Trends Driving Growth and Innovation in the Healthcare Industry

September 29, 2014

AHA Health Tech Forum

2

Six Big Themes for the New Healthcare Economy

Role of New Participants– The emergence of IT based tools and services is witnessing the rise of a new breed of competitors.

Who Pays?-The spiraling costs of care to government and private payors is forcing the launch of new methods and models for payment of healthcare services and products.

New Partnerships– An industry that historically operated in distinct silos is now being forced to integrate, and thus leading to firms seeking new types of partnerships and collaborations.

Modernizing Care Delivery– Clinical practice is moving from intuition based decisions to more analytics and data based approaches.

Rethinking the Customer – Patients are no longer going to be passive participants in the process.

Companies Revamping Strategies– Many industry participants as currently structured can not maintain viability without significant changes to their business model.

Source: Frost & Sullivan analysis.

Themes

2

3

Healthcare Re-imagined

In Person In Home

PrescriptiveReactive Semi-reactive

Monitored

Predictive

Preventive

Break-Fix Connected

Precision

Streaming

Source: Frost & Sullivan

4

Disease/Care Management

Prevention/Wellness

Series1

Goal:Keep

People Healthy Longer

Goal:Keep

People Healthy Longer Goal:

Manage or Mitigate

Risk

Goal:Manage

or Mitigate Risk Goal:

Diagnose and

Reduce Treatment

Delay

Goal:Diagnose

and Reduce

Treatment Delay

Goal:Manage

Goal:Manage Goal:

Quality of Life

Goal:Quality of

Life

Goal:Move to

More Interaction and Self-

Mgmt

Goal:Move to

More Interaction and Self-

Mgmt

Healthy / Well

At Risk Undiagnosed Chronically IllManaged

Chronically IllUnmanaged

End of Intervention

Continuum of Care

Siz

e of

Impa

cted

Pop

ulat

ion

$$

•Early identification and prevention

•New models of care delivery to improve:•Collaboration among providers•Patient knowledge, self-help and health

•Increase intervention•Higher touch at lower cost

Source: Frost & Sullivan

Care Delivery Transformation: Acute Care to PreventionTrack, Predict, Intervene, Manage

5

Leveraging Big Data to Improve Health, Reduce Costs

Imaging files

Published research

EHR / EMR

Claims data

Genomic data

Remote monitoring

mHealth apps

Biometric sensors

Social media

Clinician notes

Photos, video

Microbiomic dataEmail, text

messages

No

rmalizatio

n o

f Data, N

LP, In

tegratio

n

An

alytics

ActionableInsights

Process, BehaviorChange

Metabolomic data

Source: Frost & Sullivan

6

Population Health Management Leverages Shifts in IT

Define Population

Identify Care Gaps & Stratify Risks

Engage Patients

ManageCare

Measure Outcomes

AUTOMATED & ONGOING

• Data Integration• Analysis• Reporting• Communications

and Alerts

Source: The Institute for Health Technology Transformation, 2013; and Frost & Sullivan

SocialMedia

Mobility

Mobility

CloudBig

Data

Cloud

Cloud

BigData

SocialMedia

Cloud

7

PROCESS CHANGE

ANALYTICSINTEGRATIONDATA

Hurdles to Reaching the Promise of Digital Health

We are creating

millions of useful data

points,from a wide variety of sources…

…But the data is provided in separate

solutions which prevent getting a holistic view of

the patient.

FREEING DATA AND

INTEGRATING DATA ARE KEY

Predictive analytics has

arrived…Natural language

processing will become a

commodity…

…But working with only part of the

data

Analytics alone cannot transform

healthcare. Analytics need to create actions. Culture change,

behavior change, process changes

are hard to execute.

Source: Frost & Sullivan

8

Redefining Stakeholder Roles in Healthcare

Patients:

Physicians:

Pharma:Care Coordinators:

Medical Device Companies:

Care Providers:

Insurers:

Passive Active

Block-buster Drug

Thera-peutic

SolutonSecondary

RolePrimary

Role

ProcedureBased

ValueBased

Breadth of

Services

TargetedCare

ModelsAdmini-strative

Analytic

Individual Team

9

Competitive Success Factors Change Who Will Win

Last Decade Current Decade Next Decade

Technologies geared towards extending life

Technology to improve outcomes and mitigate

risk

Integrated platforms to provide comprehensive

continuum of care. Focus on quality of life.

Companies that advanced standard of

care.

Companies that could make treatments safer and easier to perform.

Companies that understand consumer behavior, needs,

and pain points.

Types of CompaniesWho Excel

SuccessDrivers

10

Business Models Must Adapt

10

Start with the need, not with the technology

Start with the need, not with the technology

Look beyond your core customer base

Look beyond your core customer base

Know when to foldKnow when to fold

Applying techniques from other industries to healthcare

Applying techniques from other industries to healthcare

Frugal innovation, tiered product markets

Frugal innovation, tiered product markets

Tiered solutions

Savings through process

improvement

US to be a net importer of medical technology?

11

Leveraging mHealth to Reduce Avoidable Medical Costs

• Source: mHealth report published by PwC,

mHealth Technology

Annual Cost to US Healthcare System

• Help patients track the timing & dosage of their medicines• Help providers gain more insight into patients’ conditions &

behavior to offer the right treatment & advice• Provide information on side effects, benefits, etc.

Patients don’t follow their

prescriptions~ $300 billion

Patients don’t give doctors

enough information

~ $45 billion

• Collect data through an application which keeps consumers engaged with the help of games, content and interaction

• Flag potential health problems and figure out exactly which people on the medical team they need to see

Unnecessary visits to doctors ~ $125 billion

• Provide information to patients by allowing them to pose health related questions to a network of physicians

• Teleconsultations to screen, advise

Missing critical warning signals ~ $7 billion

• Allow doctors to remotely monitor the vital signs of hospital patients and at home through sensors/devices

Unhealthy diet & lack of

exercise~ $100 billion

• Allow people to track calories through weight-control applications

• Prompt people to set reasonable goals, exercise, and count calories

Key Pain Points Addressed by Current mHealth Technologies

12

Direct To Consumer Models

Convenience Engagement Personalization

•Breaking down “bricks and mortar” approach to healthcare

•Diagnosis, testing and treatment in the home

•Preference-based care vs. evidence-based care

•Customized approach to communication

•Shared-decision making• “I want all my information in one place so my community has access”

Consumer Analytics

13

Contact Info

Greg CaressiSenior Vice PresidentHealthcare & Life Sciences

(+1) 650 475-4555 gcaressi@frost.com