Shift from fee for service to outcomes-
driven care will drive opportunities for
SIs and solution providers
Smart VAR Heal...
NETSPECTIVE
www.netspective.com 2
Who is Shahid?
• Serial healthcare IT entrepreneur, advisor to
numerous startups, blogge...
NETSPECTIVE
www.netspective.com 3
What’s this talk about?
Questions answered
• Is disruptive innovation in
healthcare poss...
NETSPECTIVE
www.netspective.com 4
What does “disrupting healthcare” mean?
This is $1 Trillion and the
Healthcare Market is...
www.netspective.com 5
No, your innovation will not
disrupt healthcare.
I promise.
The good news
is that doesn’t
have to.
www.netspective.com 6
No, your big data or mobile ideas
will not disrupt healthcare.
But if you can use them to add or ext...
www.netspective.com 7
No, your EHR/PHR or app will not
be used by enough doctors or
patients to disrupt healthcare.
But if...
www.netspective.com 8
No, your innovation will not be
accepted by permissions-oriented
institutions.
Find customers with a...
www.netspective.com 9
No, your innovation will not be
easily integrated into regulated
device-focused clinical workflows.
...
NETSPECTIVE
www.netspective.com 10
You have made the job of
identifying, diagnosing,
treating, or curing
diseases faster, ...
NETSPECTIVE
www.netspective.com 11
Life expectancy is increasing…
…but the rate of growth is slowing
NETSPECTIVE
www.netspective.com 12
Bacteria used to kill us the most…
Per 100k population, Historical Statistics of the Un...
NETSPECTIVE
www.netspective.com 13
We’ve got most infections beat…
…except the flu and pneumonia
Per 100k population, Hist...
NETSPECTIVE
www.netspective.com 14
Top killers today
Heart disease Cancer
Chronic lower
respiratory
diseases
Top killers i...
NETSPECTIVE
www.netspective.com 15
Death by age group, 1900 Death by age group, Today
From cures to management…
…young peo...
NETSPECTIVE
www.netspective.com 16
What Is the Business of Health Care?
• It's always better to define a business by what
...
NETSPECTIVE
www.netspective.com 17
PBU: Payer vs. Benefiter vs. User
Payer
Benefiter
User
If you don’t understand the exac...
NETSPECTIVE
www.netspective.com 18
What kinds of users are your customers targeting?
Help your customers go narrow and dee...
NETSPECTIVE
www.netspective.com 19
Shift from Fees for Service (FFS) to Value (FFV)
The Shift
The clinical model is shifti...
NETSPECTIVE
www.netspective.com 20
How Digital Health helps in shift
Successful Transitions of
Care
Reduced Hospital
Readm...
NETSPECTIVE
www.netspective.com 21
How to best identify your customers
FFS vs. FFV?
Target health
sector?
Number of
employ...
NETSPECTIVE
www.netspective.com 22
How will your customers get paid for innovation?
Direct Payment
• Your best option
• Ve...
NETSPECTIVE
www.netspective.com 23
Your customers’ innovation fit determines your opportunities
Therapies
Therapeutic
Tool...
NETSPECTIVE
www.netspective.com 24
Problems your customers looking to solve
Improve
medical
science?
Improve access
to car...
NETSPECTIVE
www.netspective.com 25
What you need to know these days
Consumer Health,
mHealth, eHealth
Health IT Product
De...
NETSPECTIVE
www.netspective.com 26
Problems you can solve for your customers
Patient Discovery
•Website
•Pre-Patient
Provi...
NETSPECTIVE
www.netspective.com 27
The business needs
• Quality and performance
metrics
• Patient stratification
• Care co...
NETSPECTIVE
www.netspective.com 28
Can you repurpose or enhance health data?
ProteomicsGenomicsBiochemicalBehavioralPhenot...
NETSPECTIVE
www.netspective.com 29
Some stuff not to focus on
• Don’t go for simple incremental innovation if
you can be b...
NETSPECTIVE
www.netspective.com 30
Forget mobile apps, focus on health IOT
• With all the attention being paid to mHealth
...
NETSPECTIVE
www.netspective.com 31
Healthcare Industry Fallacies
• Healthcare folks are neither technically challenged nor...
NETSPECTIVE
www.netspective.com 32
What makes your products successful
• Easy to explain
• Defendable and differentiated
•...
NETSPECTIVE
www.netspective.com 33
Why healthcare businesses buy stuff
Increase
revenue
(topline)
Maintain
capabilities
Re...
NETSPECTIVE
www.netspective.com 34
The Customer Relationship
Customer Gives
You Get
• Money
• Time
• Energy
• Commitment
•...
NETSPECTIVE
www.netspective.com 35
Health technology sector has many ups and downs
Make sure you understand where your pro...
Thank You
Visit
http://www.netspective.com
http://www.healthcareguy.com
E-mail shahid.shah@netspective.com
Follow @ShahidN...
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The shift from Fee for Service to Outcomes-Driven care means huge opportunities for systems integrators and service providers who know how to deal with data

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I presented this opinionated look at why the Medicare Shared Savings plans, ACOs and other outcomes-driven payment models are being promoted over fee for service (FFS) models and what that means for service providers and integrators. Evidence driven healthcare is required to help reduce costs and data drives evidence – the problem is that institutions are having trouble pulling together all the data they need. Current health IT systems integrate poorly and anyone that can improve that data integration to help with pricing transparency, cost transparency, care coordination, and population health management will have work for years.

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  • Examples will be provided during talk
  • “Aggregated patient registries” allows you to combine multiple patient registries from various directories into a combined one.
  • Examples will be provided during talk
  • Transcript of "The shift from Fee for Service to Outcomes-Driven care means huge opportunities for systems integrators and service providers who know how to deal with data"

    1. 1. Shift from fee for service to outcomes- driven care will drive opportunities for SIs and solution providers Smart VAR Healthcare Summit May 2014 Shahid N. Shah, CEO
    2. 2. NETSPECTIVE www.netspective.com 2 Who is Shahid? • Serial healthcare IT entrepreneur, advisor to numerous startups, blogger, healthcare futurist • 20+ years of software engineering and multi-site healthcare system deployment experience in Fortune 50 and Government sectors. • 12+ years of healthcare IT and medical devices experience (blog at http://healthcareguy.com) • 15+ years of technology management experience (government, non-profit, commercial) • 10+ years as architect, engineer, and implementation manager on various EMR and EHR initiatives (commercial and non-profit) Author of Chapter 13, “You’re the CIO of your Own Office”
    3. 3. NETSPECTIVE www.netspective.com 3 What’s this talk about? Questions answered • Is disruptive innovation in healthcare possible? • What does innovation in healthcare mean and how do you help customers make it happen? • Where are the major areas in healthcare where innovation is required and can you grow your business by helping your customers achieve them? Key takeaways • Go narrow, specialize, dive deep • Understand PBU: Payer vs. Benefiter vs. User • Understand why healthcare businesses buy stuff so you can serve them in ways they find you indispensable
    4. 4. NETSPECTIVE www.netspective.com 4 What does “disrupting healthcare” mean? This is $1 Trillion and the Healthcare Market is about $3 Trillion This is $1 Billion
    5. 5. www.netspective.com 5 No, your innovation will not disrupt healthcare. I promise. The good news is that doesn’t have to.
    6. 6. www.netspective.com 6 No, your big data or mobile ideas will not disrupt healthcare. But if you can use them to add or extract value from the existing system, you’ll do just fine.
    7. 7. www.netspective.com 7 No, your EHR/PHR or app will not be used by enough doctors or patients to disrupt healthcare. But if you can get even a fraction of them to use your software, you’ll do just fine.
    8. 8. www.netspective.com 8 No, your innovation will not be accepted by permissions-oriented institutions. Find customers with a problem-solving culture willing to accept risks and reward failures.
    9. 9. www.netspective.com 9 No, your innovation will not be easily integrated into regulated device-focused clinical workflows. Incumbent vendors will not entertain the potential of new legal liabilities without someone to share it with or new competition without direct compensation.
    10. 10. NETSPECTIVE www.netspective.com 10 You have made the job of identifying, diagnosing, treating, or curing diseases faster, better, or cheaper for clinicians through the use of information technology (IT) or business models. You have made the job of self-diagnosing, self- treating, or preventing diseases and improving overall wellness of patients through the use of new incentives, business models, or IT. What I mean by “actionable innovation” You can help your customers achieve practical, relevant, actionable solutions
    11. 11. NETSPECTIVE www.netspective.com 11 Life expectancy is increasing… …but the rate of growth is slowing
    12. 12. NETSPECTIVE www.netspective.com 12 Bacteria used to kill us the most… Per 100k population, Historical Statistics of the United States, Millennial Edition
    13. 13. NETSPECTIVE www.netspective.com 13 We’ve got most infections beat… …except the flu and pneumonia Per 100k population, Historical Statistics of the United States, Millennial Edition
    14. 14. NETSPECTIVE www.netspective.com 14 Top killers today Heart disease Cancer Chronic lower respiratory diseases Top killers in 1900 Pneumonia and influenza TB Diarrhea and enteritis Infectious diseases used to kill us… …but what’s left seem only to be “manageable” not easily “curable” Per 100k population, Historical Statistics of the United States, Millennial Edition
    15. 15. NETSPECTIVE www.netspective.com 15 Death by age group, 1900 Death by age group, Today From cures to management… …young people don’t dye of diseases often now http://siteresources.worldbank.org/INTHSD/Resources/topics/Health-Financing/HFRChap1.pdf
    16. 16. NETSPECTIVE www.netspective.com 16 What Is the Business of Health Care? • It's always better to define a business by what consumers want than by what you can produce or build – For example, whereas doctors and hospitals focus on producing health care, what people really want is health • In the future, successful doctors, hospitals, and health systems will shift their activities from delivering health services within their walls toward a broader range of approaches that deliver health – how will you be able to help them achieve those goals? What business are you in? The Emergence of Health as the Business of Health Care Source: http://www.nejm.org/doi/full/10.1056/NEJMp1206862
    17. 17. NETSPECTIVE www.netspective.com 17 PBU: Payer vs. Benefiter vs. User Payer Benefiter User If you don’t understand the exact interplay between PBU your product will fail The payer is the person/entity that writes the check for your product. The person or group that benefits most from the use of the product. The person or group that actually uses the product.
    18. 18. NETSPECTIVE www.netspective.com 18 What kinds of users are your customers targeting? Help your customers go narrow and deep not wide and shallow • Obesity Management • Wellness Management • Assessment – HRA • Stratification • Dietary • Physical Activity • Physician Coordination • Social Network • Behavior Modification • Education • Health Promotions • Healthy Lifestyle Choices • Health Risk Assessment • Diabetes • COPD • CHF • Stratification & Enrollment • Disease Management • Care Coordination • MD Pay-for-Performance • Patient Coaching • Physicians Office • Hospital • Other sites • Pharmacology • Catastrophic Case Management • Utilization Management • Care Coordination • Co-morbidities Prevention Management 26% of Population 4% of Costs 35% of Population 22% of Costs 35% of Population 37% of Costs 4% of Population 36% of Costs Source: Amir Jafri, PrescribeWell
    19. 19. NETSPECTIVE www.netspective.com 19 Shift from Fees for Service (FFS) to Value (FFV) The Shift The clinical model is shifting away from treatment of chronic conditions and focusing more on prevention, wellness, obesity intervention, behavior and lifestyle modification. Implications Clinical operations are shifting to hospital and physician ‘centered’ services that will rely heavily on health information technologies to monitor, coordinate, and manage care. • Successful Transition in Care resulting in Reduced Hospital Readmission Rates • Proactive population management • Patient engagement and collaboration • Disease prevention through wellness and obesity management • Chronic disease management • Care coordination and collaboration • Metrics and analytics
    20. 20. NETSPECTIVE www.netspective.com 20 How Digital Health helps in shift Successful Transitions of Care Reduced Hospital Readmissions Innovative Practice Models like Patient Centered Medical Homes Prevention, Wellness, Obesity intervention Behavior adjustments and modification Physician Marketing Personalized Concierge-Like Medicine Total Population Management
    21. 21. NETSPECTIVE www.netspective.com 21 How to best identify your customers FFS vs. FFV? Target health sector? Number of employees? Annual sales volume? Geography? Number of hospital beds? Number of patients? Type of patients? The list goes on and on…be specific! Help them stay away from market segmentation, focus on identifying PBU particpants Identifying your customers will depend on helping your customers identify theirs
    22. 22. NETSPECTIVE www.netspective.com 22 How will your customers get paid for innovation? Direct Payment • Your best option • Very few truly disruptive technologies can be directly paid for by providers within the USA • Limited adoption of ‘traditional’ pay for service reimbursement for next generation technology Direct Reimbursement • Second best option • Improvements in technology are outpacing payer adoption • Reimbursement will come but its time consuming and difficult Indirect Reimbursement • Emerging option • Payer requirements for improved quality and efficiency are creating indirect incentives to adopt innovative solutions • Solutions targeting new value-based reimbursement incentives are highly useful to medical providers If you haven’t figured it out for them, customers will not figure it out for themselves
    23. 23. NETSPECTIVE www.netspective.com 23 Your customers’ innovation fit determines your opportunities Therapies Therapeutic Tools Diagnostic Tools Patient Administration Patient Education Most RegulationLeast Regulation Be aware of regulations, don’t fear them, use them as a competitive advantage
    24. 24. NETSPECTIVE www.netspective.com 24 Problems your customers looking to solve Improve medical science? Improve access to care? Reduce costs? Improve therapies? Improve diagnostics? Improve drug design? Improve drug delivery? Create better payment models? Focus on jobs that customers need to be done, not what you want to build
    25. 25. NETSPECTIVE www.netspective.com 25 What you need to know these days Consumer Health, mHealth, eHealth Health IT Product Development Wireless & Mobile Strategies Collaboration, Social Technologies Cloud Computing Strategies MedTech Product Development Content & Document Management (CMS/DM) Enterprise Architecture, SOA Regulated Product Management Trust Models & Regulated Privacy, Security Planning Technology Due Diligence
    26. 26. NETSPECTIVE www.netspective.com 26 Problems you can solve for your customers Patient Discovery •Website •Pre-Patient Provider Search •Patient Connect •Patient Scheduling •Reminder call, scheduling, Ensuring Patient show up •Patient Intake Practice Management •Patient Scheduling •Charge Capture •Practice Management / Billing Tools •Revenue Analytics •Claims Scrubing •Billing Services •Pricing Management (Aggregated Billing Data analytics) •Reviews / Feedback Infrastructure •DaaS •Network •Office Automation Clinical Management •MU2 Compliant EHR •eRX •Voice Recognition •Clinical Language Understanding Integration •Patient Connect integration to PM •HIE •Labs •Device Connectivity •Image storage / EMR Access •Clearing Houses •Gateways Consulting Services •ICD •HIPAA •Practice Consulting •Revenue Planning •Legal and Compliance •Clinical Workflow Optimization •Billing to Clearing House Integration •Records Management / Migration Focus on jobs that customers need to be done, not what you want to build
    27. 27. NETSPECTIVE www.netspective.com 27 The business needs • Quality and performance metrics • Patient stratification • Care coordination • Population management • Surveys and other direct- from-patient data collection • Evidence-based surveillance The technology strategy • Aggregated patient registries • Data warehouse / repository • Rules engines • Expert systems • Reporting tools • Dashboarding engines • Remote monitoring • Social engagement portal for patient/family Do you have ideas in payment design? Payment models going fee for service to outcomes-driven care
    28. 28. NETSPECTIVE www.netspective.com 28 Can you repurpose or enhance health data? ProteomicsGenomicsBiochemicalBehavioralPhenotypicsEconomics Can you help customers use data to create new diagnostics or therapeutic solutions IOT sensorsAdministrative
    29. 29. NETSPECTIVE www.netspective.com 29 Some stuff not to focus on • Don’t go for simple incremental innovation if you can be bold and “disruptive” but make it look like you fit into the existing ecosystem nicely • Don’t look at mHealth, look at mobility in healthcare • Don’t look at apps, look at entire systems Incremental innovation is easier, disruptive innovation is probably more useful
    30. 30. NETSPECTIVE www.netspective.com 30 Forget mobile apps, focus on health IOT • With all the attention being paid to mHealth there’s been an useless focus on mobile apps • For the mobile apps, instead focus on mobility in healthcare through “health internet of things (IOT)” and self-care technologies
    31. 31. NETSPECTIVE www.netspective.com 31 Healthcare Industry Fallacies • Healthcare folks are neither technically challenged nor simple techno-phobes (they’re busy saving lives) • Most product decisions are no longer made by clinical folks alone, CIOs are fully involved • Complex, full-featured, products are not easier to sell than simple, stand alone tools that have the capability of interoperating with other solutions are • Hospitals will not buy unless one proves value. • Selling into doctors offices is not easy.
    32. 32. NETSPECTIVE www.netspective.com 32 What makes your products successful • Easy to explain • Defendable and differentiated • Attractive partnership opportunities • Word of mouth opportunity • Potential for PR • Scaleable staff and systems • Scaleable product — build once, sell many times • Uncomplicated • Focused • Sales model is scaleable and predictable • Own relationship with and information about customers
    33. 33. NETSPECTIVE www.netspective.com 33 Why healthcare businesses buy stuff Increase revenue (topline) Maintain capabilities Reduce costs (bottomline) Attract new patients Increase staff productivity Find your reason Healthcare businesses have complex buying processes – figure out why and what they buy
    34. 34. NETSPECTIVE www.netspective.com 34 The Customer Relationship Customer Gives You Get • Money • Time • Energy • Commitment • Referrals • Past experience • Expectations • Knowledge You Give Customer Gets • Product • Price • Value • Convenience • Selection • Service • Warranty • Brand If you can’t figure out why they buy, see if any of the things below make sense
    35. 35. NETSPECTIVE www.netspective.com 35 Health technology sector has many ups and downs Make sure you understand where your product fits in the hypecycle Source: Gartner; “Hype Cycle for Healthcare Provider Applications and Systems, 2010”
    36. 36. Thank You Visit http://www.netspective.com http://www.healthcareguy.com E-mail shahid.shah@netspective.com Follow @ShahidNShah Call 202-713-5409

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