Rae Woods (00:10): From Advisory Board, we are bringing you a Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae. (00:22): The term partnerships in healthcare can sometimes feel like a bit of a black box or maybe even a bit of a throwaway. We've talked about these before on Radio Advisory. In early 2023, we talked about vendor provider partnerships and why so many of them fail. A few months later, we spoke with Optum and John Muir to talk about a large scale partnership, what it looks like and what it takes for each organization to actually make that kind of marriage work. Today I want to talk about a very different kind of partnership, one between life sciences organizations and health systems. (01:00): I'll be honest, I don't know a lot about these kinds of partnerships. I know that they exist, but I'm not sure I can define what they actually look like. In fact, I'm not sure I can define what each party is actually getting out of that partnership, whether they're merely half of a transaction or in a long-term relationship. That's why in this episode I've invited advisory board expert Fanta Cherif to explore the current state of health system and life sciences partnership. She's going to tell us what's in it for each of them and how life sciences and health systems can make the most out of a new kind of partnership. Fanta, welcome back to Radio Advisory. Fanta Cherif (01:41): Thanks for having me. Rae Woods (01:43): Fanta, I don't want to be a skeptic from the very start of our conversation, but I do know that you've spent the last few months researching what it means for life sciences companies and health systems to partner with one another. I have to ask, at a high level, why is this problem important? There's so much going on in healthcare and healthcare business. Why are these partnerships so important in today's environment? Fanta Cherif (02:07): There are many different angles as to why it's really important, but we're getting a real big sense of urgency. And what we're realizing here is that partnerships can really be a lifeline for health systems and hospitals as they are navigating a very challenging environment, whether that's just having access to innovative drugs, having access to innovative tech, whether that's navigating their supply chain, it's really important. (02:30): But then on the flip side of that, we're also hearing a sense of urgency from our life sciences members because they can also feel this shift where they now are working towards strategic longer term partnerships and are feeling them just be increasingly important, but at the same time, they're realizing that with that shift comes new challenges. First being generally that health systems can be kind of hard to engage with. Rae Woods (02:54): No, never. Fanta Cherif (02:58): As they're just facing a myriad of challenges, so of course shrinking margins, overworked employees, lack of capacity, et cetera. Secondly, I think it's really important to note here that hospitals have been in this circle of engaging solely with life sciences members just based on product payment relationships, and so thinking through how we can break through that envelope to really move the needle here as it relates to longer-term strategic partnerships. Rae Woods (03:25): Really quickly, I'm guessing listeners are hearing life sciences organizations, which you work with every day, it's actually represents a pretty huge umbrella. What are we talking about when we talk about life sciences orgs? Fanta Cherif (03:39): We are talking about MedTech, MedDevice as well as pharma. Rae Woods (03:43): And it sounds like they understand the struggles that hospitals and health systems are in right now, but are saying, "Hey, we can help you if we actually work together." Fanta Cherif (03:57): Correct. Rae Woods (03:59): I'm just going to continue with my skeptic train for a minute. The term partnership gets thrown around a lot in business. Fanta Cherif (04:05): It does. Rae Woods (04:06): I get the sense that partnership means something different depending on what stakeholder in the industry you're talking about, in this case, health system or life sciences or even if you look organization to organization or folks on one side of the contract might not agree with what partnership looks like on the other end. How does this actually manifest today? What is the current state of hospital life sciences partnerships? Fanta Cherif (04:30): There is a ton of confusion around what is a partnership, and I feel like that ambiguity and that confusion has really led to a oversimplification, if you will, of what the actual problem is here. And so we're finding that our members are demonizing the transactional relationship while simultaneously idolizing the executive level system-wide strategic partnerships. And the way that is manifesting and just how it's problematic is that we can't necessarily dichotomize partnerships and really need to think through partnership as more of a continuum or along a spectrum because dichotomizing that really has our members engaging with partnership in more of an either or category where it's either strategic or it's either transactional. There's sort of nothing in the middle. (05:12): Where, in reality, there are a slate of different types of partnerships at varying different levels that could more effectively achieve their goals. And so what we're hearing is when life sciences say partnership, their minds are automatically going to these very large scale partnerships with very large IDNs or AMCs. So we can think through partnerships with the Cleveland Clinics, the NYUs, the Geisingers, the MGHs, and then when health systems are thinking about it, they assume that folks are just generally talking about these multi-year, very long-term partnerships, and so that's one end. Or they assume that partnerships are a very transactional relationship that helps them get the lowest price on whatever product that a life science member is offering them. Rae Woods (05:57): That's where I thought you were going to go. I thought you were going to go straight to the vendor relationship, which we've talked about on Radio Advisory before as being a problem. I think I'm having an "aha" moment though as you're talking. You are not saying that having a vendor based, transactional based relationship is a problem. Fanta Cherif (06:17): Correct. Rae Woods (06:17): You're saying the problem is we default to either end of the spectrum, either purely transactional or full scale, big picture partnership. Is that right? Fanta Cherif (06:31): Yeah, and I want to say personally they are not a problem. There's nothing wrong with having a simple transactional relationship. Rae Woods (06:37): Why is that not a problem? Because I would've thought you were going to tell me, "We have to move from this vendor relationship towards deeper relationships." Why is it okay to be there? Fanta Cherif (06:48): Honestly, I think it's because each partnership level offers its own unique advantages. Of course, there are more cost-effective partnerships that require more a strictly transactional relationship. I think it becomes a problem when you are only looking at one of two extremes, rather than really looking at what each partnership can offer you dependent on your goals. Rae Woods (07:09): It sounds like the right answer is finding the right kind of partnership, and it also sounds like there are more options than either health systems or life sciences companies realize. What is the middle ground that perhaps the industry is overlooking? Fanta Cherif (07:26): The way we mapped our partnership landscape is through four levels. So obviously there are the transactional partnerships. These are shorter term, typically one to three years strictly by contract purchase order base. There's no shared goal setting or decision making there. Really all of the value is coming directly from the product and the cost of the product. Rae Woods (07:46): Yes. Fanta Cherif (07:46): We've heard really good examples there, and so I don't ever want to take away from what a transactional relationship can do because we know that there are benefits as it relates to having uncontested vendor position through supplier advantage and things of that sort. Rae Woods (07:59): And like you said, the vendor relationship isn't inherently wrong as long as that vendor relationship is clearly outlined, both parties agree and so on. Fanta Cherif (08:07): Correct. Where we're introducing new levels of partnership is really in the middle, and so we're thinking through physician level multi-project partnerships, and these look like partnerships that are generally led by service line leaders. They involve multiple research products. Some of them also span across different service lines. They are more medium term, so really thinking through three to five years versus that immediate 10 plus year partnership and they're really focused on product development, application of new technology, things of that sort, really being able to enhance both patient care as well as just condition engagement. (08:41): And then a level below that is where we look at more of a single project physician led partnerships, and these look a lot of the times like just pilots or introductory research. They are shorter term, lower stakes, but they also just help promote transparency. These partnerships really enable more of that data sharing that life science members are looking for, as well as just being able to improve patient management and look through patient care pathways as well. Rae Woods (09:06): So it sounds like the things that make this middle ground partnership different from the extreme ends of the spectrum is that they're at the physician level and it's physician level either focusing on single projects, maybe even those pilots or multiple projects, but they're really physician-led. Is that what makes this middle ground different? Fanta Cherif (09:27): Correct. I would say level of executive involvement, but as well as scope. So as I mentioned before, really thinking through more of those medium-term projects rather than just a year-by-year contract where you're just negotiating on a price of a product or that 10-year, five-year partnership really thinking through, "What can we get done that's in the middle ground and is still advantageous?" Rae Woods (09:47): Whenever we talk about partners, we have to be really honest about the fact that each side of the coin wants to get something out of this. And from the life sciences perspective, I have to imagine that they're really interested in working with some of the names that you already rattled off, Fanta. These are names that every single listener of radio advisory knows. They know Cleveland Clinic and Geisinger and MGH. Is the value for life sciences companies really to work with these prestige IDNs and AMCs, or am I missing something that's in it for the life sciences companies? Fanta Cherif (10:21): I will say there's value in working with those bigger systems, but those missed opportunities, really being able to expand your denominator to look at smaller and more standalone hospitals because that is where you're going to have your competitive edge. You're going to be able to tap into underutilized opportunities. You're also going to be able to be a first mover in a lot of those scenarios, and so less of the status quo and really thinking through how you can really differentiate yourself as you're thinking through your competitors. Rae Woods (10:48): Let's then flip to the other side of the relationship. I have to think that the providers who are listening to this podcast are going, "Okay, but what's really in it for me?" Why should they be interested in crafting better partnerships with life sciences companies? Fanta Cherif (11:02): Well, so for one, I think for smaller organizations, as I mentioned, access is a huge thing. And so these hospitals are going to gain very competitive and cutting edge technologies. They're going to be able to tap into underutilized data analytics, and they're also going to have access to more treatment. Other than being able to negotiate some of the prices for some of these products, they're also going to be able to really enhance the quality of care that they're able to provide to their patients. Rae Woods (11:30): This is such a good point because I started off this conversation not wholly convinced why the partnership problem was one that should be front of mind for at least providers because we know that they're in such a fragile state, or we know that many health systems are in such a fragile state. They're redefining their growth paths, their margin is on a razor razor edge, but what you are saying is especially for that community hospital, they can get access to data, maybe they can get access to better medical devices, better diagnostics, better drugs, et cetera, et cetera, by doing these partnerships which they wouldn't have had available to them given the strain on their finances. Have I got that right? Fanta Cherif (12:10): Correct. I also think there is benefit though, and I don't want to understate this at all. Even for larger organizations who are kind of already there, the benefits there are still substantial as they are trying to really maximize their investments. A lot of these systems are looking through investments in AI, personalized medicine, et cetera. And those relationships with life sciences are what is actually going to be the differentiator there. Those relationships are really crucial for moving the needle. Rae Woods (12:37): I'm trying to put this conversation in context of the here and the now and literally as we speak, our listeners, our members are dealing with a lot of the changes coming out of the Trump administration. It's early, and I want to admit that things are moving incredibly quickly, but at the time that we are having this conversation, the Trump administration is targeting scientific funding. We're seeing workforce reductions in the NIH, the CDC, data being taken down from websites and frankly funding being blocked for research if they have language that has been newly deemed as red flag language. I'm wondering if that creates more urgency or maybe more opportunity for health system life sciences partnerships. Fanta Cherif (13:27): I think it does. I think life sciences really have an opportunity here to step in and help organizations really do this research because they're private. Something that we also heard a ton within our research, just the interviews that we did, was that in 2020 there was a huge boom of innovation offices, a huge boom in dedicated personnel titles such as chief innovation officers, and now we're in 2025, and we're hearing that all of that has dwindled down. Health systems don't even have a strategy as they're thinking through how to navigate all of the innovations on the market. And so life science organizations can really step in for these folks and make sure that health systems have a way to strategize and really think through how they can be approaching this new era of innovation. Rae Woods (14:07): I'm hearing three newer opportunities for life sciences. First, it's to help health systems speak the language of what innovation even means and looks like today. Second is to step in knowing that perhaps there's not a chief innovation officer anymore to shepherd the strategy through. And then third, and I'm mostly talking to those AMCs here, is to help step in and help with some of the research that may have suddenly lost funding over just these first few weeks of the Trump administration. Fanta Cherif (14:38): Yep, a hundred percent. While there are challenges, there are so many more opportunities for life sciences to really move in and be that collaborative partner with health systems. Rae Woods (16:17): Do you have an example you can share with me of what a good health system life sciences partnership actually looks like in a way that is mutually beneficial for both parties and that fits this middle ground of not transactional, not full-blown partnership? Fanta Cherif (16:34): Within our research stream, we ended up surfacing a case study from Astellas and they are a pharmaceutical company. They really wanted to pilot a research stream, and so they looked at a small system. So instead of taking the typical status quo approach of partnering with a large IDN, they decided to scope down and just take a targeted approach and ended up working with Desert Oasis really to solve and just answer very specific research questions. (17:01): And by collaborating a little bit more closely, they were able to build trust. They were able to gather some of that very critical data, and they were able to demonstrate value in a way that laid the foundation for longer and just larger partnerships down the line. And what made it really interesting is that while they also benefited from getting their research questions answered, on the flip side of that Desert Oasis was also able to get that data as well, give their patients the product, as well as just improve remote patient monitoring for them as well. Rae Woods (17:31): How did they even come to this decision? I really mean no shade here. I don't think I've ever heard of Desert Oasis. So not only is it not a name brand like Cleveland Clinic, how did the life sciences company, Astellas in this case, decide that Desert Oasis was the right provider to work with? Fanta Cherif (17:49): So for one, I will say they looked under the surface as it relates to identifying a partner. They didn't look at just growth factors or patient volume or AMC or reputation. They really looked at more specific patient demographic characteristics. They wanted to also make sure that they were partnering with a smaller system that still had clinical capabilities as well as just a system that they could more easily integrate tech into. Rae Woods (18:13): So that's how one pharmaceutical company approached this kind of new way of partnering in this middle ground. How can our listeners figure out what is the right kind of partnership to pursue, especially because the problem here is that we're just defaulting to the same old kinds of partnerships rather than finding the right kind of life sciences health system partnership. How would one of our listeners do that? Fanta Cherif (18:42): It's not always one way or the other, I think for life sciences to do this well, you have to really think through what is a balanced offering that's still going to be able to meet your goals? So really thinking through what are your priorities? How are your partners going to solve some of those challenges? And really thinking through less of a one size fits all approach, but more of a niche targeted approach to figure out what's the right level of engagement? Do you want it to be clinician led? You don't also have to start big. (19:09): I think that last case study really highlighted that sometimes just being able to prove value at a smaller scale can really help you unlock broader potential and broader collaborations down the line. But one thing I will say is that no matter where you start, no matter where your goals are, it's important to really call out here that the onus is on life sciences to really set the stage here as health systems are navigating that very difficult environment. Rae Woods (19:34): And it sounds like it's on them to not default to the name brand organization. And to take the time to say, "Who are the physician leaders and physician champions that I can be working with whose parent organization might need some of this help and might be excited by access to data and technology?" And find those opportunities, even if it's a health system that they hadn't previously heard of like I hadn't heard of Desert Oasis before. If that's the case, what steps do you want our life sciences listeners to actually take away from this conversation so that they can lead the charge and craft better partnerships with health systems? Fanta Cherif (20:15): For one, I think something that is a huge factor, but I think is undervalued, is thinking through how to build trust to undergo and overcome some of the more legacy biases. Especially as we're thinking through how health systems view pharma, I think it's really important to say here, maybe you start with a smaller partnership. Maybe you just work on getting your foot in the door to build a foundation for that trust long term. I also think it's really important to keep in mind what it looks like for shared decision-making, shared goal setting, having the effective feedback mechanisms as well as just mutual respect for your counterpart. Rae Woods (20:53): And perhaps recognizing that there might be a new opportunity now to build that trust because health systems, especially AMCs, are losing access to funding and data that they thought that they could have at the beginning of 2025. Fanta Cherif (21:07): And they need the help not just clinically, but also operationally. Rae Woods (21:11): If it's really important for life sciences companies to lead the charge in these new kinds of partnerships, do you have an example of one that's led in a way that exemplifies what we want life sciences to do? Fanta Cherif (21:23): Yeah, so I was really excited about this case study. So we heard that Medacta, which is a med device company, really faced a challenge building a more strategic partnership with the health system. They really wanted to grow their volumes. And so what they ended up doing was partnering with Geisinger by offering an outcomes-based guarantee for shoulder surgery using their implant. And this is a lifetime guarantee. Rae Woods (21:45): Wow. Fanta Cherif (21:45): This is something that no other organization or company was willing to do. And with that, they were able to provide comprehensive training. They also left it up to the surgeons at Geisinger to determine who was eligible for the surgery. So really not taking any sort of agency away from the health system at all. And because of that now, Geisinger benefits from the cost savings, and then Medacta also can be that innovative champion to be like, "I'm an innovative leader. I have helped this health system. I have enhanced patient care." As well as gained a very, very, very high level of provider trust. Rae Woods (22:20): I like this example because I think I use the phrase "taking the lead" when I referred to life sciences, but what I really mean is starting the conversation because this example that you just gave, the life sciences company didn't get too in the weeds and exactly what physicians should be doing at Geisinger, even if they may have taken the first step. Fanta Cherif (22:42): Right. And really that case study shows that as a life science organization, you have to be willing to take on risk and focus on patient outcomes to differentiate you from your partners so that health systems will want to partner with you in a very easy and seamless way. Rae Woods (22:57): Fanta, you told me it's important that health systems that are not just Geisinger think about these kinds of partnerships. So do you have a takeaway for the community hospitals who are listening to this episode? Fanta Cherif (23:09): My takeaway here is not to count yourself out before you begin your partnership strategy, making sure that you still understand the lay of the land when it comes to the varying levels of partnership so that you are also able to achieve your goals alongside these life science organizations. Rae Woods (23:25): Well, Fanta, thank you for partnering with us on Radio Advisory. Fanta Cherif (23:30): Thanks for having me. Rae Woods (23:37): Look, as health leaders, I know you have a to-do list that is a million miles long, but this episode is a good reminder for you to not to default to classic, dare I say, even old ways of thinking. In this case, defaulting to transactional relationships or feeling like it must be a full-blown long term relationship. If you're a life sciences company, don't discount the community hospital. And if you're a health system, look for opportunities to work with life sciences in a way that helps your business and the margin challenges that you have. And remember, as always, we are here to help. (24:41): New episodes drop every Tuesday. If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Chloe Bakst and Atticus Raasch. The episode was edited by Katy Anderson with technical support provided by Dan Tayag, Chris Phelps and Joe Shrum. Additional support was provided by Leanne Elston and Erin Collins. We'll see you next week.