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For those planning to live beyond 2011, a real list of top medical cities

For those who live and thrive by what happens in pharma, hospitals, medical device, health IT and all other things medical, here’s a list of the top 10 medical cities that matter today (and in the future).

Every list of the best healthcare cities in the country reads like my grandfather’s history teacher wrote them. They’re usually based on the same metrics: which city has the most NIH dollars, the most venture capital and the size of the healthcare workforce in that city.

The best report in recent years came from the Milken Institute, which in 2009 ranked Boston, Philadelphia, greater San Francisco, greater New York and greater Raleigh-Durham as the best five life sciences cities.

A report last week from Jones Lang LaSalle also had Boston, New York-New Jersey and San Francisco in its top five, but also included Los Angeles and Washington, D.C./suburban Maryland (I’ve placed each study’s full list at the bottom of this story).

These reports measure the life sciences and healthcare industries the way that they were. What really matters is which medical city will be elite beyond today. After healthcare reform. After the tidal wave of emerging health IT reshapes the industry and creates a new healthcare sector all its own. Amid the ferocious battle for top talent in an understaffed workforce. Post-convergence.

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These things should count as much as the cold recounting of NIH dollars.

So for those who live and thrive by what happens in pharma, hospitals, medical device, health IT and all other things medical, here’s a good list of the top 10 medical cities that matter today (and in the future).

10. Cleveland
Cleveland is the Hospital Capital of the World (the city should change its motto to “Get Sick In Cleveland!”). Cleveland Clinic is the beginning of that premise: a top 5 healthcare institution, a nearly unrivaled force in health system venturing and commercialization and an innovator in healthcare delivery and wellness. But the city’s University Hospitals Case Medical Center is a formidable second, coupled with strong hospitals and research institutions in nearby Akron and the rest of the city.

This is one thing that most of these lists don’t account for: a city that contains customers for the other parts of the medical industry. Cleveland is a city of customers.

It’s also a city of deals. This is a fantastic town for early stage investing thanks to heavy public funding. It has some of the most active angel groups in the country and continues to convince East Coast funds to open offices here.

9. New York City
Ah, New York. Such an amazing medical city that their hospitals once put billboards along the highway to remind New Yorkers they didn’t need to fly to other cities for their healthcare. Such a great medical city that Cleveland Clinic has the best ads in The New York Times. So innovative in information technology that incubators from Philadelphia have to come up and show them how it’s done.

Why is New York so often ranked as an elite medical city? Because it’s big, which is a ludicrous rationale. Saying New York is one of the top 5 medical cities is like saying the morbidly obese are the healthiest Americans because they account for the most healthcare spending (and that’s nearly the same rationale for Los Angeles, by the way, which does not make my top 10).

New York gathers a massive share of NIH dollars thanks to its research institutions. But New York is not yet entrepreneurial enough in its life sciences and healthcare sectors to be an elite medical city. Its industry activity is anemic for a city of its size, and outstanding organizations like Blueprint Health are the exception and not the rule. Inertia keeps it in the top 10.

8. Minneapolis-St. Paul
Oh why didn’t the Mayo brothers start that little hospital of their’s in the Twin Cities?

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This is the medical device capital of the world that claims the headquarters of Medtronic (NYSE:MDT), St. Jude Medical (NYSE:STJ) and whatever is left of Guidant. If you put Mayo Clinic in Minneapolis it’s a better med city than Boston. Plus, locals are making notable moves to encourage more early stage investing. It now has an angel tax credit and is slowly organizing and growing its angel investor networks. UnitedHealthcare is doing more than most payers to encourage innovations in healthcare delivery.

Yet Mayo remains far away. So the Twin Cities is stuck with the University of Minnesota, which can’t get a functioning incubator up and running. And the globalization of the medical device industry, coupled with taxes and reform at the federal level, will make the future tough on the medical device-heavy Twin Cities.

7. Seattle
Seattle could suffer as much as others as the traditional life sciences industry buckles. But they’ll adjust in many ways. The managing director of WRF Capital, Thong Le, took over the state’s biotech association and will try to help navigate through the potential decline in federal research dollars and make it easier for companies to raise capital.

Microsoft is also going to matter more and more in healthcare. HealthVault continues to move forward, philanthropist Bill Gates is passionate about healthcare and the company overall continues to delve deeper into health IT (one tiny indicator: it sponsored the first “Health” Startup Weekend). Plus, Seattle is home to scores of smart companies like Mobisante, Vizua and Navigating Cancer.

And here’s one stat that matters: Seattle has the third-highest research and development spending compared to its GDP to the other medical cities.

6. San Diego
The locals are worried
. And they are right to be.

But, fortunately for them, institutions and philanthropists in San Diego are pouring millions into the future of healthcare. QualComm and the West Wireless Foundation just recently committed more than $200 million to fund new mobile health and healthcare delivery solutions. In fact, startups won’t get funding from West Health Investment Fund if they can’t show how their innovations help lower the cost of healthcare (see video above).

Cities like Cleveland and Boston will pioneer healthcare delivery in hospitals. San Diego will also fuel innovative healthcare delivery from institutions like Scripps, but in addition through these aggressive private investments. And don’t fret too much, San Diego: The half-billion in venture dollars that still flows through the city’s life sciences industry is still the third-largest nationwide.

5. Philadelphia
Philadelphia is the Pharma Capital of the country (and when I say Philadelphia, I also include South Jersey in the geography). But the Milken study back in 2009 was spot on about the city’s strengths and its weaknesses. “University-based startups,” the report stated two years ago, showed “that its extensive strengths in research have yet to be fully captured in the region’s economy.

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Those universities have gotten better about tech transfer. Children’s Hospital of Philadelphia and Penn Medicine, among others, will be innovating around interesting advances in healthcare delivery (the collection of medical schools and hospitals should be the envy of almost every city in the country). Plus, announcements by Safeguard Scientific that it will more than double its health IT investments, tells you the region is making the changes necessary for the new healthcare economy.

4. Boston
It’s hard to make a case against Boston today. The place bleeds NIH dollars (more than $2.2 billion — double almost everyone else). It also gets more venture capital dollars than almost any city. And its collection of research institutions and the bright young minds they produce could fuel an industry for years.

But fewer and fewer innovations will happen in Boston and instead happen to Boston. Its status as the consensus great med city will give way to cities with a better tech side who aren’t so reliant on the medical device industry to carve out a reputation. Healthcare reform, FDA chaos, the medical device tax and globalization will eat industries like Boston’s from the inside out.

This is your father’s medical city. It will always be great. You will always think of it as amazing. Every now and then it will do something to make you say, “Wow. The old man’s still got it.” But the next generation will do better.

3. Washington, D.C.
The region has something that no other place has: The President of the United States of America. And here’s my prediction about that: President Obama will win another term, the Supreme Court will let Obamacare move forward unscathed and trench warfare will continue deep into Obama’s second term over just what is going to happen over at the U.S. Food and Drug Administration. Add to that a real opportunity to increase (or cut) federal research funding and the decisions in the next several years from the federal government are going to matter more than usual for the life sciences industry. Who knows, maybe the Doc Fix will get settled by 2015?

Politics is coupled with a strong industry along the region’s I-270 corridor. It’s a great atmosphere for early stage companies, it continues to captivate the pocketbooks of local officials and benefits from the impact of Johns Hopkins. Next, factor in $1 billion in NIH funding and a significant amount of R&D out of the local industry.

A few years from now — when the federal government completes its remake of the medical industry — the region will drop behind the Twin Cities on any credible top 10 list. But right now, it’s among the most important.

2. Research Triangle Park
PricewaterhouseCoopers gives one of the best examples
of new healthcare: “During the next five years, the secondary use of EHRs — extracting data from them and using it to improve patient care, predict public health trends and reduce healthcare costs — could be the health industry’s greatest asset.”

So it’s a region like Research Triangle Park that stands poised to capitalize. It’s the nation’s Biotech Capital; it includes research talent from Duke, the University of North Carolina and RTI International; and — most critical — can pull top talent from the likes of Red Hat, SAS and Epic Games (video games are critical to the future of medicine). Already, one of the most promising health IT startups, Axial Exchange, is based in the Triangle (it was founded by a former executive from Red Hat).

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Big Data? Leveraging the virtual world? Research Triangle’s creative tech sector is the ultimate jet fuel for a dominant life sciences sector. Already, thought leaders from the region’s pharma industry are re-thinking sales and relationships in a virtual world. Can “The Park” get the two sides to work together?

1. San Francisco
The technology revolution has come to healthcare. And no one is better poised to take advantage than the San Francisco Bay Area. It combines amazing old-line medical with an investor community that can do tech better than anyone.

Its NIH funding makes it the envy of almost everyone else, plus it has increasing support regionally to boost its numbers. The newly formed BioSF, though off to a rocky start, is an example of how the region will add to its 75 life sciences companies.

It already has more healthcare venture investment dollars than any other place in the United States. Now, add its tech-savvy angels and investors into the mix and that number only climbs. And that is critical. Generally speaking, most venture capitalists in the life sciences understand the complex regulatory issues around devices and pharma, but are of little help around online services or direct-to-consumer strategies. Most of the tech-focused funds don’t have the clinical savvy their medtech bretheren have. San Francisco is the most likely place to find the best of both worlds.

It’s as if the area has been preparing for this moment. There’s a push toward health IT entrepreneurship. The most important region for tech is now the most important place for life sciences and healthcare.

So where is my vision blurry? Post your top cities in the comments or tweet them to @medcitynews. And here are the top cities lists from two other institutions

Milken (2009)

1. Greater Philadelphia

2. Greater New York

3. Boston

4. Greater San Francisco

5. Greater Raleigh Durham

6. Greater Los Angeles

7. Chicago

8. Minneapolis

9. San Diego

10. Washington D.C.

11. Seattle

Jones Lang LaSalle (2011)

1. Boston

2. New York/New Jersey

3. San Francisco Bay Area

4. Los Angeles

5. Washington D.C./Suburban Maryland

6. Philadelphia

7. San Diego

8. Minneapolis

9. Raleigh-Durham

10. Seattle

11. Chicago

12. Denver

13. Houston

14. Florida

15. Atlanta

16. Indianapolis