CbusineZCorporate venturing in health insurance

J. de Groot

2

Introduction

Drs J.G.B. de Groot

Joep.de.groot@cz.nlJgbdegroot

Currently: board of CbusineZ

Past: DSM and Managing partner The Essence Consulting

Experience in venturing:- Set up 6 companies as a managing director

- Served on 26 boards as a (non-)executive director

- Involved in > 40 M&A deals

3

Index

Our environment

The goal of CbusineZ is to change the behaviour of the healthcare system

Cases:Hearing aidsBenchmarkingeMental HealthCommunication platform

Corporate Venture OfficeOrganisation and alignmentStaffCVM: expert system for monitoring & portfolio management

4

The cost of healthcare have risen sharply

Rise cost of hospitalcare in Netherlands last 5 year

Cost increase in AWBZ (elderly care) in 10 year

30 %

to 20 mrd €

66 %

to 21 mrd €

5

In 1970:

72 year

In 2020there are3,3 mln 65+

Life expectancy has risen

LINH, RIVM,

+3

And will increase the coming years

65+ in 2010:

2,5 mln

This will lead to an increase in the number of

elderly people

Baby in

2010: 83jr

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We live longer.... But not always healthy...

LINH, RIVM,

50% doesn’t exercise enough

40% over weight15% obesity

27% smokes

Unhealthy lifestyle is an important reason for chronicle illness

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463.000569.000

1.1 mln

1.2 mln

Because of higher life expectancy & unhealthy lifestyle the number of chronically ill will rise

Depression COPD Diabetes heartcondition

Can you imagine what this means for care delivery?

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Index

Our environment

The goal of CbusineZ is to change the behaviour of the healthcare system

Cases:Hearing aidsBenchmarkingeMental HealthCommunication platform

Corporate Venture OfficeOrganisation and alignmentStaffCVM: expertsystem for monitoring & portfolio management

9

The goal of CbusineZ is to change the

behaviour of the health care system

Medical outcomes

Costs

Customer satisfaction

Our goal is to set up or create ventures that changes the

system and thereby improving quality or reducing cost

We set up ventures that improve “the game”

10

Collective services

unclog

missing

Setting up a missing ‘function’ in the value chain

Examples:BenchmarkingeMental healthSelf management tools

“unclog” the system by introducing a best practice or low cost option

ExamplesHearing aidsH&S serviceDisease mngt IT system

Collective servicesServices that require critical mass and are above an institution own interest

Examplescontracting and invoicing eplatformNationwide informal care initiativeCare purchasing for cities

unclogMissing

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The venture can be small, but the effect on

healthcare and CZ can be substantial

New venture

Venture with limited profitability

Substantial effect on costs or driver for enhancing

purchasing function

Example Effect

VECOZO Largest administrative data platform (contracts, invoices)

Reduction on FTE in backoffice

Psy HealthDirect

eHealth treatments for depressions, fear, burnout

Reduced cost of interventions and improved purchasing

To create tipping point in policy related areas we

use the Minimal Required Energy strategy

12We assemble the minimal needed set of partners:For competences and/orlaunching customers

Product &services 1.0

Implement and proof to the healthcare sector that the innovation is succesful

Expand step by step

Include new partners and (often) open up the governance structure

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Index

Our environment

The goal of CbusineZ is to change the behaviour of the healthcare system

Cases:Hearing aidsBenchmarkingeMental HealthCommunication platform

Corporate Venture OfficeOrganisation and alignmentStaffCVM: expertsystem for monitoring & portfolio management

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Hearing aids: yearly € 20 mln potential

savings... But how to open up the market?

Prices could be slashed in half

A completely closed market

1250

525

Our analysis showed that hearing aids could cost less then 50% of the 2012 price

The market was strictly divided and attempts to break the power in the past had been punished by market leaders

15

Having the info and a credible threat to existing

players CZ succeeded in the purchasing project

1 2

We set up Tonen (a hearing aid service):- Better quality (at home)- Low price (€ 500)

Hard to find a supplier

offer

Purchasing project

Reduce suppliers

Use Tonen price as reference

Even the largest suppliers reduced their prices with 40-45%

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To open up the € 6 billion black box we

started a benchmark initiative

Mental Health was a complete black box

6 billion

Health care insurers became responsible for purchasing mental health services

A sector of 6 billion... No one had a clue on outcomes!

CbusineZ, the 3 large health insures and a VC started KZN a benchmark initiative

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Using MRE strategy the sector was

forced/seduced into cooperating

A BV (“ltd”) with 5 shareholders

Modern, ‘new’ mental health institutions as customers

Sector very resistant to idea of ROM and benchmarking

A foundation with a board of patients, mental health and healh insurers

The whole sector participates

Sector can improves its

performance and health insure can purchase based

on value

Professionals still hesistating

Using eHealth a depression can be treated just as

effectively with half the cost and time

vv Using eHealth

3 Face tot Face + an ehealth

program

Of

eHealth programm &

coaching on telephone

cost: ca € 300 - € 400

g Current depression treatment

1st line 8 conversations

€ 560

2nd line: 8-12 conversations

€ 1200+

Same effectSame effect

55% of patients

would prefereHealth

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We introduced a JV to remove the barriers for

the usage of eMental Health

Adaption of eMental Healht

Prices of eHealth were to high

Tarrifs for treatment not high enough

Knowledgde on how to use eHealth was low

JV with mental health provider

Lower prices

Change policy to stimulate eHealth

Invested in JV and changed the policy

By removing the barriers and promoting we now see a, carefull, upscale of the usage of eHealth

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eLabs create mental health interventions in co creation using gaming techniques

The eLabs are corporations. The members are mental health institutions and Cbusinez.

The interventions are created in co creating between patients, care professionals and Serious Game designers

- Autisme- Addiction- Psycho trauma

Video based training for skill for autism patients

‘quest for a better life’

VECOZO is the platform that facilitates communication between institutions and health insurer

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Healthcareprovider

Healthcareprovider

Healthcareprovider

Health insurer

Health insurer

Health insurer

VECOZO:

Reduction in back office costAt providers and HI

Being the the Facto standard there are not many doublings or data incompatiblities in the Netherlands

CbusineZ portfolioJan 2015

voorheen

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23

Index

Our environment

The goal of CbusineZ is to change the behaviour of the healthcare system

Cases:Hearing aidsBenchmarkingeMental HealthCommunication platform

Corporate Venture OfficeOrganisation and alignmentStaffCVM: expertsystem for monitoring & portfolio management

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CbusineZ organisation: the elements have to

aligned

Organisation

Culture

Process & Tools

Finance

People

Strategy

CorporateVentureOffice

Position in the CZ organisation:

at board level

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BoardCZ

Marketing

Healthcareprocurement

Sales

Customerservice

Declarationservices

Staff

BoardCbusineZ

LegallyCbusineZ is a separate legal entity with its own board

FunctionallyTo the CZ organisation the CZ-CbusineZ board present themselves as one

So CbusineZ is organised at C-level

CSF

CbusineZ organisation structure

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Executive board

Arno van Son Joep de Groot

Ria Yap

Business managers

Gertjan van Rossum

Investment managersSupport

Angelique Bonte

Stephan Hulsbergen

Freek van Gerwen Berry MortierJeroen Nugteren

Finance

Lianneke Mol

Myrthe van HoekCarolien Oppeneer

Legal Intern

Nicole van Loy

CbusineZ network: CbusineZ, Venture managers and CZ innovators

CbusineZ event:(Every 3 months)

Deal flow

Presentation on relevant topic(eg strategy, innovation lessons from Jobs)

Thought provoking topic:(eg design, serious game)

Networking

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CbusineZ organisation: the elements have to

aligned

Organisation

Culture

Process & Tools

Finance

People

Strategy

CorporateVentureOffice

30

CbusineZ attracts employees from CZ and

‘reprograms’ them

Venture

Opera

CbusineZ

Investment managers

Venture manager

Consultant

1

1

2

3

2

3

Intensive coaching program: from “corporatee” to innovator

Attitude- Results Instead of process- Don’t tell me why it can’t be

done, tell me what you need- Connect instead of protect

Skills- Focus, focus, focus- PRISMA (problem solving)

Speed- Enourmous acceleration

32

CbusineZ organisation: the elements have to

aligned

Organisation

Culture

Process & Tools

Finance

People

Strategy

CorporateVentureOffice

33

The CVO needs a formalised process and tools

0.IdeaGeneration

1.Screenlead/idea

3.DevelopmatureVenture

2.1 New Venture

2.2 ParticipationM&A

BP Start up Scale up ExpansionExit Venture

4.Exit Venture

Deal Flow Strategic Goal Map Portfolio Mngt

Portfolio Mngt

Venture Mngt

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Deal flow list facilitates progress by transparency

and killing projects that won’t progress

Simple list withVentures & projects with their status and milestone deadline

Managers want to show progress

The deal flow makes the progress transparent.

Managers want to show progress to the board and the rest of the CbusineZ community

Facilitates killing projects

Corporate habit:We have invested a lot of effort in this project, so it would be a shame to stop now...

Kill and kill early!Ventures/projects that won’t progress are killed!

“Don’t be temped to let it simmer”

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Create a Strategic Goal Map… enhance it with every phase and use it for monitoring

1. Market Map

2a. Strategic goal for the parent2b. Needed results

3. Business goals for the Venture

4a. Needed links with the parent4b. Needed links with other Ventures in the portfolio

5. JV partner selection and abilities

to be transferred

Strategic Goal Map

Establish the strategic goals the company wants to achieve with this venture

Detail needed business results, needed links & partners

The Strategic Goal Map is needed to monitor the Venture and to organise the links with the parent

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We had no tool to analyse organisational maturity and to coach the venture director

How good are the ventures in the portfolio?

How can we help ventures to progress to the next phase?

37

We review on 13 aspects to get a complete picture

38

Based on literature, experience and case study we devoloped our own rules set

Venture management literature

Subject literature

Experience

Cases

CbusineZ Venture ManagementHeuristic rules set

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Per phase, per subject categorie 3-5 questions are developed (total :350)

CASEWhat do

you think?

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Thank you for your attention and have fun venturing