TiE Healthcare Technology Innovation Zen Chu

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

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

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

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

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

Sources of Healthcare Dollars

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

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

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

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

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

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

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

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