The Silicon Valley of Healthcare: A Conversation with Shaye Mandle, President and CEO of Medical Alley

In Minnesota, there's a fearless sprit when it comes to healthcare innovation. Shaye Mandle is President and CEO of Medical Alley, Minnesota's healthcare association. Medical Alley bills itself as the Silicon Valley of healthcare. In a wide-ranging interview, Shaye explains why Minnesota has been a longtime leader in this ecosystem and where the healthcare industry is pivoting because of the COVID-19 pandemic.

Medical Alley: https://medicalalley.org/

Transcript

Bill Von Bank:

This podcast is brought to you by Destination Medical Center, creating a global destination for health and wellness in Rochester, Minnesota. More at dmc.mn.

Shaye Mandle:

The need to act quickly changes the game for healthcare. Whether it's vaccine development or the shifts that providers made to get people care, I think the industry demonstrated that we can do things faster and at a higher quality, and I think that opens the door as we look at regulations and expectations that are changing from health consumers. Some people have said the genie's out of the bottle. I think we've accelerated healthcare transformation five years in the last 10 months.

Bill Von Bank:

Welcome to Urban Evolution, a podcast about harnessing creativity and innovation to transform communities. I'm your host, Bill Von Bank. In Minnesota, there's a fearless spirit when it comes to healthcare innovation. My guest today is Shaye Mandle, president and CEO of Medical Alley, Minnesota's healthcare association. Medical Alley bills itself as the Silicon Valley of healthcare. In a wide-ranging interview. Shaye explains why Minnesota has been a long-time leader in this ecosystem and we discuss how the healthcare industry is pivoting because of the COVID-19 pandemic. Shaye Mandle, welcome to the Urban Evolution podcast.

Shaye Mandle:

Well, it is great to be here and I appreciate the invitation.

Bill Von Bank:

Shaye, share with us your career journey and your current role as president and CEO of the Medical Alley Association.

Shaye Mandle:

Well, the career path is all over the board, which I think gives you a really interesting opportunity to run the kind of diverse organization we have, but historically, I'm a lawyer by training. I like to say I'm a reformed lawyer. I've worked in the private sector doing M&A for a large defense company. I've been in academia. I ran a technology institute at the University of Memphis, the FedEx Institute, where we established the tech transfer office and I led that work, including our engagement with the private sector. I've ran a couple of different organizations, the Illinois Coalition for Science and Technology, which had some similarities to what we're doing now. We did have an early seed-stage venture fund, which was before and after the internet bubble burst of the early 2000s, which was quite an experience.

              I've been at Medical Alley now for 10 years, actually, and I'm going on year seven in the CEO role. For your audience, we are Minnesota's healthcare association. We have members and directors that represent every sector of healthcare, and they're, of course, names everybody knows, from the Mayo Clinic to UnitedHealth, Medtronic, Ecolab, 3M, so we really brought together not just the leadership here in Minnesota, but global leadership from every sector of healthcare, and I think that gives us some unique opportunities as a community to really do some great work.

Bill Von Bank:

Shaye, I understand that in 1984, Earl Bakken was one of three Medical Alley founders. Earl, as we know, founded Medtronic in 1949 with his brother-in-law from his 800-foot garage in Minneapolis, creating the first battery-powered external pacemaker. How did Earl's work lead to the founding of Medical Alley and how does his legacy live on through your work today?

Shaye Mandle:

Earl obviously is a legend in the medical device community and healthcare, certainly here in Minnesota. Earl was one of the first people along with then-governor Rudy Perpich and a few others who really recognized there was something special about the community here, so some of our founding members included the Mayo Clinic, the University of Minnesota, and actually, their vision, and the governor had done a report on the industry, which was led by then-deed-commissioner, Mark Dayton, who as you know, served as governor here for eight years. The community really came together and said, "We need to be doing the things that really give Minnesota an opportunity to be healthcare leaders," and so it was some combination of working with the governor's office on public policy, it was bringing the community together. Even from the origin, I mean, there were payers and providers and device companies and drug companies.

              It's interesting that today, our vision for the organization, the execution looks incredibly similar to what Earl had envisioned. One of the things he wanted to do in the original business plan, he wanted a sticker on the box of every product that left here saying "Made in Medical Alley." He wanted that to represent the highest value of healthcare around the world, and so today, obviously, we spend a lot of our time, it's a priority, telling the Medical Alley story, featuring things like Destination Medical Center, as well as our companies, including the early-stage companies, so Earl's vision for the organization almost 40 years later is almost completely intact and obviously really drives Medical Alley today.

Bill Von Bank:

So, diverse back then and diverse today?

Shaye Mandle:

Correct, and not always the case. Over the 40 years, the organizations had different continuance of membership. There've been times in particular when that device industry was leading industry within the organization, but we made a real commitment, and device leaders were a part of this, to really make sure we had everybody at the table. When I took over, Mayo Clinic was the only healthcare provider that was a part of the organization, and today that's very different, CentraCare and Allina. We did not have payers at the table as we once did, and so today, UnitedHealth Group and Allina Health, Bind, and Bright. We have Blue Cross Blue Shield. But we also do have all of those medical device companies that people know, organizations like Ecolab, as well as those non-traditional entrance coming into healthcare, like Best Buy Health, so it is today, our association, truly the one place around the world that you can come to a table and interact with global leaders from every sector of healthcare and we think that creates an opportunity for this community to really lead the transformation of healthcare.

Bill Von Bank:

Front and center on your website is this phrase: "Welcome to Medical Alley, the Silicon Valley of healthcare." That's a big statement.

Shaye Mandle:

It is. We created our vision statement a few years back that said, "We aspire for Medical Alley to be recognized as the global epicenter of health innovation and care," and we were very prescriptive about that. It's always been our goal to really get the message out, and as we've worked with different firms to really finalize that message, we decided to really leverage the Silicon Valley brand. Silicon Valley is a brand that people know. They associate it with innovation, bleeding-edge technology, but not necessarily healthcare, and so with that brand recognition out there, I mean, obviously, what we want people to understand about Medical Alley is that when it comes to healthcare, the answers are here. Tomorrow's healthcare happens in a Medical Alley today and we thought the quickest way to connect that message and get people to take a look at what was happening here was to use a name that they know.

              One other thing I'll point out, a few years ago, The Smithsonian opened an exhibit called Great Places of Invention and they chose six places, and of course, Silicon Valley is one of those places, but the one place for healthcare that is permanently exhibited as a great place of invention is Medical Alley, and so we sit alongside Silicon Valley and a few other places in our nation's history and we just thought, again, that using that phrase would allow us to connect the spirit, the culture, the innovation that comes out of Medical Alley around healthcare in the mindset of people more quickly.

Bill Von Bank:

When it comes to innovation, certainly, Silicon Valley is referenced, as well as Boston and even Houston. Give us some perspective on how the Medical Alley ecosystem compares.

Shaye Mandle:

Well, when it comes to healthcare, Bill, it is unique and extraordinary. Certainly, Boston is a great place and biotech and pharma are the predominant players there. Obviously, in Silicon Valley, we're talking about consumer technologies, social media, internet infrastructure, and they've been known for that. Houston, certainly a place with the Texas Medical Center that is looking to be a leader in medical devices in particular. Compared to Medical Alley today, I mean, it is a very small medical device community in Houston.

              What's magical, I think, about Medical Alley is every one of those sectors, you can find leadership, so when you look at providers, right, there are great hospitals and clinics around the country, but consistently, the number one ranked hospital in the country is the Mayo Clinic. We have great care delivery. Medical Alley has always been a place where health plan models have been on the leading edge, and so today you see the two biggest raises in new health plan models are from Medical Alley, Bright Health and Bind Benefits.

              We have one of the fastest-growing biopharma contingents and a lot of that's coming out of Mayo Clinics. We've got companies like Vyriad. Takeda has set up shop to be their biologic center of excellence. People don't realize that Be the Match, the national marrow donor program, one of the biggest biotechs in the country, is headquartered here, and of course, the rise of digital health, so you see companies like Zipnopis that during this period of time where people have to do virtual visits, their business has exploded, and companies like AiRCare that's delivering mental health, as well as Learn to Live and companies like Vidscrip that are creating videos with doctors, so I think what we have that no other ecosystem has is true national and global leadership in each sector.

              But perhaps more importantly, it is the connectivity of the community. When you go to The Smithsonian, the byline is tight-knit community, and so whether it's the University of Minnesota, Mayo, Medtronic, a lot of these early-stage companies, there really is that connectivity that allows organizations to be successful. When you throw in, again, Destination Medical Center, we're really attracting the best, the brightest, the technologies and the investment at a much higher rate of growth than we see in those other geographies.

Bill Von Bank:

It seems like drive and desire are there, too.

Shaye Mandle:

I think this is a place where our culture is taking care of people. While all the companies we've mentioned are great businesses, and that's an important part of attracting capital, being able to attract talent, but at the end of the day, I mean, I think the patient and the health consumer coming first, I've never been in a meeting where that isn't the first topic of conversation, including we had a board meeting last night and you've got competitors in the room, you've got payers, providers, suppliers, right, and so this ecosystem's connected but can always be hyper-competitive. What we tend to see is everybody's around the table asking the questions that are not about their self-interest, but what we can do to help: "How can we help in the distribution of the vaccine? How can we get together to really tackle the health inequities challenge?" Nobody's ever talking about the payment models and the money, but rather, our starting point being caring for people. I do think it's a bit unique when you look at it from the comprehensive nature of collaboration.

Bill Von Bank:

Why should companies invest their financial and intellectual capital in Medical Alley? What's the value proposition?

Shaye Mandle:

I think it starts with the workforce. I mean, there is certainly an exceptional hardworking workforce here. There are areas of expertise in volume that simply don't exist in other places. Certainly, the medical device industry is part of that. You look at UnitedHealth Group, Optum. There are some really large companies that have developed talent over the years. People have been at Medtronic and Boston Scientific and 3M and Smiths and Coloplast, and so I think that level of experience simply doesn't exist in other places.

              I also might mention your dollar goes a lot farther, right? If you're a company looking to grab the top talent, but also, you're looking at production costs, you're looking at labor costs. Relative to Northern California, Boston, some of those geographies, your dollar goes farther. We see valuation certainly increasing in early-stage companies, but I would say people here know how to manage money, they stretch dollars farther, and so when you're just looking purely at the "Where do we get the biggest bang for our buck?" I think Minnesota stands out about above all other places where you can still find the talent that you really need.

Bill Von Bank:

And quality of life can't be beat.

Shaye Mandle:

Can't be beat. No, I think that's all part of it. When you look at housing prices and spirit of community, I think we have all of that, really. You can look at the tangibles of cost of living, but also, I've never lived anyplace that embraces community and health and natural resources. The trails. I mean, this is the biggest biking community in the country and the list goes on and on. It truly is a special place, both professionally and personally.

Bill Von Bank:

Minnesota has a long history and legacy of groundbreaking medical technology, research, and healthcare from Medtronic, as we mentioned, to the University of Minnesota with great research, and of course, healthcare for Mayo Clinic. What has made Minnesota so strong for so long?

Shaye Mandle:

I think everyone always asks the question, "How do you replicate or create this?" You mentioned Houston. I think there's a little bit around the country of people trying to steal industries or create them. Usually, the foundations of industries, it's a little bit lucky, right? I mean, the Mayo brothers more than 150 years ago did the right thing and I think that pursuit obviously has led to the number one hospital. Earl Bakken was working around the University of Minnesota and we were fortunate to really have groundbreaking cardiologist Walt Lillehei, who's a big part of that Medical Alley exhibit. They were fearless. They were trying new things. I think that fearless spirit is a big part of why we continue to be leaders.

              I also think the community spirit of investing in our people, pushing them out the door, challenging them has been important, too. If you look at the early-stage community here for decades, right, it is people who have had great ideas that maybe wouldn't flourish, couldn't flourish in Mayo or Medtronic. Those organizations have encouraged and invested in and it is that connectivity of network, I think, that really does make things unique and it does. It's that we're going to take the risk to improve people's lives, spirit, I think, that really continues to drive innovation coming from this region.

Bill Von Bank:

2020 was another record year of investment in healthcare startups in Minnesota. What's driving that? How do you harness that and how do you keep the momentum?

Shaye Mandle:

Well, first and foremost, I think it's great ideas, right? It's great ideas and ideas that are timely as we look to transform healthcare. We did, raised almost a billion-and-a-half dollars in startups and when you look at those big raises, you see Bright Health, you see Bind Benefits. I think we all know value-based healthcare requires a lot of change and the payment model and health plan model is a part of that. You see a company like Preventice, remote patient monitoring, raised a ton of money. Of course, it was just announced they're going to be acquired by Boston Scientific.

              I think the exit side of things. We had 13 exits in 2020, those dollars in the billions, and so I think part of the reason we're raising capital more and more people are seeing the exits. They're seeing the quality of company. It's not just the business models and the people, but they're really targeted at healthcare transformation, and so we're drawing a lot more capital. As you know, we'd love to have more capital based here, but our relationships with investors on the coast and around the country continue to grow and there continues to be interest because, again, our companies, I think, are targeted at the biggest problems in healthcare. A lot of those are coming out of the Mayo Clinic and are based in Rochester, so we're seeing a ton of growth there, which is amazing, and again, just in the right space.

Bill Von Bank:

What is needed to take the healthcare startup ecosystem in Minnesota to the next level? How do you get the attention, or more attention, of investors?

Shaye Mandle:

Well, we do have great entrepreneurs here building great businesses. I think a few things. We're certainly working on it. We're launching a program this year called Medical Alley Starts, which is partnered dramatically with companies in town, incubators, so we're not trying to reinvent the wheel or do the work ourselves, but be a collaborator. I think we've worked really hard to build relationships with investors. One of the things investors always want, they want to see deals, but they want to see deals from people that they trust, and so we've really tapped into those successful entrepreneurs to get them more engaged in the community. I would say there is an amazing entrepreneurial community of those who've been successful that take the time to mentor, make the connections for newer companies.

              I think capital is always going to be an issue, Bill. The capital's parked in other places, it takes a bit more work, but you do see a lot more articles on fly-over country not so much fly-over anymore. You've seen Case starting Rise of the Rest. I think there is, in the investor community, a real interest in finding those places where they can really find innovative companies, and as they've looked, I think Minnesota continues to stand out when you see... We just put out our investment report, but compared to Houston and Chicago and almost everything in the middle of the country, Minnesota continues to lead and grow that fundraising, so I think it's been great to see Governor Walls make some commitments, launch Minnesota. We're really starting to have both the public and private sector interested in putting the tools in place.

              Again, I think this is also a place where underrepresented and underserved communities of entrepreneurs are part of that ecosystem and plugged in, and so for investors looking for businesses that are either non-traditional, certainly in the models around healthcare, are looking for those entrepreneurs that typically have not had access to capital. I think there's a great package of that happening here and that's also increasing interest.

Bill Von Bank:

As you look back at 2020, it's a year most people and businesses would like to forget. How did the COVID-19 pandemic effect the health and technology businesses and Medical Alley?

Shaye Mandle:

It's been, I would say, a little all over the board, Bill. I think it's been up and down, but long-term, I think these things will certainly even out. If you're a medical device company, for example, when you go through periods of time that elective procedures aren't happening, that's a big down cycle, but then, of course, people still need those products. There's pent-up demand, those cycle up. The providers have those experiences. The payers, the same thing, right? When people aren't going in, dollars shift, so I think the year and probably the next couple of years, the financial cycles are going to look pretty lumpy, but in the end, the overall growth is going to be there.

              In terms of our association, surprisingly, I know this has been a tough time for associations, during the pandemic period, we saw our largest growth in membership relative to that period of time in any other year, so clearly there's a need. Healthcare companies wanted to connect and collaborate. The industry itself will continue to grow and be successful, so I think it's short-term challenges, but I would also add I think the need to act quickly changes the game for healthcare. Whether it's vaccine development or the shifts that providers made to get people care, I think the industry demonstrated that we can do things faster and at a higher quality, and I think that opens the door as we look at regulations and expectations that are changing from health consumers. Some people have said the genie's out of the bottle. I think we've accelerated healthcare transformation five years in the last 10 months.

Bill Von Bank:

I've heard that a lot, the acceleration of new approaches such as telehealth. Can you talk a little bit more about that? Because in some previous podcast episodes, both with Mayo Clinic and Limb Lab in Rochester, that's been a big topic in a big part of their business model.

Shaye Mandle:

It has to be going forward, right? I think the few years prior, a lot of digital health companies, a lot of development around care delivery virtually, but not incentives to do it, per se, right, and so the old model, both on the payer and provider side, everyone was working on it, but there wasn't a requirement to do it and that changed overnight. I mentioned Zipnosis earlier. I mean, thousands and thousands of percent increase in the patients that they serve, and so I think everybody knows it's got to be a part of the business model. It'll allow us to really change the cost curve and I think because we were forced to do it, there's real-world evidence that you can deliver the same or better quality of care and I think that was always an important element. Providers wanted to do it, but we're always concerned a little bit about the outcomes piece and the real-world evidence has just been there.

              One of the challenges that it does create that I think we're sensitive to and we've seen this, not just in healthcare but with millions of kids needing to be educated at home, is the access to technology and the ability to utilize virtual care, so when we look at some of our more rural areas in the state of Minnesota, when we look at income and equities and what homes look like, I think we're going to be making a big push as the federal government looks at infrastructure bills, for example, that the digital infrastructure is a critical part of that. Care deliverers are taking advantage of the technology. It is a critical part of where we go forward, but we also need to make sure that the accessibility we have for our citizens to take advantage of it is there and that's a gap right now.

Bill Von Bank:

You've been at the helm of Medical Alley Association for a decade. How has your association evolved over time and what's on the horizon?

Shaye Mandle:

I don't know that we look anything like we did. I took over in 2014, as I mentioned. Mayo Clinic, of course, was involved, but mostly device companies. Our business model actually was completely different then than it is now. We were predominantly an events-based organization. That's where most of our dollars came from. I just felt like we were more in the business of trying to sell a ticket or a sponsorship than we were in creating a holistic value proposition and really bringing people together, not just to consume content, but to participate in it.

              Today, we have more members than we've ever had. Our team is about double the size that we were seven years ago and our budget is as well. I think we've evolved into a content generator. We have evolved into a healthcare transformation collaborator, and so our staff looks a lot different, right? We have different skills. We've got a lot of great technology employees. It's a lot of communications in place, certainly a much larger membership team, so we've evolved significantly.

              What drives us every day is the vision. What can we be doing today to empower companies to not just succeed but be global leaders? Then how can we tell that story? We've done that by trying to be, like our companies, on the leading edge of what's happening, so we do a lot of pivoting, which sometimes can drive a staff crazy, but we're always on the leading edge. When the pandemic hit, we stood up resource connect, we got a lot of material to a lot of providers and we brought device companies to the table getting ventilators out of testing labs, and I think just standing up that resource in 24 hours speaks to the way we've evolved and the kind of responsiveness that we think this community requires.

Bill Von Bank:

Minnesota is a humble state and there's such a great story to tell. How do you tell the story of Medical Alley and all the successes over the past hundred years?

Shaye Mandle:

It's fascinating, Bill. I mean, from my perspective, it's bold, loud, and proud. I'm not a native Minnesotan, but I've spent the last decade in rooms with leaders who say, "Our number one priority is we have to tell the story," and everyone identifies that that humble nature holds us back, and so I think it is being bold. I mean, you mentioned at the beginning drawing the parallel and saying, "This is the Silicon Valley of healthcare," or, "This is the global epicenter of health innovation and care." I think we just have to get past the fear that somehow that's going to make people doubt how great we are, and so the approach we've taken, be bold, be loud, be proud, put the bait out there and set the hook and then let people come and really learn the story, right? There is a lot of steak behind the sizzle. If we put the sizzle out there, we think we have the best story historically and today to tell, and so we are, we're getting a little aggressive and bold just to try to create that look because we know the story is so comprehensive and so attractive.

Bill Von Bank:

Medical Alley hosts a podcast. Tell us more about it.

Shaye Mandle:

Yeah. We've, I think like everybody else, been forced to do things differently, something we always wanted to do but have really put in place now. We've had members hosting those podcasts. We've had different members of our staff. We've had a few people on, individuals, certainly started with our board and we take on the topics that we think people are interested in hearing about. Certainly, how we're working through the pandemic, but I still think people are interested in where healthcare is going, how the pandemic is impacting that, as we talked about, telehealth. We bring leaders to the table to ask the questions, "How are you doing it? Where do you see things going?" We always ask the question, "What is the impact of being in Medical Alley on your success?" It's been great for us. It's a way to communicate with our members and the community and it's a lot of fun.

Bill Von Bank:

We are early into 2021. Shaye, as you look ahead and the ecosystem in which you live in, what inspires you?

Shaye Mandle:

I think this acceleration, Bill, today is really inspiring. It is also just the leaders in this community, so I am fortunate. I do think I have the best job in the world. I get to sit and talk with all of these leaders and see them when there isn't a camera or a microphone talking to each other. I think what inspires me every day is the belief in seeing leaders interact, that we really can revolutionize and change healthcare, right? We all have horrible healthcare experiences, right? Even at the best places, healthcare is complicated. It's difficult to navigate. It can be confusing. We don't know what's going to be paid for, or whether we can get access to the newest innovations, and those are the conversations that I see happening. What inspires me every day is to learn how we can assist, but it really is just seeing the world's greatest leadership commit all of their resources, all of their energy providing a healthcare system that really works for everybody and also delivers the kind of innovation that changes lives.

Bill Von Bank:

Shaye Mandle, we really appreciate your time. Thank you for being our guest on Urban Evolution.

Shaye Mandle:

Truly a pleasure. Thanks for having me.

Bill Von Bank:

More about the podcast and our guest can be found at urbanevolutionpodcast.com. Urban Evolution is a production of Destination Medical Center Economic Development Agency. Learn more at dmc.mn. Stay safe and be well.