2011 0406 Making Money By Creating Value In Healthcare Webinar

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This webinar on the need for Industry to Revolutinize Healthcare was sponsored by WMDO in April 2011.

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2011 0406 Making Money By Creating Value In Healthcare Webinar

  1. 1. The medical device industry’s most trusted source for professional online training. Wednesday, April 6h, 2011 MAKING MONEY BY CREATING VALUE IN HEALTHCARE -OR –WHY INDUSTRY WILL REVOLUTIONIZE HEALTHCARE A WMDO informational webinar Presented by KARIN ROOF, M.B.A., M.S. Principal, MedLinX MedTech Consulting, LLC The webinar will begin in a few moments. Please wait. Copyright © 2011 wmdo.org
  2. 2. Healthcare is Screaming for Change Where Will Effective Solutions Come From?Sources: http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp; www.santarosaconsulting.com/SantaRosaTeamBlog/ post/2009/12/11/Health-Care-Delivery-In-The-United-States-e28093-Feverish-Pace-or-Just-Suffering-From-Fever.aspx Copyright © 2011 wmdo.org
  3. 3. Who Will Fix It? Copyright © 2011 wmdo.org
  4. 4. Outline for Today Making Money by Creating Value in Healthcare Value in Healthcare The Need for Solutions Technology & Market Trends Focus Areas: Chronic Disease & Prevention Why Industry? Copyright © 2011 wmdo.org
  5. 5. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Value in Healthcare Source: New York, 23 April 2009. http://www.ey.com/GL/en/Newsroom/News-releases/Media---News-Release---Failing-to-demonstrate-value-of- innovation-is-top-risk-facing-life-sciences-sector--according-to-Ernst---Young Copyright © 2011 wmdo.org
  6. 6. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Used to be… See a Develop a Need Product Copyright © 2011 wmdo.org
  7. 7. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY?Creating Value inHealthcare is CostComplicated… Complex Sophisticated Clinical Technologies Needs HealthCare Regulatory Reform Environment New Comparative Overwhelmed Effectiveness Customers Research Quality - Criteria Technical & Clinical Copyright © 2011 wmdo.org
  8. 8. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Unique Requirements: Clinical / Regulatory Copyright © 2011 wmdo.org
  9. 9. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? What is Value? In healthcare lingo, it is often referred to as Cost / Benefit Copyright © 2011 wmdo.org
  10. 10. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Key Problems in the U.S.  C-O-S-T The four letter word in U.S. Healthcare.  Pharma & MedTech Tech are NOT the direct culprits  Inferior results, in spite of high spending & high tech  Large % of the population in uninsured, making access to healthcare problematic Copyright © 2011 wmdo.org
  11. 11. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Growth in US Healthcare Expenses is Unsustainable In 2009, the US spent $2.5 trillion on health care, representing 17.3% of the GDP, up from 16.2% in 2008.Sources: http://stats.oecd.org/Index.aspx?DataSetCode=HEALTH ; http://en.wikipedia.org/wiki/Health_care_in_the_United_States. Copyright © 2011 wmdo.org
  12. 12. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? It’s Healthcare Delivery, not Technology, That Drives Cost… 2008 U.S. Health Expenditure: $2.3 trillion ($billions) $800 $700 $600 $500 $400 $300 $200 $100 $-American Well: The Doctor Will E-See You Now CASES | ELIE OFEK, RON LAUFER | MAR 30, 2010. Copyright © 2011 wmdo.org
  13. 13. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Healthcare Delivery vs. Drugs & MedTech 2008 U.S. Health Expenditure: $2.3 trillion ($billions) $2,500 87% of Total $2,000 $1,500 Technology $1,000 represents 3% of Total $500 13% of Total $- HC Delivery Drugs & MedTechAmerican Well: The Doctor Will E-See You Now CASES | ELIE OFEK, RON LAUFER | MAR 30, 2010. Copyright © 2011 wmdo.org
  14. 14. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Spending Alone Does not Increase Value More spending does not equal more quality Copyright © 2011 wmdo.org
  15. 15. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? How Did We Get Here? Copyright © 2011 wmdo.org
  16. 16. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? 4 Models for How Healthcare is Paid For National Health Insurance Socialized Medicine A gov’t payer that citizens pay into, with Healthcare financed & provided by gov’t, private providers. (Canada.) through tax payments. No medical bills; gov’t is sole payor. (Great Britain, Scandinavia, Italy, Spain, U.S. VA System.) In the U.S.: A mixed bag… but funding has essentially provided unconstrained resources for healthcare, pharma & medtech CONSUMER PAYS Out-of-Pocket Private Health Insurance Patient pays for care. (Poorest countries, like Cambodia, rural India.) Plans funded by employers and employees through payroll deductions, but cover everyone. (Germany, France, Belgium, Switzerland, Japan, Latin America)Source: T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. 2009, The Penguin Press. Copyright © 2011 wmdo.org
  17. 17. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? The U.S. Healthcare Payment System: Fragmented Working < 65 – Private Health Insurance Military Personnel, V.A., or Native Private health insurance plans funded by Americans – Socialized Medicine employers and employees through payroll Healthcare financed & provided by the deductions. (Like Europe, but the system doesn’t gov’t, through tax payments. No medical cover all.) bills; gov’t is sole payer. (Like UK) >65 Retired – Medicare “National Health 45 million uninsured Americans - Out-of- Insurance” Pocket (16%) Gov’t payer that citizens pay into, with private Patient pays for care. (Poorest countries, like providers. (Like Canada) Cambodia or rural India)Source: T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. 2009, The Penguin Press. Copyright © 2011 wmdo.org
  18. 18. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Key Trends are Driving Future Direction  U.S. Healthcare Reform  Comparative Effectiveness Research  Health Information Technology  Consumer Driven Demand  Shift in Innovation to Emerging Markets Copyright © 2011 wmdo.org
  19. 19. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Healthcare Reform in the U.S.: What it Means  Individual mandate: everyone Expand must be insured. coverage  2014: Insurance “exchanges” (MA, OR models).  To “Accountable Care” and Healthiness Change Insurers Behavior  More customers, more restrictions  Better drug benefits; Less to Medicare  No recission, denying pre-existing Advantage Medicare / conditions, lifetime limits, and  Ounce of Prevention – no out-of-pocket Medicaid limited rate increases  LTC & coordination between Medicare & changes MedicaidSource: LANDMARK, The Inside Story of America’s New Health-Care Law and What It Means for Us All, The Washington Post, 2010. Copyright © 2011 wmdo.org
  20. 20. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Paying For It: Proposed $938 billion over 10 years Taxes  Higher Medicare payroll tax: 1.45  2.35% for >$200k  New Medicare tax on investment income  3.8%  New tax on “Cadillac” plans Spending Cuts  Eliminate excess Medicare Penalties & fees Advantage plans  For employers not providing health insurance  Slow increases in Medicare  Pharma, med device, and insurance co. fees payment ratesSource: LANDMARK, The Inside Story of America’s New Health-Care Law and What It Means for Us All, The Washington Post, 2010. Copyright © 2011 wmdo.org
  21. 21. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Comparative Effectiveness Research (CER) Provide evidence-based data to inform decision-making for patients, providers, and payers What • Compares benefits and risks of two or more therapies • Prioritizes treatments for review with high cost and concerns about evidence, value & overutilization More value for health care dollar Why • U.S. has more spending than any other country – but poorer outcomes • Improve current spending – and slow spending growth Multi-year, multi-billion dollar effort in U.S. • Progressive expansion of CER framework expected to link When & How reimbursement to value evidence • CER likely to evolve over 3-7 year timeframe to increase standards In place & expanding around the world (UK, FR, Australia, Brazil, U.S.) Where (Considered in Japan, China)Source: Kenneth Stein address, LifeScience Alley Annual Conference, Dec. 8th 2010. Copyright © 2011 wmdo.org
  22. 22. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Initial National Priorities for CERSource: Initial Priorities for Comparative Effectiveness Research, IOM, 2009. http://books.nap.edu/openbook.php?record_id=12648&page=100 Copyright © 2011 wmdo.org
  23. 23. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? The U.S. is Implementing Health Information Technology (HIT) HIT-Enabled Health Reform Achieving Meaningful Use 2009 2011 2013 2015 HIT-Enabled Health Reform Meaningful Use Criteria HITECH Policies 2011 Meaningful Use Criteria (Capture/Share data) 2013 Meaningful Use Criteria (Advanced care 2015 Meaningful process with Use Criteria decision support) (Improved Outcomes) Copyright © 2011 wmdo.org
  24. 24. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Where is payment for Healthcare going? High deductible insurance Developing nations without plans insurance systems CONSUMERS PAY Copyright © 2011 wmdo.org
  25. 25. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Where Is MedTech Innovation Going? Shifting to Emerging Markets Copyright © 2011 wmdo.org
  26. 26. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Price Waterhouse Cooper’s Medical Technology Innovation Scorecard The race for global leadership - assessment of nine countries’ capacity and capability for medical technology innovation: Brazil, China, France, Germany, India, Israel, Japan, United Kingdom, U.S. Key findings: The medtech innovation ecosystem, long centered in the US, is moving offshore. US consumers aren’t always the first to benefit from new medical technology and could eventually be last. The nature of innovation is changing as developing nations become the leading markets for smaller, faster, more affordable devices that enable delivery of care anywhere at lower cost.Source: http://www.pwc.com/us/en/health-industries/health-research-institute/innovation-scorecard/index.jhtml Copyright © 2011 wmdo.org
  27. 27. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? PWC Innovation Scorecard: U.S. vs. China 5.5Source: http://www.pwc.com/us/en/health-industries/health-research-institute/innovation-scorecard/index.jhtml Copyright © 2011 wmdo.org
  28. 28. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Two Hot Focus Areas  Chronic Disease Management  Prevention Copyright © 2011 wmdo.org
  29. 29. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Where is the $? What can Technology Impact? Chronic Disease Burden*: • > 100 million Americans have Diabetes, Kidney Disease, Hypertension, and/or Cardiovascular Disease • 2 of 3 Americans are overweight; 1 in 5 is Obese • Chronic diseases account for 96% of Medicare Spending • Complications from chronic disease account for ~75% of US healthcare spending!Source: An Unhealthy America: The Economic Burden of Chronic Disease. Milken Institute, Oct. 2007. Copyright © 2011 wmdo.org
  30. 30. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Chronic Disease Management Example Congestive Heart Failure 1 in 5 Americans >40 will develop Heart Failure Expensive chronic disease with repetitive hospital visits Management metrics can prevent hospitalizations and increase Quality of Life Copyright © 2011 wmdo.org
  31. 31. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Prevention is another Hot New Area in Healthcare Copyright © 2011 wmdo.org
  32. 32. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Why Industry? Innovation is the Key to Success  Money is no longer an unlimited resource in healthcare.  Reducing the cost of healthcare in all markets, but especially uninsured and emerging markets, is key.  Cost Effectiveness Research will drive innovation that is VALUABLE in terms of Benefit / Cost.  Innovation will migrate to lower-cost, efficient solutions that utilize wireless and internet technologies.  Industry, not government, is capable of innovating market- based solutions that creatively satisfy stakeholder needs. Copyright © 2011 wmdo.org
  33. 33. VALUE IN THE NEED FOR TECHNOLOGY & KEY AREAS WHY 1 HEALTHCARE 2 SOLUTIONS 3 MARKET TRENDS 4 FOR FOCUS 5 INDUSTRY? Example: Wireless Technology QualCom’sSource: http://www.westwirelesshealth.org Copyright © 2011 wmdo.org
  34. 34. Objective for Industry Copyright © 2011 wmdo.org
  35. 35. Outline for Today Making Money by Creating Value in Healthcare Conclusion – THANK YOU Value in Healthcare The Need for Solutions Technology & Market Trends Focus Areas: Chronic Disease & Prevention Why Industry? Copyright © 2011 wmdo.org
  36. 36. The medical device industry’s most trusted source for professional online training. Questions & AnswersPlease type your question in the chat box located to the lower left of your screen. Due to time restrictions, we can not guarantee an answer to every question during this session. Please note that many questions will be answered by following the more extensive courses at WMDO. Thank you for your comprehension. Copyright © 2011 wmdo.org
  37. 37. The medical device industry’s most trusted source for professional online training. Be sure to check out the online course: Creating Value in Healthcare WMDO has created especially for medical device professionals the online course: “Creating Value in Healthcare course” to get you up and on the right track now. This course is designed to orient learners to the most fundamental sources of value in healthcare. It provides high level context on healthcare customers / stakeholders and the care continuum. Understanding at this high level is intended to enable industry to maximize the value their products/services provide, and hence provide the basis for solid industry positioning for a profitable long-term business model. By briefly examining examples of companies who have succeeded and failed in creating value, it is hoped that learners will prevent making similar mistakes themselves. Available now at:www.wmdo.org Copyright © 2011 wmdo.org

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