For decades, academic health systems have approached innovation cautiously; not for lack of ambition, but because the economics rarely worked in their favor. Thin operating margins, long development timelines and uncertain returns made large-scale investment in innovation difficult to justify, particularly when core clinical operations were already strained.
Jochen Reiser, MD, PhD, president and CEO of the Galveston-based University of Texas Medical Branch, said that traditional biotech innovation often conflicted with the financial realities health systems face.
“Typically, innovation around biotech is a long term commitment,” Dr. Reiser said during an interview on the “Becker’s Healthcare Podcast.” “You need to have a lot of misses to have one or two hits.”
That risk profile made innovation feel like a luxury rather than a strategic necessity for many academic institutions. AI and health technology, however, are operating under a different set of conditions, and those conditions are forcing a reevaluation.
Unlike biotech, where years of clinical trials and capital investment often precede any operational benefit, AI tools can be tested, refined and deployed much earlier in their lifecycle. That shift has made innovation feel less speculative and more practical for health systems.
“With AI and health tech, the needs are so vast that it’s almost clear that technologies that are good and rooted in sound science will ultimately make it to the market a lot faster,” Dr. Reiser said.
Speed to value is a critical distinction. AI tools can be implemented in live clinical and administrative environments, allowing organizations to see real-world impact while development is still underway. That actionability has helped reposition innovation from the periphery of academic medicine to the center of institutional strategy. At UTMB, it prompted a formal structural shift. In 2023, the system elevated innovation to the same level as education, research and clinical care delivery.
“We officially made innovation the fourth pillar of UTMB,” Dr. Reiser said.
UTMB opened an innovation center, reworked its governance model and embedded AI and technology development into both academic and operational workflows. The result has been faster adoption and broader deployment than many peer institutions.
“We are proud to say that at UTMB, we are very technologically advanced around AI and have probably more programs running today than most other places will have,” he said.
Many of those programs are already embedded in daily care delivery. Ambient listening technology, for example, has been deployed systemwide rather than confined to pilot groups, helping reduce documentation burden and refocus clinicians on patient interaction.
“It’s been really a big differentiator in terms of happiness for the patient, but also for the provider,” he said. “When you look at revenue cycle, when you look at billing and compliance, those are all areas where you can utilize AI. In our innovation domain we’re working together with many partners to develop customized programs for health systems that we then pilot at UTMB, and can ultimately spin out or be part of a larger company effort and hopefully be an alternative revenue stream as those technologies mature.”
UTMB is working with industry partners to co-develop tools that can be tested internally and, if successful, scaled beyond the organization.
“In our innovation domain, we’re working together with many partners to develop customized programs for health systems that we then pilot at UTMB,” Dr. Reiser said.
That approach reflects a broader shift in how academia and industry interact around innovation. Rather than serving solely as test sites or data sources, health systems are increasingly positioned as co-creators.
“AI finally is providing the type of partnership between industry and academia that we always wanted but never could do,” Dr. Reiser said.
The difference is structural. AI allows health systems to lead innovation in ways that were previously dominated by pharmaceutical companies and external investors.
“With AI, it’s different,” he said. “We are an equal partner, if not the leading partner.”
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