HLTH23: Sutter Health unveils San Francisco-based innovation center, calls for startup, VC collaborators

Sutter Health announced Tuesday plans to build a dedicated innovation center in San Francisco that the system will use for the development of novel healthcare technologies and services.

The upcoming center will become the base of operations of Sutter’s in-house innovation team as well as a hub for collaboration with the organization’s physicians, co-workers, students and outside technology partners, according to the announcement.  

Taking advantage of its proximity to Northern California’s tech and venture capital ecosystems, Sutter said it plans for the innovation center to invest and partner with venture firms and early-stage digital health startups alike.

“Together with innovation industry leaders, we are charting a new course to revolutionize the way care is delivered,” Sutter Health President and CEO Warner Thomas said in the announcement. “Whether it’s in how we manage chronic diseases or provide care at home, our commitment to pushing the boundaries of what's possible in healthcare has never been stronger. We want the work done here to have a ripple effect, transforming the entire healthcare ecosystem by benefiting both clinicians and patients.

“We invite visionaries who share our passion for innovation and improving the lives of patients to join us on this journey,” Thomas said.

Sutter said its new center will be open to partnerships almost anywhere in their development, from the earliest stages of ideation to scaling for broader use.

The center and the system will be able to help partners prototype, test and deploy their projects in real-world healthcare environments. The California system sees more than 3 million patients of various demographics who live in geographically diverse regions—a “microcosm of the nation” that Sutter suggested will be beneficial to its future partners.  

“Sutter’s history is etched with groundbreaking innovations and partnerships that have elevated the patient experience,” Chris Waugh, Sutter’s vice president and chief innovation officer, who has been among the heads of the system’s innovation team, said in the announcement. “With the innovation center, we’re propelling our mission to new heights—igniting innovation through an unapologetically human-centric lens and ensuring a dynamic transformation that enhances the experience for both patients and providers alike.”

The Sacramento-based, 23-hospital system said it is still finalizing a location within San Francisco for the center but plans to be “up and running by early 2024.”

The organization said its planned center builds on prior efforts like the Innovation Hatchery incubator. It could support future healthcare tools like Scout by Sutter Health, an app launched in 2021 to support resilience and everyday mental health management for those between 13 and 22 years of age.

Sutter said the center will also support ongoing arrangements the system has with tech partners. The announcement highlighted Ferrum Health, an AI-powered platform to support reading radiologists, that launched in the summer of 2019.

“Our partnership with Sutter has played an instrumental role where our technology provides a positive and lasting impact on the lives of patients across Northern California,” Pelu Tran, CEO of Ferrum Health, said in a statement provided by Sutter. “We’re excited to deepen our collaboration with Sutter through the launch of the innovation center that will help reimagine the future of healthcare within and beyond California.”

Sutter Health is among California’s largest health systems, having reported nearly $15 billion in total operating revenues across 2022. Though it logged a $249 million loss for that year, the nonprofit has so far turned its finances around with $463 million of income and a positive operating margin as of 2023’s halfway point.