvement. There is, there's a and and by, I think, you know, from a a good place, A risk aversion. Right? The the way that that people have done things has worked historically and can be used as a justification for continuing to do things in in that same way. Right.

Jeffrey Stern [00:29:06]:

The if the process is working, you know, let's let's keep it that that way in in some capacity. What have you seen as The, like, highest signal characteristics of of companies, entrepreneurs who have who have, like, broken through in this space and gotten people to, You know, as an industry, as a health care organization, you know, change behavior, change the way that that they're doing things.

David Sylvan (University Hospitals Ventures) [00:29:29]:

Yeah. Yeah. Great, great question. I think the glacial pace with which health care makes decisions, that risk aversion that sort of, is the the consistent thread that runs through decisioning was upended by COVID, and I'll talk to that in a second. Secondly, This acknowledgment that we can now no longer treat you, Jeffrey, as a passenger and as a taker and recipient, But to treat you as a customer has also forced us to think about the pace at which we decision a little bit more quickly. But I'll start with COVID. We would traditionally take a year, 18 months, of consideration and iteration around an opportunity before it ever had the chance of going live in a proof of concept or pilot. But along came COVID and the the critical nature of Speed to care associated with with addressing the the the pandemic.

David Sylvan (University Hospitals Ventures) [00:30:26]:

And suddenly, we were standing up opportunities in literally days. And now we realize that breakneck speed brings with it inherent risk, and so we were very mindful of where we could move with that kind of pace and where we had to be a little bit more circumspect. But it did prove to us that We were our own self imposed hindrance. And if you can create a cadence and process With the nodes along the path that you need to address, IT, legal, compliance, risk, If you can create and forge those relationships where there's mutual intentionality around coming to an agreement in, an an a pro in an appropriately rapid, elapse of time, we realized we could do things a lot, lot quicker. And and, You know, we're working hard right now to make sure that the pendulum doesn't mean we're the all the way back to the old way of doing things. You know, it's hard to wanna push back on the risk quotient because do no harm and those implications are sacrosanct to to the delivery of care. But there are areas where we know that that, those impositions are perhaps a little bit more rigorous than they would need to be. And so we we we work with our stakeholders internally to to to to massage the process in a little bit more of a, you know, speed of business versus speed of health care care manner.

David Sylvan (University Hospitals Ventures) [00:31:55]:

It's an art. It's not a science. And, you know, you have to pick your battles. And, it's for that reason that we focus A fair amount of attention on opportunities that don't necessarily apply, require a very rigorous FDA approval path, pathway. Those business tools, for example, are very exciting if they can create efficiencies and outcomes without there being any clinical implication. We're not afraid of, the the opportunities that do imply a lot more, scrutiny from the perspective of of process and approval and, and and and regulatory oversight, you have to create a balanced portfolio. And I think, you know, we're very sensitive to concentration risk when it comes to our portfolio build. We do want those things that are a little bit riskier and have perhaps more runway, but perhaps have, You know, larger potential outcomes, but you've gotta balance that with things that can can get into the hands of the users and begin to have an impact in a little bit more of a of an expedited manner.

Jeffrey Stern [00:32:58]:

I wanna maybe go a little deeper on the the COVID thread, but not not necessarily just COVID. But I I think, You know, as as a mechanism for for change and opportunities that that you see going forward, What do you find to be the biggest, you know, risks, headwinds to maybe not just Even university hospitals, but but healthcare organizations at large at a macro level. And, you know, with that, what what has you maybe most excited about Areas for for innovation.

David Sylvan (University Hospitals Ventures) [00:33:34]:

Yeah. A couple of things. And you you sort of alluded to it earlier. There is a massive workforce resiliency challenge that we're facing. What the pandemic did underscore and did highlight, and amplify for all of us Was the challenge faced by physicians, by clinicians, nurses specifically when it comes to to bedside care and the and the The ability to most appropriately care for patients and and give them the the the time and attention needed in a in a pressure cooker type environment. And so the shortages that we're now all experiencing nationally are a function of that resilience, and that burnout, that was that was initiated throughout the pandemic. How do we solve for some of those things? Well, You know, in in a simplistic sense, people would say, well, you know, just pay people more. Well, you and I both know that that is not a panacea for for anything.

David Sylvan (University Hospitals Ventures) [00:34:32]:

Well, why don't you just change the, you know, working conditions and the working environment? Well, that's the long game. You can't do that on a dime either. And so, it's important for us But think about how might we, for example, using technology enablement, or using a a a different modality of of put and and access. How might we alleviate some of those people bottlenecks, and put people in a position where They're they're focusing specifically on, their day job, their top of license, and alleviating some of the, administrative for example. So we're trying to chip away the edges with technology enablement, with some process redesign, But the this is going to be a a perennial challenge, and this is the long game for, for all of us.

Jeffrey Stern [00:35:24]:

When you kind of gauge those challenges, do you feel a sense of optimism? Does it keep you up at night? Like, what what are the When you think about the different challenges, which are the ones that, have you most concerned?

David Sylvan (University Hospitals Ventures) [00:35:38]:

You know, the the reality for not for profit health care, is is our meager margins. You know? We we we we do live on a, a a small bottom line by the very nature of the business that we're in. So one of the concerns is always gonna be, you know, headwinds from the perspective of revenue. Are we covering our basis from the standpoint of generating enough income appropriately in order to to to keep the operation viable. To the extent that there are bottlenecks with throughput and to the extent that there are resource constraints when it comes to headcount, That exacerbates those those headwinds. So that is an area and a cause for concern. But the pace with which we're witnessing innovation, innovative business models, technology enablement that I mentioned earlier, inventions around disease state management and cures. All of that, of course, is cause for optimism.

David Sylvan (University Hospitals Ventures) [00:36:39]:

We have to weather the early storms, but we have to stick at it. And we have to, ensure that we don't lose sight of, the long game, notwithstanding the immediacy of some of the short term challenges. It's not to say that I just firmly believe that this too will pass, but candidly, Jeffrey, this too will pass. You know, we as we begin to to knock down one Then after the next, we put ourselves in a position where we begin to to self cure. And I think most forward thinking, innovative health care Systems are on the same boat.

Jeffrey Stern [00:37:13]:

On on the the the threat of optimism, we had, you know, Eugene Malinski on on the podcast a Few weeks ago, you know, kind of relayed the the story of Lazarite and and the work that he's doing there. And it's It's incredibly inspiring, and instills a lot of optimism in in me personally. And I I'd love to get from your Effective having kind of this bird's eye view of, obviously, Eugene and the work he's doing, but, you know, of so many different entrepreneurs, Both internally, externally, who are are working on on really impactful opportunities. You know, Just kind of taking stock of of of the portfolio and the companies that you get to work with. You maybe paint a picture of of some of your favorites.

David Sylvan (University Hospitals Ventures) [00:38:00]:

Sure. Sure. And Eugene is, Eugene and Lazarite is a probably a great metaphor, Jeffrey, for the types of companies that we like to work for, including, candidly, your your own, the company that you're that you're currently with. One of the gems when it comes to the identification of who you wanna sort of partnered with a long a long term basis is this notion of of coachability. Does the does the entrepreneur, the founder, the inventor, Are they receptive to feedback and input that helps them, continue to iterate in a positive manner around their inventions? And certainly to the extent that the there is very direct patient implications associated with these with these companies, like the Lazarites, like the tools like the vicarious surgicals and the Renalysis, and I could go on. The the common thread between all of them is we're going to improve patient patient outcomes, but But we're gonna do so from the perspective of, design, learn, and iterate in a real time time setting. What we love about some of these technologies is not necessarily the the initial use case. That's obviously important.

David Sylvan (University Hospitals Ventures) [00:39:06]:

That's the foot in the door. That's the, That's the initial value prop that you have to validate against in order to determine there's a there or there. But when you can make an identification that there are going to be Other use cases and a broadened scope of offering down the road just by virtue of company development, that gets us very excited. Yes. Lazaright has this incredible wireless arthroscope tool, but they actually have an incredible light source technology. And we think that the White source technology has application across a number of of of use cases, some some being contemplated, some not yet thought of. In the case of your company, you know, Jeffrey, you know, speed to clinician, care via accelerated credentialing. Incredible.

David Sylvan (University Hospitals Ventures) [00:39:56]:

Wonderful. That's that's that was the use case that opened the door. But the power of the data and the workforce intelligence that you're gonna create In your sort of v twos, v threes, v fours of your company's evolution, that gets us very excited. And I could continue with with every one of our portfolio companies. That knock on, that next phase, that next gen of of product development is is really what keeps us, very engaged and, and very focused on partnering with and helping the company get to those those those next endpoints.

Jeffrey Stern [00:40:33]:

Of the companies that you're working with in a scenario where Where they are successful at that nth degree, not not maybe in the 1st pass. But I'm curious, you know, which of those represents the most drastic Change in, you know, the way health care works. Right? If if one of these companies is really successful, I'm curious just, you know, From

David Sylvan (University Hospitals Ventures) [00:40:57]:

a a

Jeffrey Stern [00:40:57]:

real future, you know, vision perspective, what are what are some of those companies? What are the problems that they're working on? And and how is health care different if they If they realize their vision.

David Sylvan (University Hospitals Ventures) [00:41:07]:

Well, there's for example, I'll just give you a domain as an example. We we, unfortunately, in this region live in an epicenter from the perspective of the opioid crisis. We're increasingly seeing opportunities technology wise with so called prescribed digital therapeutics. How can we intervene in these patients' lives from the perspective of bringing about healing, bringing about CUREs bringing about, a a a a amelioration of of of their challenges without molecules, without pharmacology. And so there's a massively growing field around the notion of Prescribe Digital Therapeutics. These are tools and technologies that are the the delivery modality is candidly your cell phone or your laptop. But from an efficacy perspective, they're having similar, same, or better results compared to drugs without any of the side effects, the addiction implications, and the long term harm that is, is brought about through through abuse, and we're all familiar with all of those. That is just one example that, for example, we find very, very exciting.

David Sylvan (University Hospitals Ventures) [00:42:20]:

We also know that the the the pandemic brought about A different scrutiny when it came to digital tethering and telehealth and remote care and, you know, the resurgence of healing and hospital at home. We're not going back on any of those things. We we we're gonna continue to lean into those opportunities because they will be transformative for for health care. You know, we have the strange business model, Jeffrey, as you know. We we do better when you actually don't come and see us. And so, a little bit antithetical, but how can we create, opportunities to to, bring healing and and and hope to people without forcing them to actually enter our bricks and mortar domain. So those are just a couple of examples of the things that we think will, disrupt and transform permanently the current way in which we, we deliver care.

Jeffrey Stern [00:43:10]:

You you mentioned maybe the the counterintuitive Nature there of, you know, of the likelihood, the proclivity that you will do better when when folks are not coming to you. What what do you find to be, like, the biggest misconceptions that that people have about maybe health care at large, but also, you know, then more specifically the, You know, what it is that that that you're doing and and the nature of your work.

David Sylvan (University Hospitals Ventures) [00:43:34]:

Yeah. I think one of the biggest misconceptions is the longer the patient's in the hospital, the better the the hospital's doing from perspective of, you know, the revenue generated by that patient's presence. And, of course, we know that's not true. The the business model of health care requires reimbursements, and, There are caps and limitations on the extent to which we we can generate a return and and an appropriate compensation for the delivery of that of that care. So a lot of what we try to do is to impact those critical nodes along the journey or the path of the patients. Our innovation group does look very, very, very, closely at the notions of access and length of stay and readmission, though those are areas that you can begin to solve for that, don't necessarily have to do with the, the delivery of of care, but our process issues. Their their their logistics implications. They're Mechanistic from the perspective of, how we can intervene along those different nodes.

David Sylvan (University Hospitals Ventures) [00:44:43]:

So A true understanding of the journey of that patient throughout their life cycle from a, a sensitive and and and inquisitive perspective is helping us to impact those nodes along that patient's journey. As you then impact the the, implications of things like readmissions or length of Stays or no shows or access, you know, none of those are technical from the perspective of of, physicians' Delivery of care, they process steps, and we focus a lot of attention on that.

Jeffrey Stern [00:45:16]:

When you think about innovation, do You think about the levers that come outside of entrepreneurship and entrepreneurship. And I guess, like, what I mean by that specifically is, you know, how How much ameliorating impact is there to be had from rethinking the legislative side of this? Right? Like, the legislative framework that health care exists within, the regulatory side of it, you know, where maybe it's not innovation from a perspective of creating something new, but it's It's addressing the environment in in which we are operating.

David Sylvan (University Hospitals Ventures) [00:45:49]:

Yeah. There you know, there's a tremendous machine around how we appropriately inform legislation equation because that, of course, impacts the manner in which, you know, health care systems, keep the lights on, you know, by virtue of being reimbursed for for for various offerings. And that is a process. There's a lot of education that goes into ensuring that the the people making the decisions from a legislative perspective understand the the the pain points, the path and and and the journey. So there is a lot of lift to still be had from that perspective, and it's, it's it's not, It's not signing legislation and sitting back and letting it play out. It's it it needs to remain fluid and needs to to evolve. An example would be what we're doing in terms of hospital at home and and and some of the remote monitoring and telehealth implications. The the the manner in which we are reimbursed for some of those offerings is not yet permanently codified.

David Sylvan (University Hospitals Ventures) [00:46:48]:

And so we have to make sure that we influence that from a legislative perspective to ensure that doing the right thing for the patient in a time and place where it is most applicable to the patient's needs is going to be a compensated, activity. Otherwise, we're gonna revert back to the way in which We did things beforehand. And, of course, that'll have its own mark on implications with regard to the patient's experience, certainly access and then by definition, outcomes.

Jeffrey Stern [00:47:18]:

As you reflect on on your journey, so far with Ventures, What has surprised you most about the experience? What, what are some of the the lessons learned?

David Sylvan (University Hospitals Ventures) [00:47:27]:

Yeah. You know, I think the lesson learned for me was, I approached this initially as an intriguing intellectual opportunity and a chance to have some fun and to consistently learn from from incredibly brilliant people, you know, with whom I'm fortunate to be surrounded by every day. What I didn't factor in, what I had an underappreciation of, Jeffrey, was that I would actually fall in over the mission, that that I would Finally, find a reason why I needed to quell my frustration. And and if, if I couldn't nuance it, use blunt force to try get to solutions because there is a person at the end of the line. And What struck me, of course, was that was exactly the reason why I was surrounded by everyone I I am, within the health care setting. No one joins this industry because they think it's going to be fun. You obviously want to have some fun. But the mission components, that that Ability to be a caregiver and a healer even if you're not a clinician, is incredibly powerful.

David Sylvan (University Hospitals Ventures) [00:48:35]:

And I think that was the largest revelation for me very early on in this journey. And it's, it's, it's stuck with me ever since. Mhmm.

Jeffrey Stern [00:48:44]:

Yeah. No. It it's, it's certainly, I think, What resonates with a lot of folks at at my own company and and certainly most of the entrepreneurs I know working working in this space. I'll bookend the the conversation here with our typical closing question, which we we ask everyone who comes on the show, bringing it back to Cleveland, Which is, you know, not necessarily for your favorite thing in Cleveland, but for something that other folks may not know about, A hidden gem, if you will.

David Sylvan (University Hospitals Ventures) [00:49:15]:

You know, for me, it's I hope it's not hidden, because it's in plain sight. But I I think that We offer, via the Metropark system, something that is incredibly unique. And I increasingly Need tree therapy every weekend, and there is an endless opportunity for me to, spend time in the in the, Emerald belt, I think, or the emerald necklace, I think it's called, Jeffrey. So it's not a hidden gem, but I I don't know that enough people take sufficient advantage of this offering that's, right on our on our doorstep almost regardless of where you live. And, the the the the diversity and the variety associated with the the various metro park systems, how they're chained together up to and including, the lake. I think it's just a wonderful aspect of the city that, that I I certainly Take advantage of it and look forward to, every, you know, every weekend.

Jeffrey Stern [00:50:17]:

Yeah. It it is a special place. That's for sure. Well, David, I really appreciate, your time for for you coming on and and sharing your perspective on on all the work that that you are doing. So thank you very much for for coming on.

David Sylvan (University Hospitals Ventures) [00:50:30]:

Thank you for having me. It's been my pleasure.

Jeffrey Stern [00:50:32]:

If folks had anything that they wanted to follow-up with you about, What would be the the best way for them to to do so?

David Sylvan (University Hospitals Ventures) [00:50:39]:

You know, I think a couple of ways. We have a, an intake portal via our website, ventures. Uhhospitals.org. There is an intake portal, or an idea submission portal on that page. We're very active on LinkedIn. I think that would be another opportunity for, someone to either reach me personally or reach our platform more generally speaking. So those will be the 2 modalities.

Jeffrey Stern [00:51:07]:

Awesome. Well, thank you again, David. Really appreciate Good.

David Sylvan (University Hospitals Ventures) [00:51:10]:

Thank you, Jeffrey.

Jeffrey Stern [00:51:12]:

That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if If you have any feedback, please send over an email to jeffrey@layoftheland.fm or find us on Twitter at podlayofthelandor@sternjefe, j e f e. If you or someone you know would make a good guess for our show, please reach out as well and let us know. And if you enjoy the podcast, please subscribe and leave a review or on your preferred podcast player. Your support goes a long way to help us spread the word and continue to bring the Cleveland founders and builders we love having On the show, we'll be back here next week at the same time to map more of the land.