The Future Health Ecosystem Today - Cascadia Capital · 2019-01-22 · Big Data Patient Engagement...
Transcript of The Future Health Ecosystem Today - Cascadia Capital · 2019-01-22 · Big Data Patient Engagement...
The Future Health Ecosystem Today
1 | @chasedave
> The Future Health Ecosystem Today
> Current Problems
> Clinical Care
> Patient-Centric Care
> Wellness & Prevention
> Overview of Cascadia Capital
CONTENTS
2 | @chasedave
THE FUTURE HEALTH ECOSYSTEM TODAY
3 | @chasedave
THE FUTURE HEALTH ECOSYSTEM WILL FOCUS ON THE TRUE DRIVERS OF OUTCOMES
Source: RWJF/UWPHI.3
GENETICS DIET & EXERCISE
TOBACCO USE
ALCOHOL & DRUG USE
SLEEP SEXUALACTIVITY ACCESS
TO CAREQUALITY OF CARE
EDUCATION EMPLOYMENT INCOME FAMILY/SOCIAL
SUPPORT
COMMUNITY SAFETY
AIR QUALITY
WATER QUALITY
HOUSING TRANSIT
4 | @chasedave
Vector 2:Evidence-Based Decisions
Vector 3:B2C Health
Improvement Programs
Vector 1:Next Generation Primary Care
Sleep Tracking/ Testing:Wearables/Hardware
Personalized Medicine/Genomics
Health Information
Care Navigation
Disease Management
Peer Networks
Health Coaching
Decision-Making Tools
Care Access
Remote Patient Monitoring
Patient Engagement
Wellness Programs
GENETICS DIET & EXERCISE TOBACCO USE ALCOHOL & DRUG USE SLEEP SEXUAL ACTIVITY
Family Support and Self-Help
Patient Groups
Source: RWJF/UWPHI.
5 | @chasedave
Vector 5:Analytics and
Clinical Decision Support
Vector 2:Next Generation
Primary Care
Vector 3:Value-Based Care
Vector 4:Operational Efficiency
Vector 1:Disease-Specific Care Pathways
Transparency
Virtual MedicineRemote Patient
Monitoring
Retail Clinics, DPC
Care Coordination
Patient EngagementBig Data
Personalized Medicine
Medication Management
Nanotechnology
House Calls
Practice Management, EMRs, Pharmacy Management
ACCESS TO CARE QUALITY OF CARE
Tech-Enabled Services
Knowledge Sharing
Source: RWJF/UWPHI.
6 | @chasedave
Advance Directives Programs/Services
Next Gen Benefits
Social Services Access/Management
Vector 1:Equilibrating
Healthcare Expense
Vector 2:Community-Based Health Initiatives
Vector 3:Aging & End-of-
Life Programs
House Calls Hospice Programs
Virtual Medicine
Incentive ProgramsWellness Programs
EDUCATION EMPLOYMENT INCOME FAMILY/SOCIAL SUPPORT
COMMUNITY SAFETY
Early ID and Prevention Programs
Source: RWJF/UWPHI.
7 | @chasedave
GPS-Enabled SensorsVector 1:Targeted
Monitoring and Rapid Response
Vector 2:Community-Based Health
InitiativesFood, Housing and
Transportation Access
Next Generation Public Transport
Environmental Response Mechanisms
Continuous Monitoring (wi-fi, bluetooth, etc.)
Vector 3:Affordable Living
and Access
AIR QUALITY WATER QUALITY HOUSING TRANSIT
Built Environment Design
Broadband Connectivity
Source: RWJF/UWPHI.
8 | @chasedave
Personalized Medicine
Continuous Monitoring of Clinical and Non-Clinical Data
Better Understanding of How Patient Behaviors
Affect Outcomes
Episodic to Real-Time, Micro-Targeted Care
Predictive and Actionable Analytics
Access to Care
Proactive Medicine > Reactive Medicine
Care Coordination
Enhanced Cell Identification and Tracking
THE PREVIOUSLY UNFATHOMABLE WILL BECOME A REALITY
CURRENT PROBLEMS
10 | @chasedave
A STARK IMBALANCE WITH DRAMATIC REPERCUSSIONS
Source: RWJF/UWPHI; Bipartisan Policy Center.
4%Health
Behaviors
8%Other
88%Medical Services
10%Physical
Environment
20%Clinical Care
30%Health
Behaviors
40%Social &
Economic Factors
What Drives Outcomes? Where Do We Spend Money?
Unhealthy Workforce
Collateral Damage Chronic Disease
Obesity
Wasted Spending
Overtreatment
11 | @chasedave
THE SWANS ARE IN THE WATER, BUT WHAT COLOR ARE THEY?
Cadillac Tax A consumer movementis triggered Aging-in-place Medicare pricing expands
to self-insured
Medicare allowed to negotiate with pharma
Tax-exempt healthsystems lose status
State AG’s pursue physician non-competes
The bursting of thehospital bond bubble
Like the newspaper/publishing industry at the internet’s inception, the healthcare industry is on the verge of its transistor moment. Which of today’s healthcare incumbents will fail to survive?
12 | @chasedave
HEALTHCARE’S COLLATERAL DAMAGE IS SIGNIFICANT
> State budgets for healthcare coverage vs other priorities
Mental Health Public Health Education Human ServicesInfrastructure
& HousingLaw &
Public Safety Local Aid
$0 B
$3 B
$6 B
$9 B
$12 B
$15 B
-22% -31%
-12%
-11%
-14%
-13%
-51%
FY01
FY14
GIC, MassHealth & other coverage
+ $5.4b+ 37% −$3.6b
− 17%
Source: Massachusetts Budget and Policy Center; figures all adjusted for GDP growth.
% change
13 | @chasedave
AN UNHEALTHY WORKFORCE BURDENS EMPLOYERS AND ECONOMY
SMOKING
+ $5,800
Additional annual costs per employee with various lifestyle risks
> Lost Revenue$1,900-$2,250
per employee per year
> Lost Employee Time45,000,000 avoidable
sick days per year
> Lost Output$576 billion is lost by the U.S.
economy due to workforce illness
Poor employee health leads to...
And adds costs to employers budgets
DIABETES
+ $4,413OBESITY
+ $4,237HIGH BLOOD PRESSURE
+ $1,077
Source: Berman et al., tobaccocontrol.bmj.com; NBCH, Februrary 2012; Van Nuys et al., American Journal of Health Promotion, May/June 2014; Kowlessar et al., JOEM, May 2011.
14 | @chasedave
OUR POPULATION IS AGING AND SICKER THAN EVER
50+ 65-74
> The U.S. population aged 50+ is expected to grow to 132mm...
2010109mm
2030132mm
203039mm
…and the number aged
65-74 will nearly double
201022mm
$0.75 of
every $1 spent
> Chronic disease is an epidemic that is expected to worsen...
...and account for the vast majority of healthcare expenditures
2010 2030
TOTAL(MM) 149mm 171mmPROPORTION 48% 49%
15 | @chasedave
THIS GENERATION’S TOBACCO: SUGAR AND A SEDENTARY LIFESTYLE
> For every additional serving above the USDA’s recommended 12 tsp sugar per day, a child is 60% more likely to become obese.
4x# of TVs in homeshas QUADRUPLED
2x# of foodservice establishments has DOUBLED
2x 3xSoda consumption has DOUBLED in girls, and
TRIPLED in boys
Obesity in children aged 6-11
1980
6.5%2008
19.6%
2010
1 in 3children are
overweight or obese
1+hrs
7.5 hrsDAILY SCREEN TIME
1.5hrs4.5hrs
for children ages 8-10 (2009)
Soft drink consumption has spiked
1978 2002
16.9 oz/day 26.8 oz/day
12tsp sugar 22tsp HFCS
Source: CDC; Whitehouse.gov.
16 | @chasedave
$210bnUnnecessary Services
$190bnAdministrative Costs
$130bnInefficient
Delivery of Care
$55bnPrevention
Failures
$105bnInflated Prices $75bn
Fraud
U.S. HEALTHCARE WASTE = NETHERLANDS GDP
$765bnin wasted spending
Source: Institute of Medicine (2009 data); The World Bank (2009 data)
17 | @chasedave
AND TOTAL HEALTHCARE SPENDING IS SEVERELY DISPROPORTIONATE
5% of patients
50% of dollars
Source: U.S. Agency for Healthcare Research and Quality.
18 | @chasedave
Angiogram
CT scan, head
Cost per hospital day
Appendectomy
Hip replacement
Coronary artery bypass
LOWER COST PROCEDURES
HIGHER COST
HIGHEST COST
$30 $800
$1000
$1350
$68,000
$100
HIGHER PRICES = HIGHER SPENDINGArgentina, Canada, Chile, India France, Germany, Spain, Switzerland United States
Source: International Federation of Health Plans. Graphic: Wilson Andrews - The Washington Post. Published March 2, 2012.
19 | @chasedave
HIGHER SPENDING ≠ BETTER HEALTH OUTCOMES
Rank Country
1 France
2 Switzerland
3 Denmark
4 Netherlands
5 Australia
6 Canada
7 Germany
8 Norway
9 UK
10 U.S.A
11 New Zealand
Rank Country
1 UK
2 New Zealand
3 Switzerland
4 Canada
5 Norway
6 Australia
7 Netherlands
8 France
9 Denmark
10 U.S.A
11 Germany
Diabetes Extremity Amputation(1=best)
Asthma Mortality (1=best)
2.5xAsthma
6.7xDiabetes
3.0xCongestive Heart Failure
> U.S. chronic disease hospital admissions compared to peer countries
Source: OECD Health Care Quality Indicators Data 2009, data from 2007, compared to Canada; OECD Health Data 2011, The Commonwealth Fund
20 | @chasedave
22
Knee Replacements 1stTonsillectomy 1stMRI Exams 2rdCT Exams 3rd
VOLUME INCENTIVE = OVERTREATMENT AND SPECIALTY-RICH CARE
87.5% of U.S.
physicians are specialists
61.3% OECD average
> HAIs: Longer stays, more provider volume
5
98,987People die annually in
the U.S. from HAIs, more than breast cancer
and prostate cancer COMBINED
Average hospital stay (days)
28k
Prostate Cancer
41k
BreastCancer
99k
HAIs
> USA winning the race for most procedures
Source: GE, JESS3; OECD Health Data 2012.
21 | @chasedave
“Physician burnout climbs 10% in 3 years, hits 55%”- MEDSCAPE
LAYERING BUREAUCRACY ON TOP OF FLAWED SYSTEM, PLACING STRAIN ON ALREADY DISGRUNTLED PHYSICIAN WORKFORCE
Source: Medscape’s 2014 Physician Compensation Report; 2014 Survey of America’s Physicians.
Do not feel fairly compensated50%Would not choose medicine as their career today42%
Plan to accelerate retirement39%Plan to limit access to their practices
44%
Anticipate ICD-10 will cause severe problems in their practice
50% Physicians transitioning tocash-only (2011-2013)100%
CLINICAL CARE
23 | @chasedave
1. Government intervention = catalyst
2. Employers shifting risk and insurers responding to regulation and a new marketplace for covered lives
3. Providers must respond to shifting reimbursement, cost sharing, and volume reallocation> And are beginning to do so in a number of ways
4. The era of open information in healthcare is underway> But there is still a long way to go to begin realizing the value of population health
5. Keeping patients out of the hospital, and on the internet> But an uncertain regulatory landscape is stifling growth
CLINICAL CARE OVERVIEW
24 | @chasedave
GOVERNMENT INTERVENTION = CATALYST
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Mar: PPACA
> HITECH Act: a bonanza for incumbent EHR vendors
Feb: HITECH Act
Jan: ACO Medicare incentives
Oct: CMS payments for VBP
Jan: MLR, Stage 1 of Meaningful Use (MU)
Oct: Open enrollment begins
Jan: Individual Mandate
Medicaid expansion
Dec: Stage 2 of
MU
King v. Burwell
Medicare Access and CHIP Reauthorization Act
Stage 3 of MU
Jan: Cadillac Tax
> ACA driving shift from volume to value
> Cadillac Tax: a bonanzafor health innovators
GOALS
> Access> Standardization > Affordability
25 | @chasedave
EMPLOYERS SHIFTING RISK OR SELF-FUNDING
Percent of Covered Workers Enrolled in a $1,000+ Deductible Plan (Single Coverage by Employer Size) Percentage of Covered Workers in Self-Funded Plans
> ACA Benefits Standards Avoidable Through Self-funding
2009 2013 2000 2014
49% 61%
Source: Kaiser Family Foundation and Health Research & Educations Trust, “Employer Health Benefits 2013 Annual Survey,” August 2013; Gabel JR et al., “Small Employer Perspectives On the Affordable Care Act’t Premiums, SHOP Exchanges, and Self-Insurance,” Health Affairs; The Advisory Board Company.
40%
13%
58%
28%
Essential health benefits
1Modified
community rating
2Guaranteed issue and renewability
3MLR
Requirements
4
26 | @chasedave
95%
TRADITIONAL INSURERS ARE ADMINISTRATIVELY INEFFICIENT, HAVE CAPPED MARGINS, AND ARE IN A NEW BATTLEGROUND FOR CUSTOMERS
MLR Requirement Limiting MarginsPortion of Premium Dollars Mandated for Medical Care
Growth in U.S. Healthcare Workforce (1990-2012)
Portion of growth in doctors
Portion of growth in administrative staff
1DOCTOR
5NURSES
10ADMINS
Source: Bureau of Labor Statistics, NCHS, Himmelstein/Woolhandler analysis of CPS; The Advisory Board Company.
+75%New Market Issuers Offering Qualified
Health Plans On Exchanges
Federally-Facilitated Marketplace (36 states)
State-Based Marketplace (8 states reporting)
191
2014
248
2015
61
2014
67
2015
80%
Individual and Small-Group Markets
Large Group Market
85%
5%
27 | @chasedave
Prominent Employers Using Private Exchanges
172> Private exchange operators as of October 2014
PRIVATE EXCHANGE ENROLLMENT IS FORECASTED TO TAKE OFF
39
19
30
40
2014 2015 2016 2017 2018
Potential Growth Path for Private Exchange Enrollment
(mm lives)
Source: Accenture, “Are You Ready? Private Health Insurance Exchanges are Looming,”; privatehealthexchange.com; The Advisory Board Company.
> Low-wage employers most active to date
> Skilled industries in the wings
ACTIVE EMPLOYEES(MEDICARE ADVANTAGE, MEDIGAP PLANS)
RETIREES
28 | @chasedave
REIMBURSEMENT CUTS DEMAND A CHANGE IN OPERATIONS AND STRATEGY BY PROVIDERS
> Medicare FFS payment cuts and move to alternative reimbursement will be significant
Source: CMS; The Advisory Board Company
$260bnHospital payment rate cuts
(2013-2022)
$415bnTotal FFS rate cuts
(2013-2022)
50%Medicare alternative
payment target (2018)
29 | @chasedave
VOLUMES SHIFTING OUTPATIENT, AND THE GOVERNMENT WILL TAKE CONTROL OF THE INPATIENT SETTING
42% 58%
19%
15%33%25%
6% 2%
2012 2022
Average Inpatient Case Mix by VolumeN=785 hospitals
MEDICARE MEDICAID COMMERCIAL SELF-PAY
Source: “Report to the Congress: Medicare Payment Policy,” MedPAC, March 2014; The Advisory Board Company.
-20 -10 0 10 20 30 40
Neurosurgery
Orthopedics
Vascular Services
Cardiac Services
All Payer Volume Growth Projections(2013-2018)
INPATIENT OUTPATIENT
-11% 11%
16%
15%
17%
-3%
5%
14%
30 | @chasedave
RISK-SHARING AND THE INCORPORATION OF OPERATIONAL EXPERTISE ARE THE FUTURE
Risk-Based Revenue Breakdown (% of providers), N=116
71%
21%5% 3%
13%
39% 38%
10%0%
20%
40%
60%
80%
Under 25% 25-50% 50-75% Over 75%TODAY IN 3 YEARS
20% 25%25%
30%40%
30%
30%
30%25%
70%45%
20% 10%
FY 2013 FY 2014 FY 2015 FY 2016
EFFICIENCY OUTCOMES OF CARE PATIENT EXPERIENCE CLINICAL PROCESS
Medicare VBP Program Domain Weights
OTHER MANDATORY RISK PROGRAMS
HAIPenalties
Readmission Penalties
Source: 2013 Care Transformation Survey, The Advisory Board Company; CMS.
65%of the Medicare VBP
program will depend on quality metrics by 2016
31 | @chasedave
ACO GROWTH HAS RESULTED IN WIDENING REACH, BUT MANY ARE STRUGGLING TO REDUCE SPENDING
MSSP Cohort First-year spending reduction
Growth of Accountable Care Organizations (ACOs)
32 146 253 253109164
205 235
0
200
400
600
1Q12 3Q12 1Q13 3Q13
Medicare Non-Medicare
Source: Leavitt Partners; The Advisory Board Company.
67% Portion of U.S. population in a primary care area with an ACO
Portion of U.S. population treated by an ACO17%
Earned Shared Savings
25%
Reduced Spending But Did Not Earn Shared Savings
22%
Did Not Reduce
Spending53%
32 | @chasedave
High out-of-pocket costs...
COST SHARING BY PAYERS AND PATIENTS BRINGS WITH IT REPERCUSSIONS AND NEW OPPORTUNITY FOR PROVIDERS
> As a result, providers are turning to technologies that can improve referrals, marketing efforts and operational efficiencies, as well as reduce administrative burden.
Source: The Advisory Board Company; Aon Hewitt; “Medical Debt Among People With Health Insurance,” Kaiser Family Foundation; Bankrate.com; National Survey of Employer-Sponsored Health Plans 2014, Mercer.
…discourage utilization
Large medical bills...
…means more bad debt
Can’t meet the higher range of out-of-pocket health cost limits
63%
Don’t have savings to cover a $1,000
ER visit 62%
Americans struggling with medical debt are insured
70%Patients becoming price-sensitive...
…and more likely to shop
Forgoing care when sick or injured because of cost15%
Patients report using home remedies
instead of seeking medical attention
33%
Large employers now offer a price transparency tool77%
Average U.S. Employee will pay:
$2,487out of pocket/yr
$6,600 $13,200
Under ACA, 2015 out-of-pocket cost ceilings:
Worker’s share of costs
52%over last 5 years
33 | @chasedave
PAYERS
CLAIMS COSTS/FINANCE UTILIZATION EMR
PROCEDURES OUTCOMES
PRESCRIPTIONS
SUPPLY CHAIN
• Coordinated care• Improved outcomes• Interoperability• Population health
• Lower costs• Disease prevention• Adherence
SATISFACTION
THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY
TRIAL RESULTS AND EFFICACY SALES AND DRUG HISTORY
• R&D productivity• Trial improvement
• Improving efficacy• Care access• Price transparency
• Convenience and cost• Good health
EXERCISE DATA PURCHASES BEHAVIORS, SOCIAL
DAT
A
PROVIDERS
GO
ALS
PATIENTS
DAT
AG
OAL
S
PHARMA
DATA
GO
ALSD
ATAG
OALS
CLAIMS COSTS
• Payment innovation• Data acquisition• Provider-performance
transparency
• Lowering costs• Reducing claims paid• Winning share• Wellness & prevention
34 | @chasedave
TRADITIONAL PAYERS ARE RESPONDING IN NUMEROUS WAYS
Source: The Advisory Board Company.
Tren
ds ✚ Omni-Channel Understanding and Delivery Model for Reaching Out to and Engaging with Consumers
✚ Relationships and Partnerships with Providers That Support Value-Based Reimbursement Models
✚ Private Cloud Solutions to Better Manage Data Collection, Aggregation, and Analytical Efforts
✚ Data Management and Warehousing
Tech
nolo
gy
Partn
ersh
ips
Health Matters
Cons
olid
atio
n
$38 billionJuly 2015
$1.25bn cost savings
$6.8 billion
July 2015
$52 billionJune 2015
$2bn cost savings$14 billion
March 2015
35 | @chasedave
SHIFT FROM VOLUME TO VALUE IS UNDERWAY, BUT A LONG WAY TO GO
...but many providers still don’t have financial “skin in the game”
47% of value-oriented payments
exclude financial risk
Commercial health plans have dramatically shifted how they pay physicians and hospitals...
% of commercial health plan payments that are value-based
2013 2014
11%
40%
% of patients attributed to a provider with a payment reform contract
2013 2014
2%15%
10% of payments to specialists
are value-oriented
24%of payments to primary care physicians are value-oriented
Source: The Scorecard of Payment Reform 2014, Catalyst for Payment Reform; plans responding represent 65% of commercially-insured lives in the U.S.
36 | @chasedave
WHILE HOSPITALS FOCUS ON M&A, INNOVATORS ARE INNOVATING
Hospital M&A Activity has accelerated Partnerships and Affiliations on the rise
Heart & Vascular Center
Markey Cancer Center
020406080
100120
2009 2010 2011 2012 2013 2014 1Q2015
An incredibly fragmented U.S. hospital system
4,500 acute care hospitals 2,000 hospital companies
...means a perceived opportunity to control costs and coordinate care
Source: Pricewaterhouse Coopers.
37 | @chasedave
PATIENT REGISTRATION CARE COORDINATION INSURANCE ELIGIBILITY VERIFICATION
CODING SCHEDULING PATIENT STATEMENTS
ANALYTICS RCM E-PRESCRIBING
ACCOUNT ALERTS REFERRAL MANAGEMENT DENIAL MANAGEMENT
PROVIDERS ARE BEGINNING TO EMBRACE TECHNOLOGY TO STREAMLINE WORKFLOWS
38 | @chasedave
EHR INCUMBENTS USING TRADITIONAL STRATEGIES TO PROTECT MARKET POSITION
Fragmented Players
23% 9%
2014
CONCERNS
1DATA BLOCKING
2DATA SILOS
3VENDOR LOCK-IN
4POOR INFORMATION EXCHANGE
Source: MedScape EHR Report 2014.
10 YEARS AGO 2014
CONCERNS
39 | @chasedave
VENDORS THAT RESPOND TO POPULATION HEALTH-FOCUSED CUSTOMER NEEDS WILL WIN
Identification of various sub-populations with different needs
Tools that enable collaboration across providers, patients and payers
Tools that aggregate community level data
Ability to gather and incorporate continuous data on total populations
Solutions that analyze clinical, claims, and socioeconomic data
> Identifying, collecting, and utilizing actionable information will be critical
1 2 3
4 5
40 | @chasedave
BUT THERE IS STILL A LONG WAY TO GO TO BEGIN REALIZING THE VALUE OF POPULATION HEALTH
of payers and providers think a national public HIE is at least 10 years away
92%PHYSICIANS
81%HOSPITALS
94%INSURERS/PAYERS
remain meaningfully unconnected in regardsto intelligent interoperability
POPULATION HEALTH REQUIRES CHANGES IN THE BUSINESS MODEL OF CURRENT VENDORS
Open APIs and PaaSfor developers
HIE Application Ecosystem
Rapidly Extended Functional Capabilities
> Firms with a wide offering of population health tools, revenue cycle management services, patient portals, dashboards, and analytics will emerge as the next wave of health IT leaders
In effort to coordinate care, private exchanges will outpace public efforts
Cerner wins DoD contract with interoperability capabilities and partnerships
Epic launches Care Everywhere
Source: Healthcare IT News; HIMSS Analytics.
82%
REALITY TAKEAWAY/RESPONSE
REALITY TAKEAWAY/RESPONSE
41 | @chasedave
VIRTUAL MEDICINE HOLDS PROMISE
74%
Source: CDC; Truven Analytics; Center for Connected Health Policy, as of September 2014; Teladoc.
71%of employer-sponsored ER visits not necessary
417 mm(33%) could be treated
through telehealth
1.25bnAmbulatory care
visits per year in US
Employees are open to virtual care
Currently offer telehealth services
Plan to offer telehealth in coming year
54% of 18-29 Year Olds
49% earn > $71,000
53% work > 35 Hours
And Employers Are Responding
48%
42 | @chasedave
KEEPING PATIENTS OUT OF THE HOSPITAL IS THE NEW GOAL
“I think my job ultimately is to close every one of our hospitals...If it were my wife or my mom or my kids, I never want them in the hospital.” -- David Feinberg, CEO Geisinger Health System
REMOTE PATIENT MONITORING
201426%
of providers utilized some form of RPM
4m
Units
2020>20m
UnitsBlood pressure monitor market share
71%
Mount Sinai accountable care program(Sep 2010 – May 2012) resulted in:
• Paramedics trained for and completing home visits for high-risk patients
• 911 callers offered options besides ER• Nurse health line for non-emergency situations
RE-THINKING OPERATIONS
Admissions43%
ER Visits54%
Source: HIMSS Analytics; Allied Market Research; Berg Insight.
43 | @chasedave
BUT AN UNCERTAIN REGULATORY LANDSCAPE REMAINS
Mental HealthOffice VisitsSmoking Cessation
Substance AbuseWellness VisitProlonged Outpatient
Rural Eligible Facilities
Source: CMS; Center for Connected Health Policy.
FEDERAL LEVEL
Current Medicare Coverage
SERVICES LOCATION
Telehealth Enhancement Act of 2013
Medicare TeleHealth Parity Act of 2015?
Medicare Health Parity Act of 2014
STATE LEVEL
State Medicaid programs that reimburse for:
Live Video Store-and-forward Remote Patient Monitoring47 9 1629
States with telehealth parity laws
8States with proposed parity law
47States that require physician
to be licensed in state of patient
13States with cross-border
telemedicine license
44 | @chasedave
BUT THIS HASN’T SLOWED THE BATTLE TO BUILD A NETWORK
Business Model
Delivery Method Freemium B2C B2B2C
Video/Phone
Kiosks
Text
Store-and-forward
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
46 | @chasedave
PAYER MANAGEMENT/BENEFITS MANAGEMENT
CLINICAL CARE INNOVATORS
MOBILITY, VIRTUAL MEDICINE, AND REMOTE PATIENT MONITORING
CARE COORDINATION / NEW ENTRANTS
47 | @chasedave
CLINICAL CARE INNOVATORS
DATA ANALYTICS AND POPULATION HEALTH PRACTICE MANAGEMENT/RCM/PRODUCTIVITY TOOLS AND POC MANAGEMENT/EHR
48 | @chasedave
$63mm
$50mm
$16mm
$70mm
$58mm
$40mm
2013
WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER
2014
WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER
2015
WORKFLOWS ANALYTICS/PH TELEHEALTH OTHER
$40mm$85mm $29mm
$400mm $100mm $89mm
$78mm $54mm $45mm
$36mm $30mm $30mm
$131mm $125mm
$100mm $41mm
$25mm $21mm
$24mm $15mm
$81mm $50mm
$32mm $24mm
$21mm
$110mm
$82mm
$71mm
$101mm $41mm $19mm
NOTABLE RECENT FINANCINGS
$395mm $120mm $70mm
$55mm $54mm $25mm
$500mm
$178mm
$100mm
PRIVATE PLACEMENTS
49 | @chasedave
IPOs $131mm $261mm $1.3bnBENEFITS WORKFLOWS ANALYTICS
SEPT. 2013 OCT. 2013 APRIL 2014
$75mm $127mm $53mm $600mmWORKFLOWS BENEFITS BENEFITS ANALYTICS
JUNE 2014 JULY 2014 DEC. 2014 FEB. 2015
$223mm $196mm $100mm $157mmWORKFLOWS ANALYTICS WORKFLOWS TELEHEALTH
MAY 2015 JUNE 2015 JUNE 2015 JUNE 2015
NOTABLE RECENT FINANCINGS
50 | @chasedave
PATIENT-CENTRIC CARE
51 | @chasedave
1. Patients become educated price-seekers
> Entrepreneurs are empowering them
2. Decentralized medicine and physician extenders
3. On-demand is making its way to healthcare
4. Healthcare is the next extension of our online lives
5. Patient = center of future health ecosystem
> Stakeholders must respond to this new normal or perish
PATIENT-CENTRIC CARE OVERVIEW
52 | @chasedave
> The number of Americans with an HSA Account is expected to skyrocket
PATIENTS ARE BEING FORCED TO TAKE CONTROL OF THE HEALTHCARE THEY RECEIVE
$1.7bn $15.5bn
2006 2012
17mm 50mm
2014 2020
HSA enrollment in large employer plans
2006
4%
2007
5%
2008
8%
2009
8%
2010
13%
2011
17%
2012
19%
2013
20%
2014
20%
> HDHP/SO Enrollment for Employer-Sponsored Plans
74%
> National HSA assets have grown over 9x from 2006-2012
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2014.
53 | @chasedave
AND SELF SELECTING INTO HIGH DEDUCTIBLE AND LEAN HEALTH PLANS
Annual Deductibles of Individual Plans Selected on eHealth (October 2013-March 2014)
Metal Tiers of Plans Chosen on public exchanges (All Enrollees; October 2013-March 2014)
<$50013% $500-$999
3%
$1,000-$1,99911%
$2,000-$2,9995%
$6,000+38%
Silver64%Gold
9%
Platinum 5%
Catastrophic2%
Bronze 20%
Source: Breakaway Policy Strategies, “Eight Million and Counting: A Deeper Look at Premiums, Cost Sharing and Benefit Design in the New Health Insurance Marketplaces,” May 2014; eHealth, “Health Insurance Price Index Report for Open Enrollment and Q1 2014,” May 2014; HHS Summary Report, May 2014; The Advisory Board Company.
$3,000-$5,99930%
54 | @chasedave
A NEW KIND OF PATIENT IS IN THE WAITING ROOM
> Millennials are beginning to utilize the healthcare system more regularly, with significant consequences for industry stakeholders
0%
25%
50%
75%
100%
1995 1Q 2015
Post-Millennials
Millennials
Gen Xers
Boomers
Silents
Greatest
31% SILENTS
2% GREATEST
49% BOOMERS
18% GEN XERS 34% MILLENNIALS
1% POST-MILLENIALS
34% GEN XERS
29% BOOMERS
2% SILENTS
Source: Pew Research Center.
55 | @chasedave
> Various tools are being created with the goal of improving care navigation and transparency, and empowering and educating the patient-consumer
ENTREPRENEURS ARE RESPONDING
How exactly does my insurance
work?
How much should I be paying?
How do I know who the best doctor is?
My doctor’s hours don’t match my hours.
Can someone explain my condition to me
in normal words?Does my doctor think about me after I leave the office?
56 | @chasedave
0
10
20
30
40
50
60
0
10
20
30
40
50
60
0
10
20
30
40
50
60
TOOLS AIMED AT FIXING PRICE FAILURES ARE EMPOWERING PATIENT-CONSUMERS
Tulsa, OK
$0.6mm 51%
Seattle, WA
$1.1mm 46%
Rockford, IL
$1.0mm 50%
Savi
ngs (
$K)
Total $ Savings Average % Savings
Source: The Zero Card. Representative of procedures completed in 2012-2014; Tusla (n=134), Seattle (n=301), Rockford (n=170).
57 | @chasedave
TOTAL – Big 6
Sites,Market Share 901 50% 457 24% 140 8% 103 6% 80 4% 30 2% 1,711 93%
Health System Affiliations 47 6 4 46 2 3 108
DECENTRALIZED MEDICINE AND PHYSICIAN EXTENDERS ARE THE NEW NORM
> The retail clinic market is highly concentrated and dominated by house-hold names
18% of PCP visits could be handled at retail clinics.> 10 million visits per year by Americans at retail clinics represents only 2% of all primary care encounters.
Annual ED Visits
Non-Urgent ED visits shifted to other care sites
132mm 47mmAnnual PCP
VisitsVisits Eligible for
NP-Led Care
573mm
103mm
Source: CDC/NCHS, “National Ambulatory Medical Care Survey, National Hospital Ambulatory Medical Care Survey.” 2009-2010; The Value Proposition of Retail Clinics, April 2015, RWJF; The Advisory Board Company.
58 | @chasedave
AND A NEW PRIMARY CARE MODEL IS IN THE MAKING> Concierge/DPC practices have grown dramatically since 2005 and offer numerous distinct advantages
Source: Wall Street Journal; Forbes; Oliver Wyman.
48%ER VISITS
2005 2015146
5,500
✚ Number of concierge practices is up 3,700% 80 / 100
COMMON DIAGNOSES COVERED
Why use the equivalent of auto insurance for an oil
change?
NET PROMOTER SCORES
93NPS
51NPS
05,00010,00015,00020,00025,00030,00035,000
0.0
0.5
1.0
1.5
2.0
2.5
Patie
nts
Tran
sact
ion
Vol
ume
($m
m)
Monthly Transaction Volume ($) Patients
41%HOSPITALIZATIONS
25%OUTPATIENTUTILIZATION
59 | @chasedave
While some practices are working with insurers on bundled products for the individual market, in the near future, a national health insurer will team with a national player in primary care, such as Walgreen’s, to offer DPC at scale to consumers via a gym-like monthly membership fee, taking DPC from a niche offering to a new model consumers begin to understand.
TRADITIONAL INSURERS ARE BEGINNING TO EMBRACE DPC, AND OTHERS ARE DRIVING CHANGE
United Food and Commercial Workers UnionUnitedHERE, Atlantic City
Freelancer’s Union, BrooklynCulinary Workers Union, Las Vegas
2012 2013 2014 2015
UNIONS COMPANIES
Source: The Advisory Board Company.
60 | @chasedave
ON-DEMAND IS MAKING ITS WAY TO HEALTHCARE
Heal Pager Medicast Retrace Health
FOUNDED 2014 2014 2013 2013 2014
FEE/SERVICE$99
On site doctor in 1 hour
$200 for urgent care$75-100 for wellness NA $50: NP video consult
$200: in-person $150
REGION Los AngelesSan Francisco
NYCSan Francisco NA Minneapolis Atlanta
TARGET CUSTOMER Adults & Kids Adults & Kids Health Systems Adults & Kids Pediatric Care
61 | @chasedave
FINANCES DOCUMENTS
ACTIVITY SOCIAL=
CONSUMERS ARE BRINGING THEIR LIVES TO THE INTERNET AT A RAPID PACE
62 | @chasedave
AND HEALTHCARE IS NEXT mHealth apps are set to become a regular part of care
86%of clinicians believe mHealthapps will be important for patient health management over next 5 years
90%Use mobile devices to engage patients
app-enabled patient portals
telehealth services
text communicationsremote patient monitoring
73% 62%
57% 49%
7 in 10 U.S. adults track at leastone health indicator
And the means of tracking are remarkably primitive
49%IN HEAD
34%PAPER
8% MEDICAL DEVICE
7%APP
5%SPREADSHEET
1% ONLINE TOOL
Source: Pew Self-Tracking, June 2013; Pew Internet & American Life, January 2014; 2013 Accenture Consumer Electronics Products and Services Usage Report; MedData Group, April 2014; HIMSS 2015 Mobile Technology Survey.
63 | @chasedave
THE PATIENT WILL BE AT THE CENTER OF THE FUTURE HEALTHCARE SYSTEM
FUTURE FOCI:
Primary Physician
Consulting Physician
LabInsurance
Pharmacy
Non-Clinical Activity
Family
Hospital
Post-Acute and Home Care
Ancillary Sites
Personalized treatment
1Controls method and
venue of care delivery
2Shops for quality
and cost
3
64 | @chasedave
CARE EPISODE REIMBURSEMENTTraditional Foci
1. Diagnostics
2. Technology
3. Drugs
4. Beds
5. Procedures
PROVIDERS ARE ALTERING THEIR GOALS TO REFLECT THIS NEW FOCUS
LONG-TERM HEALTH MANAGEMENTPatient-Centricity
1. Multi-provider patient portal/tools
2. Medical information is made relevant
3. Patient-generated data is sought out
4. Portable and on the patient’s terms
5. Collaborative care process with shared decision making tools
Source: The Advisory Board Company.
65 | @chasedave
INDUSTRY STAKEHOLDERS MUST EMBRACE PATIENT ENGAGEMENT
Those with Significant Investments in Patient Engagement and Relationship Management Solutions
Patient relationship management and engagement work
And industry players are responding
LESS ACTIVATED MORE ACTIVATED
30-Day Readmissions
Medical Errors
Poor Communication Health Consequence
28%
13%36%
19%
49% 13%
Greater Patient Engagement = Improved Outcomes
Source: AARP survey of patients over 50 with 2 or more chronic conditions.
66 | @chasedave
PAYERS WERE FIRST TO DO SO WITH MIXED RESULTS
Health Matters
GOLDWALKERCOLORFALL
67 | @chasedave
> Vendors providing frictionless and secure integration with consumer health data, leading to actionable clinical data will win with providers
4EHR integration is a must; seek interoperability opportunities
1Analytics are as important as
data collection and warehousing
5 Build partnerships with payers to provide health and wellness incentives for patients
2User must be empowered
via actionable clinical insights
6Easy identification of high-risk patients
3 The simpler the better
AND PROVIDERS HAVE MUCH TO LEARN FROM THEIR EFFORTS
68 | @chasedave
CareMore: A PROVIDER EMBRACING A PATIENT-CENTRIC MODEL
1Early intervention is central to their model. Longitudinal records (8-10 sources) and predictive modeling allow for
early intervention to prevent acute episodes.
2 “A high percentage of physician services can be
delivered by non-physicians.”
3 A patient can go from being in the easy chair to ICU in
12 hours so they must rapidly intervene. speedy delivery within minutes can save.
4Capitation is freedom, not risk. Education is what the
patient needs, and longitudinal.
Key Takeaways from CareMore Business and Care Management Model
> Age- and health-adjusted payment for its full patient panel> Patient-first business design required total rethink of patient
relationship, health model, and care team> Physician hospitalists include treatment of patients outside
hospital
> Each chronic condition has its own holistic treatment plan> Information is rapidly processed and forwarded to all
members of care team
A Medicare healthcare company based in Southern California providing care to an exclusively Medicare Advantage population Acquired by Wellpoint in 2011 for $800 million
Source: Oliver Wyman.
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
70 | @chasedave
PATIENT-CENTRIC CARE INNOVATORS
HEALTH INFORMATION, TRANSPARENCY, AND PLAN INFORMATION
PATIENT RELATIONSHIP MANAGEMENT AND ENGAGEMENT/REMOTE PATIENT MONITORING
71 | @chasedave
PATIENT-CENTRIC CARE INNOVATORSCONSUMER-FRONTING PAYER PRODUCTS THAT HELP MANAGE BENEFITS AND PAYMENT
CARE ACCESS/RETAIL CLINICS/DIRECT PRIMARY CARE/HOUSE CALLS/CARE ANYWHERE
72 | @chasedave
NOTABLE RECENT FINANCINGSPRIVATE PLACEMENTS
2013
ENGAGEMENT INFORMATION CARE ACCESS
$10mm $8mm $68mm $40mm $24mm $15mm
$6mm $15mm $10mm $14mm $14mm
2014
ENGAGEMENT INFORMATION CARE ACCESS
$82mm $26mm
$110mm $17mm $11mm
$81mm $50mm $32mm
$25mm $15mm $27mm $24mm $21mm
2015
ENGAGEMENT INFORMATION CARE ACCESS
$500mm $20mm
$178mm $130mm $20mm $63mm $50mm $28mm
$35mm $13mm $13mm $20mm $16mm $15mm
$16mm s
73 | @chasedave
$91mm $178mm $100mmCARE ACCESS INFORMATION INFORMATION
JAN. 2014 MARCH 2014 MARCH 2014
NOTABLE RECENT FINANCINGS
IPOs
74 | @chasedave
WELLNESS & PREVENTION
75 | @chasedave
1. The era of open information in healthcare is underway
2. Wearables show promise, but not perfected
3. The life science industry’s “transistor moment” has the potential to revolutionize medicine
4. Large pharma can’t resist for long
5. America’s growing culture of wellness is beginning to penetrate the workplace, but are the results real?
6. The race to build a healthcare data platform is on
WELLNESS & PREVENTION OVERVIEW
76 | @chasedave
PAYERS
CLAIMS COSTS/FINANCE UTILIZATION EMR
PROCEDURES OUTCOMES
PRESCRIPTIONS
SUPPLY CHAIN
• Coordinated care• Improved outcomes• Interoperability• Population health
• Lower costs• Disease prevention• Adherence
SATISFACTION
THE ERA OF OPEN INFORMATION IN HEALTHCARE IS UNDERWAY
TRIAL RESULTS AND EFFICACY SALES AND DRUG HISTORY
• R&D productivity• Trial improvement
• Improving efficacy• Care access• Price transparency
• Convenience and cost• Good health
EXERCISE DATA PURCHASES BEHAVIORS, SOCIAL
DAT
A
PROVIDERS
GO
ALS
PATIENTS
DAT
AG
OAL
S
PHARMA
DATA
GO
ALSD
ATAG
OALS
CLAIMS COSTS
• Payment innovation• Data acquisition• Provider-performance
transparency
• Lowering costs• Reducing claims paid• Winning share• Wellness & prevention
77 | @chasedave
WEARABLES SHOW PROMISE
65%WEIGHT
61%BLOOD SUGAR
57%BLOOD
PRESSURE
54%EXERCISE
36%NUTRITION
36%PAIN
35%SLEEP
2012 2013 2014E 2015E 2016E 2017E 2018E 2019E
EXPENSE
PRIVACY
LOOK
COMFORT
HEALTH RISK
Leading barriers to purchase cited by U.S. consumers
Source: IMS Research, MeMD, ABI Research, Deloitte, Rackspace; TNS Global, October 2013.
> 88% of physicians want patients to monitor health parameters at home. Their top priorities include:
While wearable technology in healthcare is expected to triple in size by 2019, there are major consumer impediments to purchase.
> Fitness and medical wearables were 60% of the wearables market in 2013
10%
13%
13%
31%
54%
$2.0bn$2.7bn
100m units $5.8bn
78 | @chasedave
> Declining rate of sustained activity tracker use over ownership
BUT COULD BE A FAD AND ARE TARGETING THE WRONG POPULATION
0%
25%
50%
75%
100%
0 3 6 9 12 15 18 21 24
Rate
of S
usta
ined
U
tiliza
tion
Time (months)
Daily engagement falls below 50% within 18 months of purchase
0%
10%
20%
30%
18-24 25-34 35-44 45-54 55-64 65+% of activity tracker owners % of U.S. population
Americans own a wearable1 in 5 1 in 10 Wear it
daily
> Activity tracker ownership age demographic
Ages 25-34 Goal: Fitness Optimization
Ages 55-64 Goal: Overall health improvement and longevity
Source: Endeavour Partners, September 2013; PwC.
79 | @chasedave
86%wearables would make users
vulnerable to security breaches
82%feared wearables would
invade their privacy
72%wearables would hurt
our ability to relate to each other
CONSUMER AND DOCTOR SENTIMENT ON WEARABLES IS MIXED
46%employer should fund wearable
technology for employees
72%would use a smartwatch
if employer paid
63%would use a fitness band
if employer paid
> “Doctors would love to be excited about wearables — they’re gadget guys at heart — but theirday-to-day is spent battling 30 year old fax machines to get your last lab report.”
- Jeff Tangney, CEO of Doximity
Source: PricewaterhouseCoopers.
> “We can't make the leap that just because the data from these low-risk devices is coming indigitally doesn't mean that it's accurate.”
- Dr. Michael Blum, UCSF
80 | @chasedave
Rapidly declining cost of sequencing the human genome
THE LIFE SCIENCE INDUSTRY’S “TRANSISTOR MOMENT”
Allows previously unthinkable questions to be answered
What is my unique physiology?
What can I metabolize?
What drugs would not interact well for me?
What is the best dosage for me?
What is unique about my cancer?
What is my pre-disposition to disease?
2009
$100k2015
$1k
Source: PricewaterhouseCoopers.
81 | @chasedave
HAS THE POTENTIAL TO REVOLUTIONIZE MEDICINE
TRADITIONAL MEDICINEOne size does not fit all
PERSONALIZED MEDICINE:The application of genomics, pharmacogenomics,
and proteomics for improved efficacy
HIGH FAILURE RATES LOW FAILURE
Source: Brian Spear, Margo Heath-Chiozzi, Jeffrey Hugg, “Clinical Trends in Molecular Medicine”.
BIOMARKER DIAGNOSTICS(Blood, DNA, Tissue)
THERAPY
SSRIS 38%ASTHMA 40%DIABETES 43%
ARTHRITIS 50%ALZHEIMER’S 70%CANCER 75%
TARGETED THERAPY
82 | @chasedave
LARGE PHARMA CAN’T RESIST FOR LONG
3 Include diagnostics in development,
trial design, and treatment
Payers are beginning to recognize the real and increasing cost of administering ineffective drugs and treating side effects, and pharma must respond or face a frustrating future of declining sales and profits
1Forge alliances with
diagnostic companies
2 Communicate safety and efficacy advantages of targeted therapies
BLOCKBUSTER TARGETED
Mass Phenotype Targeted GenotypeMarkets
Disease State Disease Life CycleFocus
1 Drug – 1 Disease State Numerous StatesTreatments/Drugs
Scale KnowledgeEconomics
Large Runs Small RunsManufacturing
Few, Large Multiple, SmallSales Force
Few ManyProduct Portfolio
BUSINESS MODEL TRANSITION
Source: The Changing Face of R&D in the Future Pharmaceutical Landscape, Deloitte.
83 | @chasedave
0
2,000
4,000
6,000
8,000
10,000
1996 2000 2004 2008 2012 2013
AMERICA’S GROWING CULTURE OF WELLNESSO
rgan
ic Fa
rms
2002
2012
7,323
17,281
266%Organic market sales growth
(2002-2011), totaling $31.5 billion in 2011
# of farmers markets per USDA
78% of families
buy organic
THE TASTES OF A NEW GENERATION...
When asked if they will increase or decrease their spending in 50 different categories over the next 12 months, the proportion of millennials answered:
1FRESH FRUITS AND VEGETABLES
⬆37%
And the organic movement is showing rapid growth
3xgrowth in farmers markets
2ORGANIC FOOD
⬆25%
3NATURAL PRODUCTS
⬆23%
Source: Boston Consulting Group 2013 Global Consumer Sentiment Survey of U.S. Millennials’ Saving and Spending Intentions; USDA; Organic Trade Association.
84 | @chasedave
WELLNESS IS BEGINNING TO PENETRATE THE WORKPLACE
WHAT THEY OFFER
BIOMETRIC TESTING
HEALTH RISK ASSESSMENT
SUBSIDIZED GYM MEMBERSHIPS
FREE FLU SHOTSWEIGHT LOSS GROUPS
SMOKING CESSATION PROGRAMS LIFESTYLE
COACHING
24-HOUR NURSE LINE
HEALTH FAIRSPHYSICAL ACTIVITY
PROGRAMS
Source: Fidelity Investments and National Business Group on Health.
And spending more per employee on wellness incentives
201520142010
$430$595
$693
of U.S. employers with >50 employees offer wellness programs
50%
85 | @chasedave
BUT ARE THE RESULTS REAL?
PEPSICO
> Employee engagement is questionable
24% actually participate in
employer wellness programs
...to whoever shows wellness works.-Al Lewis & Vik Khanna
Insurance Thought Leadership.com
Source: RAND Group; HBR.org; Gallup.
> For every $1 spent on wellness, these studies showed healthcare savings of:
J&J DISEASE MANAGEMENT LIFESTYLE MANAGEMENT TOTAL MILANI/LAVIE
$2.71$3.80
$0.50$1.50
$6.00
12% strongly agree they have higher overall well-being
because of employer
> Prompting the “Wellness Prize”
$1 MILLION
86 | @chasedave
THE RACE TO BUILD A HEALTHCARE DATA PLATFORM IS ON
ACQUISITIONSINVESTMENTSPLATFORMSPARTNERSHIPS
INN
OV
ATO
RS
34 Total Healthcare Investments
C O M P A N I E S / D E A L A C T I V I T Y / I N V E S T O R S
88 | @chasedave
PHYSICAL FITNESS DIET & NUTRITION
VITAL SIGN MONITORING & WEARABLE TECH WELLNESS & PREVENTION PROGRAMS
WELLNESS & PREVENTION INNOVATORS
89 | @chasedave
SOCIAL ENGAGEMENT, NETWORKS, COACHING MEDICATION MANAGEMENT AND ADHERENCE
GENOMICS/PRECISION MEDICINE BEHAVIORAL AND EMOTIONAL HEALTH
WELLNESS & PREVENTION INNOVATORS
90 | @chasedave
2013
PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS
$40mm
$30mm $239mm $43mm $63mm $21mm
$12mm $35mm $30mm $19mm $18mm
2014
PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS
$480mm $120mm
$40mm
$147mm $204mm $29mm$70mm $62mm
$32mm $23mm $19mm$60mm $58mm
2015
PRECISION/GENOMICS BEHAVIORIAL HEALTH WEARABLES WELLNESS
$200mm $100mm
$50mm
$300mm $92mm $58mm
$100mm $79mm $35mm $48mm $30mm
$30mm$55mm $50mm $19mm$23mm
NOTABLE RECENT FINANCINGSPRIVATE PLACEMENTS
91 | @chasedave
$102mm $732mmGENOMICS WEARABLES
FEB. 2015 JUNE 2015
NOTABLE RECENT FINANCINGS
IPOs
OVERVIEW OF CASCADIA CAPITAL
93 | @chasedave
Leading diversified investment bank> M&A, private placements, advisory services> Specialized in-depth expertise across 10 industry verticals
Founded in 1999, Cascadia has a successful 16 year history> Successfully completed over 190 transactions with $5.6 billion in
transaction value> Representing clients in the U.S. and globally, including Europe, Asia and
Australia
Experienced team with successful track record> Wall Street training and experience > Decades of investment banking and operational expertise> Deep capital markets expertise
Coordinated delivery of appropriate expertise across the firm> 40 investment banking professionals> 11 Managing Directors in six cities
> Headquartered in Seattle, with Managing Directors in Houston, Los Angeles, Minneapolis, New York and Spokane
OUR FIRM
94 | @chasedave
PROVIDING A FULL SUITE OF BANKING SERVICES
MERGERS & ACQUISITIONS
We have completed M&A transactions ranging in size from $20-$500 million. Our thorough and disciplined process, in combination with our deep industry expertise, has resulted in a proven track record of delivering successful outcomes for our clients.
ENGAGEMENTS INCLUDE:• Sell Side Representation• Buy Side Representation
CORPORATE FINANCE
We have extensive experience placing equity and debt capital ranging from $10-$250 million. We leverage our deep relationships with institutional investors; including private equity, growth equity, venture capital, family office, mezzanine and venture debt, hedge funds and BDCs.
ENGAGEMENTS INCLUDE:• Private Equity Capital Raises• Public Company Capital Raises• Recapitalizations
STRATEGIC ADVISORY SERVICES
We provide our clients with analytical data and insights to facilitate strategic decision-making. We advise our clients on how to maximize shareholder value and then provide support for transaction implementation.
ENGAGEMENTS INCLUDE:• Corporate Valuations• Fairness Opinions• Shareholder Rights Planning
PRIVATE CAPITAL
We listen carefully to business owners and managers and then work closely with them to custom design long-term and flexible capital solutions. Our approach resonates particularly well with family-owned and closely-held companies.
ENGAGEMENTS INCLUDE:• Acquisition/Organic Growth Capital• Corporate Divestitures• Management Buyouts• Minority Stakes
• Debt Financings & Restructurings• Project Finance
• Shareholder Value Analysis• Strategic Partnerships & Joint Ventures
• Partial Liquidity Events• Recapitalizations• Special Situations
• Management Buyouts• Leveraged Buyouts
95 | @chasedave
PROVEN RESULTSMOST RECENT TRANSACTIONS
96 | @chasedave
PROCESS AND EXPERIENCE DELIVER RESULTS
Cascadia is a Highly Active Diversified Investment Bank
• Record-breaking 2014, having closed 26 transactions with over $1.3 billion in value
• Over $4.0 billion in total M&A transactions closed in the firm’s history
• Over $1.6 billion in total capital raised in the firm’s history
Team Members Have Deep Industry Expertise
• With bankers in ten different industry verticals, we have the experience to offer industry breadth while maintaining sector depth
• Dedicated resource model with comprehensive vertical expertise from Managing Director to Analyst
We Differentiate Each Process With a Customized Approach
• We are thoughtful advisors who deliver a tailored process to suit the needs of our clients
• We understand the strategies of the counterparties, enabling us to tell them why they should be interested – allowing Cascadia to drive the transaction and maximize results
Our Experience and Approach Drive Results
• We have experience, industry focus and a differentiated process that drives success
• Our transactions are built upon delivering the best quantitative and qualitative terms with the most desirable counterparty
97 | @chasedave
OVER $4 BILLION IN M&A TRANSACTIONSMOST RECENT TRANSACTIONS
98 | @chasedave
OVER $1.6 BILLION OF CAPITAL RAISED MOST RECENT TRANSACTIONS
99 | @chasedave
CASCADIA CAPITAL LEADERSHIP TEAM
• Leading diversified investment bank advisory firm serving domestic and global clientele
• Coordinated delivery of appropriate expertise across the firm• Strategic insight to assist in identifying and
executing a range of alternatives• 11 Managing Directors in six cities• 40 investment banking professionals• Over $5.6 billion in transactional value
Cascadia has a distinguished team of investment banking professionals with expertise in a multitude of industries and capital markets.
100 | @chasedave
HEALTHCARE & DIGITAL HEALTH
Auto Aftermarket
Business Services
Consumer & Retail
Energy & Applied Technology
Financial Services
Food & Agribusiness
Healthcare & Digital Health
Industrials
Real Estate
Technology
PRINCIPAL SECTOR FOCUS
Consumer Driven Health IT & Mobile Health Aging Population
Workflow Solutions Healthcare Services
Insurance & Reimbursements Data Access & Communication
OVERVIEWWe have four professionals with over 40 years of collective experience who have originated and executed over $1 billion of M&A and financing transactions in the Healthcare sector. Emerging trends in the industry are driven by consumers demanding higher quality care with cost transparency, integrated health information, and better provider access and communication. The solutions lie at the intersection of healthcare and technology, where innovation provides for better, more accessible care at lower costs. Cascadia’s team is perfectly primed to meet the growing needs of the industry’s players, leveraging vast experience coupled with a thorough understanding of the market.
REPRESENTATIVE TRANSACTIONS
101 | @chasedave
OUR HEALTHCARE EXPERIENCE & EXPERTISE
APPROACH TO HEALTHCARE
• Healthcare information technology• Full spectrum: pre-, point-of, post-care• Healthcare services
RELEVANT, DEEP EXPERTISE
• Originated / executed over $1 billion of M&A and financing transactions in the healthcare sector
• Regular dialog with key industry players regarding “live” transactions• Unprecedented financial sponsor relationships
SELECTED CASCADIA HEALTHCARE & DIGITAL HEALTH TRANSACTIONS
102 | @chasedave
THE HEALTHCARE & DIGITAL HEALTH TEAM
P R O F E S S I O N A L F O C U S P R I O R E X P . E D U C A T I O N
Kevin CableManaging [email protected](206) 696 - 7922
Healthcare & Digital Health
• Board Member (e.g., Innovate Washington, Technology Alliance, Washington Software Alliance)
• CEO, Numera Software• VP Corp. Dev., Molecular Simulations
BS, Cell & Molecular Biology, University of Washington
Dave ChaseSenior Advisor Healthcare & Digital Health
• Managing Partner, Healthfundr• Advisory Board, Oliver Wyman Health Innovation Center• Co-Author, 2014 Healthcare Book of the Year• Contributing Writer, TechCrunch, Forbes• SVP, WebMD• CEO, Co-Founder, Avado
BA, Business & Mathematics, University of WashingtonExecutive Education, Northwestern University
Jerome KimSenior [email protected](206) 436 – 2542
Healthcare & Digital Health• Business Analysis Manager, Starbucks • Sr. Associate, BMO Capital Markets• Analyst, Salomon Smith Barney
MBA, Corporate Finance, Columbia Business SchoolBA, Economics & Spanish, Willamette College
Novan [email protected](206) 436 – 2510
Healthcare & Digital Health • Analyst, FT Partners• Corporate Development, Quanex
BA, Finance, University of Washington
103 | @chasedave
SCI SOLUTIONS ACQUISITION OF CLARITY HEALTH
OVERVIEW – GROWING SAAS HEALTHCARE CARE COORDINATION SOFTWARE PLATFORM
SITUATION – KEY ACQUISITION TO ACCELERATE GROWTH
• SCI was in a process to acquire Clarity Health, a referral management, payer rules-engine and insurance processing software platform for hospitals, imaging centers and physician offices. The acquisition would create one of the largest referral management and care coordination software firms, serving more than 10,000 physician practices and 700 hospitals, health systems and imaging centers in 275 geographic markets across the United States.
• SCI was seeking to refinance its existing senior debt which had been in place since its acquisition by Wicks / NEA• SCI engaged Cascadia based on its experience in the digital health space and its debt placement capabilities
CASCADIA PROCESS – EFFICIENT, COMPETITIVE DEBT PLACEMENT
• SCI builds, implements, and operates healthcare business process software for a national network of hospitals, diagnostic imaging centers, physician groups, and post-acute care organizations
• It has the most widely adopted cloud workflow platform for referrals, orders, messaging, patient scheduling, revenue-cycle management and provider/consumer self-services
• Ownership includes private equity firms The Wicks Group, New Enterprise Associates, and management
• Cascadia’s Debt Group ran a targeted process focused on a group of technology-centric lenders including banks and non-bank capital sources for an enterprise-value based loan package
• Within weeks, Cascadia’s process generated several term sheets, giving SCI transparency to market pricing and terms
• Lender diligence was run concurrent with SCI’s buyer diligence, and several lenders received credit committee approval to proceed with the deal
• Orix Ventures, the technology lending division of Orix Corporation, provided a competitive financing package with terms superior to SCI’s current credit facility, as part of a new capital structure better aligned with SCI’s growth strategy
104 | @chasedave
INTEGRA GROUP’S ACQUISITION BY JM SMITH CORPORATION
• Transaction Completed: August 2015• Transaction Amount :Undisclosed
• Transaction Summary: Integra Group was acquired by JM Smith Corporation. Further details of the transaction were not disclosed.• Cascadia Capital Role: Exclusive financial advisor to Integra.
• Opportunity to broaden JM Smith’s current offering through complementary software systems• Once integrated with JM Smith, Integra will lead the long-term care business channel of the combined company and facilitate the
development of a portfolio of new products and services
• The acquisition will position the combined company as a leading provider of products and services to the institutional pharmacy market
• A supplier of services and technology to pharmacies, institutions, local government agencies, and businesses across America
• Selected prior investments/ acquisitions: RxMedic Systems and CornerDrugstore.com
TRANSACTION OVERVIEW
STRATEGIC RATIONALE
JM SMITH CORP.
• Integra designs and develops innovative software systems for the institutional pharmacy marketplace
• Provides internet access, website hosting and design, shopping carts and databases through four core modules
INTEGRA GROUP
105 | @chasedave
• By consolidating a fragmented urgent care market in the Pacific Northwest and undertaking a joint venture with a strategic partner in the Northeast, GoHealth is well-positioned to become a national leader in the urgent care market. Strategic advantages include:• Opportunity for widespread consolidation in a hyper-fragmented market• Pipeline of joint ventures to establish a nationwide presence• Strong management team of tenured healthcare industry professionals
• Capital raised will be used to acquire standalone urgent care clinics while undertaking the construction of de novo clinics across the Northeast
• Multi-sector focused private equity and venture capital fund based in Forth Worth, TX
• Selected Investments: Avaya, Chesapeake Energy, Domo
GOHEALTH’S EQUITY FINANCING
TPG CAPITAL
• GoHealth develops and operates leading networks of outpatient urgent care facilities throughout the Pacific Northwest and nationally
• GoHealth provides patients with expanded access to affordable, high-quality, patient-centric care in convenient locations
GOHEALTH
• Transaction Completed: March 2014• Capital Raised: $30,450,000
• Transaction Summary: GoHealth announced a growth equity investment by TPG Capital. Further terms of the investment were not disclosed.
• Cascadia Capital Role: Exclusive financial advisor to GoHealth
TRANSACTION OVERVIEW
STRATEGIC RATIONALE
106 | @chasedave
• With over 50% year-over-year growth, Clinicient has a significant opportunity to become the leading software and services provider to healthcare rehab clinics:• Compelling business model• Strong barriers to entry• Limited competition, only one other dedicated opponent in the market• Only solution that provides a fully integrated end-to-end platform
• Capital raised will be used to complete technology investments in the platform and invest in the sales and marketing function
• Technology-enabled services growth equity fund located in New York, NY• Selected Investments: Mindbody, Ascentis, MediaMath
CLINICIENT’S $15 MILLION EQUITY FINANCING
CATALYST INVESTORS
• Based in Portland, Oregon, Clinicient is a provider of integrated revenue cycle management software and services for outpatient rehabilitation clinics
• Clinicient provides rehab clinics with the software and services to effectively manage their practices and increase the efficiency of the claims reimbursement process
CLINICIENT
• Announcement Date: March 4, 2014• Capital Raised: $15 million in equity capital
• Transaction Summary: Clinicient announced a $15 million Series C investment by Catalyst Investors. Further terms of the investment were not disclosed.
• Cascadia Capital Role: Exclusive financial advisor to Clinicient
TRANSACTION OVERVIEW
STRATEGIC RATIONALE