The document discusses opportunities and challenges in healthcare information technology. It notes that while IT is underinvested in healthcare compared to other industries, it has strong potential as a driver of higher quality care. New business models are emerging that use IT to enable more efficient workflows, new therapies, decentralized care, and pay-for-performance systems. However, the healthcare sector faces challenges of fragmentation, lack of standards, and high costs of ensuring privacy and security. Overall the document argues that IT innovation can help better align all stakeholders in healthcare and lower costs while improving outcomes.

1. Healthcare Information TechnologyInnovation & OpportunitiesThe Indus EntrepreneurTiE Boston SymposiumMicrosoft New England July 2009 Zen Chu Accelerated Medical Ventures ZEN @ ACMEDX.COM

2. Unique Healthcare Mission & Business Safety & Effectiveness Paramount Evidence-Based Outcomes Regulatory & Reimbursement Barriers Cost-effective to society Alignment of 4 P’s & Big G Patients Payers Providers Products Goverment Multiple Customers Who Pays? © zen@acmedx.com

3. Procedures Products & Services Drugs, Medical Devices, Capital Equipment Software, Services Patients vf Healthcare Players Providers Physicians, Hospitals, Nursing Homes $$$ Payers Insurers, Employers, Medicare Information Asymmetries Confound Best Practices © zen@acmedx.com

4. Healthcare Delivery Value ChainComplex Value Chain Across Disease Cycle Source: Porter & Teisberg, Redefining Health Care © zen@acmedx.com

5. US Healthcare Spending 2007$2.3 Trillion, 15.2% GDP Other Devices, Diagnostics Pharmacy, etc Hospital Care Admin Costs Nursing Homes Physician Services Pharma Source: PHRMA Annual Report 2008 © zen@acmedx.com

6. Sources of Healthcare Dollars

7. Health Care Cost InflationPassed Along Value Chain Without Cost Controls Source: McKinsey Global Institute

9. Who Aligned To Manage Wellness? Source: Clayton Christensen, Innovator’s Prescription

10. Fragmentation & Scalability ChallengesGeography, Specialty, Disease State 700 Payers Negotiated Payments & Pricing Among Each Player & Region 5700 US Hospitals Medical Product Companies © zen@acmedx.com

11. Successful Products & Services Pattern Prove Effective Therapies for Right Patient Unmet Medical Need Remove treatment ambiguity Improve Standard of Care Comparative Effectiveness Prove it quickly & efficiently Productivity = Save Physician Time Reduce Patient Pain Enable New (Cheaper) Provider & Venue Intellectual Property (Patents, trademarks, brand) Lower Cost Necessary But Insufficient © zen@acmedx.com

12. Healthcare Information TechnologyChallenges HIT under-invested vs other industries 2.2-3.8% IT/Total Operating Expense (HIMSS) 50% less gross revenue investment than banking (Gartner) Spaghetti code & lack of standards Privacy & security costs Technology cost inflation under microscope … But strong case for HIT as Quality Driver Obama’s $19B HITECH Funding © zen@acmedx.com

13. Enabling New Business Models NEW MODEL EXAMPLE New Device SonoSite Ultrasound New Workflows e-Prescribing Payment Services Athena Healthcare Collective Knowledge Sermo Social Network New Therapies Image-Guided Therapy Direct to Consumer iPhone Disease Management Outsourcing O2i Teleradiology Decentralization In Home Warfarin Testing Pay 4 Performance Cerner Bundling Episode-Based Pricing Unbundling Bluetooth BP reporting © zen@acmedx.com

14. Additional Reading Viswanathan, Vijay. “Special Report: Medicine Goes Digital.” The Economist 16 April, 2009. Gawande, Atul. “The Cost Conundrum.” The New Yorker 1 June, 2009. Gawande, Atul. Complications: A Surgeon’s Notes On An Imperfect Science. 2002, Picador. Center for Accelerating Medical Solutions. Investing in Innovation: Accelerating Disease Research Through Philanthropy and Business. www.fastercures.org, 2005. Chesbrough, Henry. Open Business Models. 2006, Harvard Business School Press. Christensen, Clayton. The Innovator’s Dilemma. 1997, Harvard Business School Press. Christensen, Clayton, et al. Seeing What’s Next. 2004, Harvard Business School Press. Megantz, Robert. How to License Technology. 1996, John Wiley & Sons. Moore, Geoffrey. Crossing the Chasm. 1991, HarperCollins. Porter, M. and Teisberg, E. Redefining Healthcare: Creating Value-Based Competition on Results. 2006, Harvard Business School Press. www.thehealthcareblog.com www.health2con.com www.himss.org http://www.economist.com/specialreports/displaystory.cfm?story_id=13437990 http://cimit.typepad.com/cimit_forum_blog/2008/05/zen-chu-slides.html http://cimit.typepad.com/cimit_forum_blog/2009/04/the-new-economic-playbook-for-healthcare-development.html © zen@acmedx.com

15. Healthcare Information TechnologyInnovation & OpportunitiesPanel Discussion Prof. BhaskarChakravorti Harvard Business School, McKinsey Zen Chu Accelerated Medical Ventures Pam RandhawaSermo, Inc. Joseph Ternullo Partners Healthcare Center for Connected Health