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San Antonio HealthTech Bootcamp Presentation May 12, 2018

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Paddy Padmanabhan discusses the current healthcare ecosystem for the digital health startups: 'Forces driving healthcare transformation', 'Healthcare payment models', 'Focus areas and opportunities for the stakeholders', 'Investments', 'Vendor landscape' and 'Growth strategy'

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San Antonio HealthTech Bootcamp Presentation May 12, 2018

  1. 1. © Damo Consulting 2018 Making Money in the New Healthcare Economy: digital health startup primer Paddy Padmanabhan paddy@damoconsulting.net San Antonio| May 12, 2018
  2. 2. © Damo Consulting 2018 2@paddypadmanabha
  3. 3. © Damo Consulting 2018 3 The most expensive health care system on the planet We are at the cusp of an unprecedented opportunity to transform healthcare - Ed Marx, CIO Cleveland Clinic @paddypadmanabha $10,500 (OECD average $ 3200) 3.3 trillion economy, highest per capita costs in the world Over 5500 hospitals, consolidation under way Highly fragmented Engage patients, enable caregivers, increase efficiencies, improve outcomes Quadruple aim drivers Foundational platforms, data, analytics, digital health Healthcare IT spend growing
  4. 4. © Damo Consulting 2018 4 The forces driving healthcare transformation Payment reform and Value-based care (VBC) Healthcare Consumerism Digitalization across value chain Emerging data sources We need to let consumers determine value by shifting our system toward a more competitive, free market – Alex Azar, Secretary, HHS @paddypadmanabha
  5. 5. © Damo Consulting 2018 5 Healthcare Payment Models Fee-for-service: exactly what it sounds like – healthcare providers get paid for providing a service, such as a blood test, a doctor office visit, or an MRI. Accountable Care Organizations (ACO) : groups of providers who take on performance goals for healthcare outcomes for a patient population, and in return earn incentives based on improved outcomes (they can also face penalties if they miss their targets) Bundled payments : A healthcare bundle is an estimate of the total cost of all the services related to a certain problem, like a knee or hip replacement. Providers can improve margins on the procedure by keeping their costs under control. Patient-centered Medical Homes (PCMH) : A PCMH comprises of highly coordinated teams of caregivers that works closely to improve care coordination for which an additional payment is layered on to compensate for the extra effort of care coordination. The Department of Health and Human Services (HHS) has set a goal of tying 50% of Medicare fee-for-service payments to value through alternative payment models (APM) by 2018. @paddypadmanabha
  6. 6. © Damo Consulting 2018 6 The digitalization imperative Patients Caregivers Organization Stakeholders Focus area Opportunities Health education Wellness portal Appointment scheduler Cost estimator Scale Workload & Burnout Health outcomes Virtual consults/eConsults Remote monitoring Real-time insights Efficiency Labor costs Productivity OR/ED utilization Automation Collaboration tools Provider-focused solutions have the most capital invested, with functions focusing on administrative workflow and clinical workflow. – Startup Health Q1 2018 Access Healthcare Costs @paddypadmanabha
  7. 7. © Damo Consulting 2018 7 …and the forces restraining it There are some 318,500 mobile health applications available to download. A mere 41 apps with over 10 million downloads each account for nearly half of all app downloads -IQVIA Research Market maturity The teacher is ready – what about the student? Data security and privacy IT security, HIPAA regulations, ransomware Interoperability Silo-ed proprietary systems, poor data quality Suboptimal experiences Non-user friendly, high adoption thresholds “Two-canoe” syndrome, low awareness of market threats No urgency @paddypadmanabha
  8. 8. © Damo Consulting 2018 8 Where is all the money going ? # On average, $5.2 billion was invested in the U.S. Health IT market in each of the last 5 years. -Healthcare Growth Partners, Jan 2018 @paddypadmanabha
  9. 9. © Damo Consulting 2018 9 Technology vendor landscape* The custodians The enablers The arbitrageurs The innovators @paddypadmanabha * From The Big Unlock: Harnessing data and growing digital health businesses in a value-based care era
  10. 10. © Damo Consulting 2018 10 Custodians: We have the data and the workflow The Custodians @paddypadmanabha Electronic Health Record (EHR) systems Clinical workflows and patient records Proprietary systems with low interoperability The InnovatorsThe Arbitrageurs The Enablers Trying to catch up to the digital transformation wave Major companies
  11. 11. © Damo Consulting 2018 11 Enablers: We built it, you can rent it Platforms with extended range of capabilities @paddypadmanabha Configurable for a wide range of solutions Technology stacks that include integration and analytics The Custodians The InnovatorsThe Arbitrageurs The Enablers Usually leave last mile to partners Major companies
  12. 12. © Damo Consulting 2018 12 Arbitrageurs: We can do it for you (and for less) @paddypadmanabha Global technology consulting firms Custom development of solutions Value prop based on labor and information arbitrage Often include startup solutions in service bundle The Custodians The Innovators The Enablers The Arbitrageurs Major companies
  13. 13. © Damo Consulting 2018 13 Innovators: we have a whole new way of doing it @paddypadmanabha The Enablers The Arbitrageurs The Custodians The Innovators Struggle to gain traction due to perceived risk and lack of scale Major companies VC-funded startups Typically focus on a specific problem Often funded by healthcare innovation centers
  14. 14. © Damo Consulting 2018 14 Following the money 70% of digital health pilots turned into paying customers in 2017. – Rock Health survey @paddypadmanabha Enormous market opportunity Healthcare is ripe for change. What specific problem are you solving ? Revenue models OK, you have great business model. What is your path to revenue ? The funding environment VC’s put $11 Bn in digital health investments in 2017. What is your path to funding ? Marketing and sales So you have a great product. So what ?
  15. 15. © Damo Consulting 2018 15 MARKET DEVELOPMENT: ADE FRAMEWORK*ADETM Growth strategy framework Growth levers Strategies o Portfolio governance o Customer success & value capture o Product/Service improvement Acquire : new logos Defend: current book of business Expand: adoption and enterprise footprint o Messaging and positioning o Branding/marketing o Inside sales/field sales o Opportunity mapping o Account based marketing (ABM) o M & A Strategic relationships Market entry and revenue diversification Revenue sustainability and stickiness @paddypadmanabha
  16. 16. Damo Consulting is a growth strategy and digital advisory firm that works with healthcare enterprises and global technology companies. We help develop and implement digital transformation strategies and enable market growth strategies. We specialize in thought-leadership led brand transformation and actionable healthcare market intelligence USA One Lincoln Center, 18W140 Butterfield Road Oakbrook Terrace Suite 1500 Oak Brook, Illinois, 60181 Phone : (630) 613-7200 INDIA Mariam Center, 7M - 302, 3rd Floor, HRBR Layout, Bangalore - 560 043 Phone : +91 8064051999 Email : info@damoconsulting.net | Website : www.damoconsulting.net https://www.damoconsulting.net/book-the-big- unlock/ https://www.cio.com/blog/healthcare-technology-trends/

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