DUKE BEIJING HEALTHCARE LEADERSHIP FORUM THE DORENFEST CHINA HEALTHCARE GROUP Duke Beijing...

DUKE BEIJING HEALTHCARE LEADERSHIP FORUMDUKE BEIJING HEALTHCARE LEADERSHIP FORUM THE DORENFEST CHINA HEALTHCARE GROUPTHE DORENFEST CHINA HEALTHCARE GROUP

Duke Beijing Duke Beijing Healthcare Leadership ForumHealthcare Leadership Forum

USING THE U.S. EXPERIENCEUSING THE U.S. EXPERIENCETO IMPROVE H.I.T. INVESTMENT TO IMPROVE H.I.T. INVESTMENT RESULTS IN CHINARESULTS IN CHINA

DURHAM, NORTH CAROLINA APRIL 26, 2007

DUKE BEIJING HEALTHCARE LEADERSHIP FORUMDUKE BEIJING HEALTHCARE LEADERSHIP FORUM 2 THE DORENFEST CHINA HEALTHCARE GROUPTHE DORENFEST CHINA HEALTHCARE GROUP

AGENDAAGENDA

THE DORENFEST GROUP AND ITS CHINA BUSINESS APPROACHTHE DORENFEST GROUP AND ITS CHINA BUSINESS APPROACH

THE U.S. HEALTHCARE INDUSTRY AND ITS USE OF INFORMATION TECHNOLOGYTHE U.S. HEALTHCARE INDUSTRY AND ITS USE OF INFORMATION TECHNOLOGY

CHINA CAN BENEFIT FROM THE U.S. H.I.T. EXPERIENCECHINA CAN BENEFIT FROM THE U.S. H.I.T. EXPERIENCE

A GOOD APPROACH FOR SUCCESSFULLY IMPLEMENTING MAJOR I.T. SYSTEM A GOOD APPROACH FOR SUCCESSFULLY IMPLEMENTING MAJOR I.T. SYSTEM UPGRADES AND CHANGESUPGRADES AND CHANGES

DISCUSSIONDISCUSSION


THE DORENFEST GROUPTHE DORENFEST GROUP

HEALTHCARE CONSULTING AND INVESTMENT FOCUSHEALTHCARE CONSULTING AND INVESTMENT FOCUS

OFFER HEALTHCARE IMPROVEMENT SERVICES TO SUPPORT A MORE POSITIVE OFFER HEALTHCARE IMPROVEMENT SERVICES TO SUPPORT A MORE POSITIVE WORLD FUTUREWORLD FUTURE

HELP HEALTHCARE ORGANIZATIONS TO IMPROVE HEALTHCARE SERVICES HELP HEALTHCARE ORGANIZATIONS TO IMPROVE HEALTHCARE SERVICES WHILE REDUCING COSTS BY IMPROVING WORK PROCESSES, MANAGEMENT WHILE REDUCING COSTS BY IMPROVING WORK PROCESSES, MANAGEMENT SYSTEMS, SERVICES TO PATIENTS, AND QUALITY OF MEDICAL CARESYSTEMS, SERVICES TO PATIENTS, AND QUALITY OF MEDICAL CARE

IN 2006 THE DORENFEST GROUP FORMED THE DORENFEST CHINA IN 2006 THE DORENFEST GROUP FORMED THE DORENFEST CHINA HEALTHCARE GROUP, BASED IN SHANGHAI, TO BRING OUR SKILL, HEALTHCARE GROUP, BASED IN SHANGHAI, TO BRING OUR SKILL, TECHNOLOGY, AND CAPITAL TO CHINA IN A TWO-PHASE PROGRAMTECHNOLOGY, AND CAPITAL TO CHINA IN A TWO-PHASE PROGRAM

WE ARE NOW OPERATING IN PHASE 1 OF THIS PROGRAM, OFFERING A VARIETY WE ARE NOW OPERATING IN PHASE 1 OF THIS PROGRAM, OFFERING A VARIETY OF CONSULTING, TRAINING, AND EDUCATION SERVICES TO THE CHINA OF CONSULTING, TRAINING, AND EDUCATION SERVICES TO THE CHINA HEALTHCARE SYSTEMHEALTHCARE SYSTEM

WE EXPECT TO ENTER PHASE 2 OF OUR ACTIVITIES IN CHINA IN 2008 WHEN WE WE EXPECT TO ENTER PHASE 2 OF OUR ACTIVITIES IN CHINA IN 2008 WHEN WE WILL BEGIN TO MAKE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS WILL BEGIN TO MAKE INVESTMENTS IN WELL-DEFINED, GOOD BUSINESS PROJECTS, IN PARTNERSHIP WITH CHINESE HEALTH BUREAUS AND HOSPITALS PROJECTS, IN PARTNERSHIP WITH CHINESE HEALTH BUREAUS AND HOSPITALS


BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T.BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T.

FORMED COMPUCARE 1969; CEO 1969-1976FORMED COMPUCARE 1969; CEO 1969-1976

FORMED SHELDON I. DORENFEST & ASSOCIATES, LTD. IN 1976; CEO 1976-2004FORMED SHELDON I. DORENFEST & ASSOCIATES, LTD. IN 1976; CEO 1976-2004

– LONG, RICH HISTORY OF MAJOR CONTRIBUTIONS TO HEALTHCARE I.T. LONG, RICH HISTORY OF MAJOR CONTRIBUTIONS TO HEALTHCARE I.T. UNDERSTANDING AND PROGRESSUNDERSTANDING AND PROGRESS

– WAS RECOGNIZED AS THE LEADING SOURCE OF INFORMATION ABOUT WAS RECOGNIZED AS THE LEADING SOURCE OF INFORMATION ABOUT HEALTHCARE I.T. AND A LEADING HEALTHCARE CONSULTING FIRMHEALTHCARE I.T. AND A LEADING HEALTHCARE CONSULTING FIRM

– KEY BUSINESS UNITS INCLUDED THE DORENFEST INTEGRATED KEY BUSINESS UNITS INCLUDED THE DORENFEST INTEGRATED HEALTHCARE SYSTEM DATABASE™ AND HOSPITAL OPERATIONS HEALTHCARE SYSTEM DATABASE™ AND HOSPITAL OPERATIONS IMPROVEMENT AND MEDICAL SUPPLIER CONSULTINGIMPROVEMENT AND MEDICAL SUPPLIER CONSULTING

SOLD THE DORENFEST INTEGRATED HEALTHCARE DELIVERY SYSTEM+ (IHDS+) SOLD THE DORENFEST INTEGRATED HEALTHCARE DELIVERY SYSTEM+ (IHDS+) DATABASE™ TO HIMSS ANALYTICS IN JULY, 2004DATABASE™ TO HIMSS ANALYTICS IN JULY, 2004


BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T. (CONTINUED) BRIEF SUMMARY OF SHELDON’S PAST EXPERIENCE IN H.I.T. (CONTINUED)

DONATED SHELDON I. DORENFEST & ASSOCIATES, LTD. TO THE HIMSS FOUNDATION DONATED SHELDON I. DORENFEST & ASSOCIATES, LTD. TO THE HIMSS FOUNDATION TO FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY TO FORM THE DORENFEST INSTITUTE FOR HEALTH INFORMATION TECHNOLOGY RESEARCH AND EDUCATIONRESEARCH AND EDUCATION

– THE DORENFEST INSTITUTE CONTAINS A LIBRARY OF HISTORIC DATA AND THE DORENFEST INSTITUTE CONTAINS A LIBRARY OF HISTORIC DATA AND PUBLICATIONS FROM 1986 THROUGH 2004 WITH HIMSS ANALYTICS DONATING PUBLICATIONS FROM 1986 THROUGH 2004 WITH HIMSS ANALYTICS DONATING THE NEXT CURRENT YEAR OF DATA ANNUALLYTHE NEXT CURRENT YEAR OF DATA ANNUALLY

– PROVIDES FREE DATA FOR RESEARCH PURPOSES ELECTRONICALLY AND IN PROVIDES FREE DATA FOR RESEARCH PURPOSES ELECTRONICALLY AND IN PRINT TO UNIVERSITIES, STUDENTS, FEDERAL, STATE, LOCAL GOVERNMENT PRINT TO UNIVERSITIES, STUDENTS, FEDERAL, STATE, LOCAL GOVERNMENT AS WELL AS GOVERNMENTS OF OTHER COUNTRIES AS WELL AS GOVERNMENTS OF OTHER COUNTRIES

– PROVIDES A VARIETY OF FREE REPORTS ON TRENDS IN H.I.T. USEPROVIDES A VARIETY OF FREE REPORTS ON TRENDS IN H.I.T. USE

– ENCOURAGES ONGOING RESEARCH INTO USING I.T. TO IMPROVE HEALTHCAREENCOURAGES ONGOING RESEARCH INTO USING I.T. TO IMPROVE HEALTHCARE


DORENFEST ACTIVITIES IN OTHER COUNTRIESDORENFEST ACTIVITIES IN OTHER COUNTRIES

CONDUCT MARKET STUDIES AND CONSULTING ASSIGNMENTS ON USE OF CONDUCT MARKET STUDIES AND CONSULTING ASSIGNMENTS ON USE OF INFORMATION TECHNOLOGY IN HEALTH CARE IN A NUMBER OF COUNTRIESINFORMATION TECHNOLOGY IN HEALTH CARE IN A NUMBER OF COUNTRIES

CONDUCT WORLDWIDE STUDIES COMPARING THE STATE OF THE ART IN CONDUCT WORLDWIDE STUDIES COMPARING THE STATE OF THE ART IN HEALTH CARE I.T.HEALTH CARE I.T.

CONTINUOUSLY MONITOR AND UPDATE OUR UNDERSTANDING OF CONTINUOUSLY MONITOR AND UPDATE OUR UNDERSTANDING OF WORLDWIDE HEALTH CARE I.T. THROUGH A VARIETY OF ONGOING WORLDWIDE HEALTH CARE I.T. THROUGH A VARIETY OF ONGOING ACTIVITIES:ACTIVITIES:

– IN-PERSON AND TELEPHONE DISCUSSIONS WITH NUMEROUS HOSPITAL IN-PERSON AND TELEPHONE DISCUSSIONS WITH NUMEROUS HOSPITAL EXECUTIVES AND I.T. SUPPLIER PERSONNELEXECUTIVES AND I.T. SUPPLIER PERSONNEL

– REVIEW OF I.T. IN USE AT HOSPITALS THROUGHOUT THE WORLDREVIEW OF I.T. IN USE AT HOSPITALS THROUGHOUT THE WORLD

WORLDWIDE EDUCATIONAL SERVICESWORLDWIDE EDUCATIONAL SERVICES


DORENFEST INVESTIGATION OF HEALTHCARE IN CHINADORENFEST INVESTIGATION OF HEALTHCARE IN CHINA

1.1. VISITED 17 CITIES IN CHINAVISITED 17 CITIES IN CHINA

2.2. VISITED WITH HUNDREDS OF LEADERS IN THE HEALTHCARE INDUSTRY IN CHINA TO VISITED WITH HUNDREDS OF LEADERS IN THE HEALTHCARE INDUSTRY IN CHINA TO LEARN ABOUT HEALTHCARE REFORM IN CHINA – ITS PROGRESS, ITS PROBLEMS, AND LEARN ABOUT HEALTHCARE REFORM IN CHINA – ITS PROGRESS, ITS PROBLEMS, AND ITS NEXT STEPSITS NEXT STEPS

3.3. VISITED WITH OVER 100 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL VISITED WITH OVER 100 HOSPITALS TO GAIN AN UNDERSTANDING OF HOSPITAL OPERATIONS IN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR OPERATIONS IN CHINA, THEIR CURRENT STATUS, AND OPPORTUNITIES FOR IMPROVEMENTSIMPROVEMENTS

4.4. VISITED WITH PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR GOALS VISITED WITH PROVINCIAL AND CITY HEALTH BUREAUS TO LEARN WHAT THEIR GOALS ARE FOR THEIR PROVINCIAL AND CITY HOSPITALSARE FOR THEIR PROVINCIAL AND CITY HOSPITALS

5.5. VISITED PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM VISITED PRIVATE HOSPITALS TO OBSERVE THE RESULTS OF HEALTHCARE REFORM PRIVATIZATION EFFORTS IN CHINAPRIVATIZATION EFFORTS IN CHINA

6.6. VISITED WITH COMPANIES SELLING PRODUCTS AND SERVICES TO THE HEALTHCARE VISITED WITH COMPANIES SELLING PRODUCTS AND SERVICES TO THE HEALTHCARE INDUSTRY IN CHINA AND WHAT THEY BELIEVE ARE APPROPRIATE NEXT STEPS FOR INDUSTRY IN CHINA AND WHAT THEY BELIEVE ARE APPROPRIATE NEXT STEPS FOR REFORMING THE CHINESE HEALTHCARE SYSTEMREFORMING THE CHINESE HEALTHCARE SYSTEM

7.7. EVALUATED A GROUP OF HOSPITAL MANAGEMENT AND OWNERSHIP OPPORTUNITIES EVALUATED A GROUP OF HOSPITAL MANAGEMENT AND OWNERSHIP OPPORTUNITIES THAT WERE PRESENTED TO THE DORENFEST GROUP TO BECOME MORE FAMILIAR WITH THAT WERE PRESENTED TO THE DORENFEST GROUP TO BECOME MORE FAMILIAR WITH THE ALTERNATIVE WAYS TO PROCEED IN BUILDING A “MODEL HOSPITAL” IN CHINATHE ALTERNATIVE WAYS TO PROCEED IN BUILDING A “MODEL HOSPITAL” IN CHINA

8.8. DEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINADEVELOPED A STRATEGY FOR BRINGING DORENFEST SKILL AND EXPERIENCE TO CHINA


A FEW CONCLUSIONS ABOUT THE CURRENT ENVIRONMENT A FEW CONCLUSIONS ABOUT THE CURRENT ENVIRONMENT IN CHINESE HEALTHCAREIN CHINESE HEALTHCARE

1.1. THERE WILL BE RAPID GROWTH IN HEALTHCARE SPENDING AND THERE IS A THERE WILL BE RAPID GROWTH IN HEALTHCARE SPENDING AND THERE IS A STRONG DESIRE TO IMPROVE HEALTHCARE SERVICESSTRONG DESIRE TO IMPROVE HEALTHCARE SERVICES

2.2. THERE IS A DESIRE TO MOVE TOWARD INTERNATIONAL STANDARDS FOR THERE IS A DESIRE TO MOVE TOWARD INTERNATIONAL STANDARDS FOR SERVING THE GROWING MIDDLE CLASS AND WEALTHY POPULATIONSERVING THE GROWING MIDDLE CLASS AND WEALTHY POPULATION

3.3. THERE IS LIMITED SKILL IN CHINA TO ACCOMPLISH CHINA’S HEALTHCARE THERE IS LIMITED SKILL IN CHINA TO ACCOMPLISH CHINA’S HEALTHCARE IMPROVEMENT OBJECTIVESIMPROVEMENT OBJECTIVES

4.4. FOREIGN SKILLS ARE CONSIDERED IMPORTANT AND A FEW UNIVERSITIES FOREIGN SKILLS ARE CONSIDERED IMPORTANT AND A FEW UNIVERSITIES AND HOSPITALS, SUCH AS DUKE, ARE HELPING BY BRINGING THEIR SKILLS TO AND HOSPITALS, SUCH AS DUKE, ARE HELPING BY BRINGING THEIR SKILLS TO CHINACHINA

5.5. BRINGING OUR HEALTHCARE SERVICE IMPROVEMENT SKILLS TO CHINA WILL BRINGING OUR HEALTHCARE SERVICE IMPROVEMENT SKILLS TO CHINA WILL BE VALUABLE TO CHINA AND A GOOD BUSINESS FOR USBE VALUABLE TO CHINA AND A GOOD BUSINESS FOR US


THE DORENFEST GROUP VISION FOR CREATING A MODEL HOSPITAL IN CHINATHE DORENFEST GROUP VISION FOR CREATING A MODEL HOSPITAL IN CHINA

PROVIDES IMPROVED QUALITY OF CARE TO ITS PATIENTSPROVIDES IMPROVED QUALITY OF CARE TO ITS PATIENTS

OPERATES AT A HIGHLY EFFICIENT LEVEL THROUGH EFFECTIVE USE OF OPERATES AT A HIGHLY EFFICIENT LEVEL THROUGH EFFECTIVE USE OF SYSTEMS AND BETTER WORK PROCESSESSYSTEMS AND BETTER WORK PROCESSES

OFFERS ITS SERVICES TO PATIENTS AT AN AFFORDABLE COSTOFFERS ITS SERVICES TO PATIENTS AT AN AFFORDABLE COST

CREATES A HIGHLY SATISFIED PATIENT POPULATION WITH THE PATIENTS CREATES A HIGHLY SATISFIED PATIENT POPULATION WITH THE PATIENTS OBSERVING A NOTICEABLE IMPROVEMENT IN THE SERVICES AND OBSERVING A NOTICEABLE IMPROVEMENT IN THE SERVICES AND TREATMENTS PROVIDED BY THE HOSPITALTREATMENTS PROVIDED BY THE HOSPITAL

UTILIZES APPROPRIATE DIGITAL TECHNOLOGY TO CREATE A STATE OF THE UTILIZES APPROPRIATE DIGITAL TECHNOLOGY TO CREATE A STATE OF THE ART “DIGITAL HOSPITAL”ART “DIGITAL HOSPITAL”


CHINA BUSINESS OPERATIONSCHINA BUSINESS OPERATIONS

HOSPITAL MANAGEMENT CONSULTINGHOSPITAL MANAGEMENT CONSULTING

– OPERATIONS IMPROVEMENTOPERATIONS IMPROVEMENT

– STRATEGIC PLANNING FOR NEW I.T. SYSTEMSSTRATEGIC PLANNING FOR NEW I.T. SYSTEMS

– I.T. SYSTEM SELECTIONI.T. SYSTEM SELECTION

– I.T. SYSTEM IMPLEMENTATIONI.T. SYSTEM IMPLEMENTATION

– WORK PROCESS IMPROVEMENTWORK PROCESS IMPROVEMENT

– MANAGEMENT TRAININGMANAGEMENT TRAINING

– OTHER SERVICESOTHER SERVICES

GENERAL MANAGEMENT CONSULTING FOR HEALTHCARE COMPANIESGENERAL MANAGEMENT CONSULTING FOR HEALTHCARE COMPANIES

– MARKET ANALYSESMARKET ANALYSES

– PRODUCT STRATEGIESPRODUCT STRATEGIES

– MARKET RESEARCHMARKET RESEARCH

HOSPITAL CONTRACT MANAGEMENTHOSPITAL CONTRACT MANAGEMENT

– WORK WITH HOSPITALS NEEDING NEW MANAGEMENT (INTERIM OR WORK WITH HOSPITALS NEEDING NEW MANAGEMENT (INTERIM OR LONG TERM)LONG TERM)

– IMPLEMENT NECESSARY MANAGEMENT PERSONNEL AND SUPPORT SYSTEMSIMPLEMENT NECESSARY MANAGEMENT PERSONNEL AND SUPPORT SYSTEMS

HOSPITAL OWNERSHIP AND IMPROVEMENTHOSPITAL OWNERSHIP AND IMPROVEMENT


CURRENT STATUS OF DORENFEST GROUP CHINACURRENT STATUS OF DORENFEST GROUP CHINA

FORMED DE RUI YI LIAO ZI XUN, A WFOE BASED IN SHANGHAI IN 2006FORMED DE RUI YI LIAO ZI XUN, A WFOE BASED IN SHANGHAI IN 2006

RECENTLY COMPLETED PHASE I PROJECT TO HELP SHENZHEN HEALTH RECENTLY COMPLETED PHASE I PROJECT TO HELP SHENZHEN HEALTH BUREAU PLAN ITS REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL BUREAU PLAN ITS REGIONAL HEALTH NETWORK AND DIGITAL HOSPITAL PROJECTSPROJECTS

DEVELOPING OTHER PROJECT ACTIVITIESDEVELOPING OTHER PROJECT ACTIVITIES

REVIEWING CANDIDATES TO IMPLEMENT MODEL HOSPITAL VISIONREVIEWING CANDIDATES TO IMPLEMENT MODEL HOSPITAL VISION

NOW BUILDING A MANAGEMENT TEAMNOW BUILDING A MANAGEMENT TEAM

DEVELOPING PARTNERING RELATIONSHIPS TO DELIVER SERVICESDEVELOPING PARTNERING RELATIONSHIPS TO DELIVER SERVICES

REVIEWING SOFTWARE SYSTEMS IN CHINA AND OTHER COUNTRIES TO REVIEWING SOFTWARE SYSTEMS IN CHINA AND OTHER COUNTRIES TO DEFINE THE BEST SOFTWARE AVAILABLE FOR IMPLEMENTATION IN CHINA TO DEFINE THE BEST SOFTWARE AVAILABLE FOR IMPLEMENTATION IN CHINA TO PARTNER ON I.T. PROJECTS FOR HOSPITAL CLIENTSPARTNER ON I.T. PROJECTS FOR HOSPITAL CLIENTS


DUKE BEIJING HEALTHCARE LEADERSHIP FORUMDUKE BEIJING HEALTHCARE LEADERSHIP FORUM

THE U.S. HEALTHCARE INDUSTRY AND ITS USE THE U.S. HEALTHCARE INDUSTRY AND ITS USE

OF INFORMATION TECHNOLOGYOF INFORMATION TECHNOLOGY


U.S. HEALTHCARE COSTS AS A PERCENT OF GDP ($ IN BILLIONS)U.S. HEALTHCARE COSTS AS A PERCENT OF GDP ($ IN BILLIONS)

SOURCE: CENTERS FOR MEDICARE AND MEDICAID SERVICESSOURCE: CENTERS FOR MEDICARE AND MEDICAID SERVICES

7.2%

8.8%

10.1%

12.0%

13.4% 13.3%

16.0%

0%

5%

10%

15%

20%

1970 1975 1980 1985 1990 1995 2000 2005 2015

$1,987.7

$75.1

$245.8

$426.8

$696.0

$990.3 $1,299.5

CMS ForecastCMS Forecast

15%

10%

5%

0%

20% $4,043.6

19701970 19751975 19801980 19851985 19901990 19951995 20002000 20052005

20.0%

20152015


OPPORTUNITIES TO IMPROVE THE HEALTHCARE DELIVERY PROCESSOPPORTUNITIES TO IMPROVE THE HEALTHCARE DELIVERY PROCESSHAVE BEEN PURSUED FOR MANY YEARSHAVE BEEN PURSUED FOR MANY YEARS

GREAT REDUNDANCY OF INFORMATIONGREAT REDUNDANCY OF INFORMATION

HIGH ERROR POTENTIALHIGH ERROR POTENTIAL

LACK OF TIMELINESSLACK OF TIMELINESS

HIGH COSTHIGH COST

ORGANIZATION COMPLEXITYORGANIZATION COMPLEXITY


HOSPITALS SEEK THE E.H.R. AS THE HOLY GRAIL THROUGH FOUR HOSPITALS SEEK THE E.H.R. AS THE HOLY GRAIL THROUGH FOUR GENERATIONS OF I.T. SYSTEMSGENERATIONS OF I.T. SYSTEMS

FINANCE SYSTEMS (1970s)FINANCE SYSTEMS (1970s)

LIMITED CLINICAL SYSTEMS (LATE 1970s AND 1980s)LIMITED CLINICAL SYSTEMS (LATE 1970s AND 1980s)

MORE ADVANCED CLINICAL SYSTEMS (1990s)MORE ADVANCED CLINICAL SYSTEMS (1990s)

ELECTRONIC HEALTH RECORDS (2000s)ELECTRONIC HEALTH RECORDS (2000s)


HEALTHCARE REFORM BROUGHT HEALTHCARE REFORM BROUGHT INTEGRATED DELIVERYINTEGRATED DELIVERY AND MANAGED CAREAND MANAGED CARE

Hospital A

Doctor’s Office Doctor’s Office

GovernmentReimbursement

Blood BankHome Health Agency

Hospital B

Patient DataDoctor’s Office

Insurance Payor

Nursing Home

Outpatient Clinic

Outpatient Clinic

Outpatient Clinic


$ in billions

$16.0

$19.0$21.6

$20.0

Actual

$18.5

17.6% 15.6% 2.7%ANNUALGROWTH RATE: 8.0%5.2%

$23.6$25.8

Forecast 2006

9.3% 9.3%

$28.0

8.9%

$30.5

8.9%

H.I.T. MARKET TRENDS ($ IN BILLIONS)H.I.T. MARKET TRENDS ($ IN BILLIONS)

$13.6

17.2%

$11.6$10.0

$8.5$7.5

16.0%17.6%13.3%6.7%

SOURCE: SHELDON I. DORENFEST & ASSOCIATES, LTD.SOURCE: SHELDON I. DORENFEST & ASSOCIATES, LTD.


POORLY IMPLEMENTED CHANGE HAS LAYERED REDUNDANT WORK STEPS POORLY IMPLEMENTED CHANGE HAS LAYERED REDUNDANT WORK STEPS ON TOP OF ORIGINAL INEFFICIENCYON TOP OF ORIGINAL INEFFICIENCY

Legacy I.T. Systems

ManualManual BEFORE I.T.=1x

2x

3x

4x

GROWTH IN GROWTH IN

REDUNDANCYREDUNDANCY

TOTAL HOSPITAL WORK PROCESSTOTAL HOSPITAL WORK PROCESS


U.S. HAS MADE MUCH MORE PROGRESS RECENTLYU.S. HAS MADE MUCH MORE PROGRESS RECENTLY

TODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOETODAY OVER 100 HOSPITALS HAVE IMPLEMENTED CPR WITH CPOE

MANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOWMANY OTHERS ARE IMPLEMENTING CPR AND CPOE RIGHT NOW

I.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCEI.T. IS A MAJOR TOOL FOR IMPROVING HOSPITAL PERFORMANCE


BUT U.S. HOSPITALS HAVE BEEN INEFFICIENT INVESTORSBUT U.S. HOSPITALS HAVE BEEN INEFFICIENT INVESTORS

OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT OVERSIMPLIFICATION OF I.T. INVESTMENT CONSIDERATIONS (I.E., DID NOT KNOW WHAT THEY DID NOT KNOW)KNOW WHAT THEY DID NOT KNOW)

POOR PROJECT PLANNINGPOOR PROJECT PLANNING

IMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIESIMPROPER ASSESSMENT OF SOFTWARE PRODUCT CAPABILITIES

IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY IMPLEMENTED A SERIES OF “1/2 SYSTEMS” WITHOUT PROPERLY REDESIGNING THE WORK PROCESSREDESIGNING THE WORK PROCESS

INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, INDUSTRY MANAGEMENT DID NOT LEARN ENOUGH FROM PAST MISTAKES, AND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKESAND THEREFORE, CONTINUED TO REPEAT THE SAME MISTAKES

THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR THIS LEFT THE NATION WITH REDUNDANT, CONVOLUTED, EXPENSIVE, ERROR PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S PRONE WORK PROCESSES THAT PRESENTLY CRIPPLE THE COUNTRY’S HEALTHCARE SYSTEMHEALTHCARE SYSTEM



CHINA CAN BENEFIT FROM THE U.S. CHINA CAN BENEFIT FROM THE U.S. H.I.T. EXPERIENCEH.I.T. EXPERIENCE


INTRODUCTION TO CHINAINTRODUCTION TO CHINA

WHEN I FIRST CAME TO STUDY THE HEALTHCARE INDUSTRY IN CHINA IN LATE 2004, WHEN I FIRST CAME TO STUDY THE HEALTHCARE INDUSTRY IN CHINA IN LATE 2004, ATTITUDES TOWARD H.I.T. WERE VERY CONSERVATIVE:ATTITUDES TOWARD H.I.T. WERE VERY CONSERVATIVE:

– HOSPITAL MANAGEMENT WAS NOT HAPPY WITH I.T. SYSTEMS IN USEHOSPITAL MANAGEMENT WAS NOT HAPPY WITH I.T. SYSTEMS IN USE

– FUNCTIONALITY OF APPLICATION SOFTWARE AVAILABLE FOR PURCHASE IN FUNCTIONALITY OF APPLICATION SOFTWARE AVAILABLE FOR PURCHASE IN CHINA WAS VERY LIMITED AND THE MOST FUNCTIONAL SYSTEMS WERE CHINA WAS VERY LIMITED AND THE MOST FUNCTIONAL SYSTEMS WERE SELF-DEVELOPEDSELF-DEVELOPED

– THE SKILLS TO MANAGE MAJOR I.T. UPGRADES WERE FELT TO BE IN SHORT THE SKILLS TO MANAGE MAJOR I.T. UPGRADES WERE FELT TO BE IN SHORT SUPPLYSUPPLY

– AS A RESULT, HOSPITAL MANAGEMENT WAS HESITANT TO MAKE MAJOR AS A RESULT, HOSPITAL MANAGEMENT WAS HESITANT TO MAKE MAJOR UPGRADES TO I.T. SYSTEMSUPGRADES TO I.T. SYSTEMS

– AT THAT TIME, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. AT THAT TIME, THERE WAS VERY LIMITED BUYING OF MAJOR NEW I.T. SYSTEMS IN CHINESE HOSPITALSSYSTEMS IN CHINESE HOSPITALS

DURING THE PAST 2 YEARS, THE SITUATION HAS CHANGEDDURING THE PAST 2 YEARS, THE SITUATION HAS CHANGED

– MANY HOSPITALS ARE CONSIDERING MAJOR UPGRADES OF I.T. SYSTEMSMANY HOSPITALS ARE CONSIDERING MAJOR UPGRADES OF I.T. SYSTEMS

– BIG BUDGETS ARE STARTING TO BECOME AVAILABLE TO MOVE TOWARD BIG BUDGETS ARE STARTING TO BECOME AVAILABLE TO MOVE TOWARD DIGITAL HOSPITALS WITH ELECTRONIC MEDICAL RECORDS, PACS AND DIGITAL HOSPITALS WITH ELECTRONIC MEDICAL RECORDS, PACS AND OTHER SYSTEMSOTHER SYSTEMS

– BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE BUT WEAK APPLICATION SOFTWARE AND IMPLEMENTATION SKILLS ARE DELAYING PROGRESSDELAYING PROGRESS


CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATIONCHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION

CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT AND ERROR PRONE CHINA HOSPITAL WORK PROCESSES ARE REDUNDANT AND ERROR PRONE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT THROUGH APPROPRIATE WITH GREAT OPPORTUNITIES FOR IMPROVEMENT THROUGH APPROPRIATE USE OF I.T.USE OF I.T.

CHINESE HOSPITALS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN CHINESE HOSPITALS WOULD LIKE TO TAKE A BIG LEAP FORWARD IN IMPROVING WORK PROCESSES AND IN DIGITIZING ITS HOSPITALSIMPROVING WORK PROCESSES AND IN DIGITIZING ITS HOSPITALS

THE MINISTRY OF HEALTH’S GUIDELINES FOR HEALTH I.T. DEVELOPMENT THE MINISTRY OF HEALTH’S GUIDELINES FOR HEALTH I.T. DEVELOPMENT (2003-2010) CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL (2003-2010) CALLS FOR ELECTRONIC MEDICAL RECORDS AND REGIONAL HEALTH NETWORKS TO BE IMPLEMENTED PROVIDING MUCH MOMENTUM FOR HEALTH NETWORKS TO BE IMPLEMENTED PROVIDING MUCH MOMENTUM FOR HOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOWHOSPITALS AND HEALTH BUREAUS TO INVEST MORE IN I.T. NOW

CHINA HAS NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND CHINA HAS NOT INVESTED A LOT OF RESOURCES IN I.T. SYSTEMS AND INFRASTRUCTURE TO GET TO ITS PRESENT LEVEL OF I.T. USE. WHILE CHINA INFRASTRUCTURE TO GET TO ITS PRESENT LEVEL OF I.T. USE. WHILE CHINA WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS WOULD LIKE TO CONTINUE THIS APPROACH AS IT TAKES ITS NEXT STEPS FORWARD, CHINA’S I.T. GOALS WILL REQUIRE GREATER INVESTMENTFORWARD, CHINA’S I.T. GOALS WILL REQUIRE GREATER INVESTMENT


CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION (CONTINUED)CHINA HEALTHCARE I.T. IS MOVING TO ITS SECOND GENERATION (CONTINUED)

THERE IS CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE READINESS OF THERE IS CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE READINESS OF H.I.T. SOFTWARE PRODUCTS, HARDWARE PLATFORMS, AND INTEGRATION TOOLS H.I.T. SOFTWARE PRODUCTS, HARDWARE PLATFORMS, AND INTEGRATION TOOLS TO FACILITATE THE ACCOMPLISHMENT OF CHINA’S GOALSTO FACILITATE THE ACCOMPLISHMENT OF CHINA’S GOALS

THERE IS ALSO CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE THERE IS ALSO CONCERN AMONG H.I.T. EXPERTS IN CHINA ABOUT THE IMPLEMENTATION SKILL AND EXPERIENCE AVAILABLE IN CHINA TO TAKE THIS BIG IMPLEMENTATION SKILL AND EXPERIENCE AVAILABLE IN CHINA TO TAKE THIS BIG LEAP FORWARD THAT IS NOW UNDERWAYLEAP FORWARD THAT IS NOW UNDERWAY

SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING SO CHINESE HOSPITALS AND HEALTH BUREAUS ARE CAREFULLY CONSIDERING HOW TO TAKE THEIR NEXT STEPS SUCCESSFULLYHOW TO TAKE THEIR NEXT STEPS SUCCESSFULLY

FOR CHINA TO ACCOMPLISH ITS OBJECTIVE SUCCESSFULLY REQUIRES THE FOR CHINA TO ACCOMPLISH ITS OBJECTIVE SUCCESSFULLY REQUIRES THE FOLLOWING:FOLLOWING:

– OVERCOMING RESISTANCE TO CHANGEOVERCOMING RESISTANCE TO CHANGE

– KNOWING HOW TO MANAGE CHANGEKNOWING HOW TO MANAGE CHANGE

– LEARNING FROM THE U.S. EXPERIENCELEARNING FROM THE U.S. EXPERIENCE

– DOING MORE OF WHAT THE U.S. DID RIGHT AND NOT MAKING U.S. MISTAKES DOING MORE OF WHAT THE U.S. DID RIGHT AND NOT MAKING U.S. MISTAKES

– DEVELOPING EXPERTISE IN AREAS OF NEED DEVELOPING EXPERTISE IN AREAS OF NEED



A GOOD APPROACH TO SUCCESSFULLY A GOOD APPROACH TO SUCCESSFULLY IMPLEMENTING MAJOR I.T. UPGRADESIMPLEMENTING MAJOR I.T. UPGRADES


THE I.T. UPGRADE PROJECT SHOULD BE DONE IN PHASESTHE I.T. UPGRADE PROJECT SHOULD BE DONE IN PHASES

1.1. STRATEGIC PLANSTRATEGIC PLAN

2.2. SYSTEM SELECTION WITH FINAL IMPLEMENTATION PLANSYSTEM SELECTION WITH FINAL IMPLEMENTATION PLAN

3.3. SYSTEM IMPLEMENTATIONSYSTEM IMPLEMENTATION


STRATEGIC PLANNING PHASESTRATEGIC PLANNING PHASE

1.1. ESTABLISH A PLANNING COMMITTEEESTABLISH A PLANNING COMMITTEE

2.2. GAIN THOROUGH UNDERSTANDING OF THE CURRENT OPERATIONS AND GAIN THOROUGH UNDERSTANDING OF THE CURRENT OPERATIONS AND WORK FLOW OF THE HOSPITALWORK FLOW OF THE HOSPITAL

3.3. IDENTIFY OPPORTUNITIES TO IMPROVE OPERATIONS AND WORK FLOW IDENTIFY OPPORTUNITIES TO IMPROVE OPERATIONS AND WORK FLOW THROUGH NEW I.T. SYSTEMSTHROUGH NEW I.T. SYSTEMS

4.4. DEFINE THE VALUE OF THE OPPORTUNITIES FOR IMPROVEMENT IN TERMS OF DEFINE THE VALUE OF THE OPPORTUNITIES FOR IMPROVEMENT IN TERMS OF THE FOLLOWING AREAS:THE FOLLOWING AREAS:

− REVENUE IMPROVEMENTREVENUE IMPROVEMENT

− TIME SAVINGSTIME SAVINGS

− OTHER COST REDUCTIONOTHER COST REDUCTION

− REDUCTION OF ERRORSREDUCTION OF ERRORS

− OTHER QUALITY OF CARE IMPROVEMENTSOTHER QUALITY OF CARE IMPROVEMENTS

− RAISING LEVEL OF PATIENT SATISFACTIONRAISING LEVEL OF PATIENT SATISFACTION

5.5. SELECT THE HIGHEST PRIORITY IMPROVEMENTS FOR IMPLEMENTATIONSELECT THE HIGHEST PRIORITY IMPROVEMENTS FOR IMPLEMENTATION

6.6. DEFINE THE NEEDED I.T. SYSTEMS AND CHANGES IN WORK FLOW DEFINE THE NEEDED I.T. SYSTEMS AND CHANGES IN WORK FLOW PROCESSES TO ACCOMPLISH THE IMPROVEMENTSPROCESSES TO ACCOMPLISH THE IMPROVEMENTS

7.7. DEFINE USER ATTITUDES TOWARD AND TECHNICAL LIMITATIONS OF DEFINE USER ATTITUDES TOWARD AND TECHNICAL LIMITATIONS OF CURRENT I.T. SYSTEMS AND DETERMINE REPLACEMENT REQUIREMENTSCURRENT I.T. SYSTEMS AND DETERMINE REPLACEMENT REQUIREMENTS


STRATEGIC PLANNING PHASE (CONTINUED)STRATEGIC PLANNING PHASE (CONTINUED)

8.8. DECIDE WHETHER TO BUY OR DEVELOP THE I.T. SYSTEM UPGRADEDECIDE WHETHER TO BUY OR DEVELOP THE I.T. SYSTEM UPGRADE

9.9. PROVIDE THE NECESSARY EDUCATION TO HOSPITAL MANAGEMENT, PROVIDE THE NECESSARY EDUCATION TO HOSPITAL MANAGEMENT, PHYSICIANS, I.T. USERS, AND I.T. STAFF SO THAT THEY CAN BETTER PHYSICIANS, I.T. USERS, AND I.T. STAFF SO THAT THEY CAN BETTER UNDERSTAND THE REQUIREMENTS TO SUCCESSFULLY MANAGE THE CHANGEUNDERSTAND THE REQUIREMENTS TO SUCCESSFULLY MANAGE THE CHANGE

10.10. CREATE AN ECONOMIC ANALYSIS SUMMARIZING EXPECTED COSTS AND CREATE AN ECONOMIC ANALYSIS SUMMARIZING EXPECTED COSTS AND BENEFITS OF THE CHANGE PROGRAMBENEFITS OF THE CHANGE PROGRAM

11.11. GAIN GENERAL APPROVAL FROM HOSPITAL MANAGEMENT TEAMGAIN GENERAL APPROVAL FROM HOSPITAL MANAGEMENT TEAM

12.12. FINALIZE A STRATEGIC PLAN TO IMPLEMENT THE OPERATIONS IMPROVEMENT FINALIZE A STRATEGIC PLAN TO IMPLEMENT THE OPERATIONS IMPROVEMENT PROGRAMPROGRAM


SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASESYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE

1.1. ESTABLISH A SELECTION COMMITTEE OF KEY USERS, I.T. PERSONNEL, AND ESTABLISH A SELECTION COMMITTEE OF KEY USERS, I.T. PERSONNEL, AND MANAGEMENTMANAGEMENT

2.2. PREPARE A FUNCTIONAL REQUIREMENTS DOCUMENT DEFINING THE OBJECTIVES, PREPARE A FUNCTIONAL REQUIREMENTS DOCUMENT DEFINING THE OBJECTIVES, FEATURES, TECHNICAL REQUIREMENTS, AND ANY OTHER KEY CHARACTERISTICS FEATURES, TECHNICAL REQUIREMENTS, AND ANY OTHER KEY CHARACTERISTICS OF THE NEW SYSTEMOF THE NEW SYSTEM

3.3. PREPARE A TENDER REQUEST (REQUEST FOR VENDOR PROPOSALS)PREPARE A TENDER REQUEST (REQUEST FOR VENDOR PROPOSALS)

4.4. DEVELOP EVALUATION CRITERIA AND APPROACHDEVELOP EVALUATION CRITERIA AND APPROACH

5.5. COMPARE AND EVALUATE PROPOSALSCOMPARE AND EVALUATE PROPOSALS

6.6. FOR LEADING SUPPLIERS:FOR LEADING SUPPLIERS:

–– CONDUCT VENDOR SYSTEM DEMONSTRATIONS USING PREPARED CONDUCT VENDOR SYSTEM DEMONSTRATIONS USING PREPARED SCRIPTSSCRIPTS

–– CONDUCT TELEPHONE REFERENCE CHECKSCONDUCT TELEPHONE REFERENCE CHECKS

–– CONDUCT USER SITE VISITSCONDUCT USER SITE VISITS


SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE (CONTINUED)SYSTEM SELECTION AND IMPLEMENTATION PLAN PHASE (CONTINUED)

7.7. MAKE FINAL SELECTIONMAKE FINAL SELECTION

8.8. BEGIN NEGOTIATING CONTRACTBEGIN NEGOTIATING CONTRACT

9.9. DEVELOP DETAILED IMPLEMENTATION PLAN WITH OVERALL GOALS, DEVELOP DETAILED IMPLEMENTATION PLAN WITH OVERALL GOALS, ORGANIZATIONAL REQUIREMENTS, SPECIFIC TASKS, TIMETABLE BY TASK, ORGANIZATIONAL REQUIREMENTS, SPECIFIC TASKS, TIMETABLE BY TASK, AND STAFFING RESPONSIBILITY FOR EACH TASKAND STAFFING RESPONSIBILITY FOR EACH TASK

10.10. DEVELOP MANAGEMENT PROCESS FOR OVERSEEING THE IMPLEMENTATIONDEVELOP MANAGEMENT PROCESS FOR OVERSEEING THE IMPLEMENTATION

11.11. FINALIZE THE CONTRACTFINALIZE THE CONTRACT


SYSTEM IMPLEMENTATIONSYSTEM IMPLEMENTATION

START IMPLEMENTING PLANSTART IMPLEMENTING PLAN

MONITOR RESULTSMONITOR RESULTS

MAKE NECESSARY ADJUSTMENTS AND REVISIONSMAKE NECESSARY ADJUSTMENTS AND REVISIONS

KEEP A CLOSE WATCH ON PROGRESS TO MAKE SURE YOU AVOID MAJOR KEEP A CLOSE WATCH ON PROGRESS TO MAKE SURE YOU AVOID MAJOR PROBLEMSPROBLEMS


THANK YOU.THANK YOU.FOR MORE INFORMATION CONTACT:FOR MORE INFORMATION CONTACT:

SHELDON I. DORENFESTSHELDON I. DORENFEST

THE DORENFEST CHINA THE DORENFEST CHINA THE DORENFEST GROUPTHE DORENFEST GROUPHEALTHCARE GROUPHEALTHCARE GROUP NBC TOWER, SUITE 2725NBC TOWER, SUITE 2725RENMIN ROAD NO. 988RENMIN ROAD NO. 988 455 N. CITYFRONT PLAZA. DRIVE 455 N. CITYFRONT PLAZA. DRIVEJINGTIANDI INTERNATIONAL TOWERJINGTIANDI INTERNATIONAL TOWER CHICAGO, IL 60611-5555 CHICAGO, IL 60611-5555SUITE 908 SUITE 908 UNITED STATES OF AMERICAUNITED STATES OF AMERICASHANGHAI, CHINASHANGHAI, CHINA PHONE: 312-464-3000 PHONE: 312-464-3000PHONE: 13816109802PHONE: 13816109802 FAX: 312-467-0541FAX: 312-467-0541

WEB SITE ADDRESS: WEB SITE ADDRESS: www.dorenfest.comwww.dorenfest.com

SHELDON’S E-MAIL ADDRESS: SHELDON’S E-MAIL ADDRESS: [email protected]@dorenfest.com

E-MAIL ADDRESS: E-MAIL ADDRESS: [email protected]@dorenfest.com

DUKE BEIJING HEALTHCARE LEADERSHIP FORUM THE DORENFEST CHINA HEALTHCARE GROUP Duke Beijing...

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