Aggregated Healthcare
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This is the presentation I have made for Stanford. It shows three major global trends of modern developments within the healthcare industry in moving from the product oriented healthcare to a service oriented one.
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Aggregated Healthcare
- 1. S Aggregated Healthcare © Andrew Issaenko 2017 für Stanford University
- 2. Healthcare as a Product • Early Diagnostic and Health Monitoring • Prevention Treatment • Health Recommendations • Advanced Diagnostic and Monitoring • Active Combined treatment • Post-Operative Monitoring • Post-Operative Treatment Healthcare as a Product Now
- 3. Healthcare as a Service • Early Diagnostic and Health Monitoring • Prevention Treatment • Health Recommendations • Advanced Diagnostic and Monitoring • Active Combined treatment • Post-Operative Monitoring • Post-Operative Treatment Healthcare Potentially as a Service somewhere in the Future
- 5. Financing Product Life Cycle Finance Flows • Basic Healthcare Premium • Added Services Premium • Own Risk Payment • Medical Costs Payments • Operational Costs • Shareholder Margin • Equipment/Pharmacy Purchasing • Operational Costs • Medical Services Costs • Shareholder Margin • Suppliers Payments • Production Costs • Operational Costs • Shareholder Margin Healthcare Financing in a Products Delivery Model Healthcare Polis
- 6. • Direct Subsidies for Healthcare Research and Improvement Projects • Loans from Banks to Hospitals • Metrics on targets achievement • Goals/Lifestyle Based Financing • HealthCare Data (Auto Diagnostic) • Preventive Advises • Preventive Score Based Financing Premium • Equipment/Pharmacy Ordering • Operational Costs • Medical Services Costs • Suppliers Payments • Production Costs • Operational Costs • Negotiated Shareholder Margin Financing Service Life Cycle Aggregated Finance Flows Healthcare Financing in a Service Delivery Model Privacy Restrictio n External Medical Suppliers Re-Financing Specialized Clinics Integrated Polis Integrated Finance Flows
- 7. Financing Service Life Cycle Aggregated Information Flows Healthcare Financing in a Service Delivery Model External Medical Suppliers Specialized Clinics Integrated Polis • Direct Subsidies for Healthcare Research and Improvement Projects • Metrics on targets achievement • Adaptive HealthCare • Goals/Lifestyle Based Financing • HealthCare Data (Auto Diagnostic) • Preventive Advises • Preventive Score Based Financing Premium • Equipment/Pharmacy Batches Purchasing • Operational Costs Structure • Medical Services Costs Structure • Capacity Allocation • Production Costs Structure • Production Flow Optimization • Negotiated Shareholder Margin Privacy Restrictio n Aggregated Information Flows Re-Financing
- 8. Hospital-shore Product Life Cycle Information Flows Servicing PartyHospital or Local Health Center (Doctors) Medical Equipment in Product Only Model Medical Equipment/Pha rmacy
- 9. Hospital-shore Service Life Cycle Information Flows Medical Equipment Service Provider Medical Equipment in a Service Model Hospital or Local Health Center (Doctors) Distant operation of equipment by company service engineers
- 10. Local-shore Product Life Cycle Information Flows Pharmacy in a Product Only Model Hospital/Local Drugstore Patients Pharmacological/ Implantable Devices
- 11. Medic Service Life Cycle Aggregated Information Flows Pharmacy in a Service Model Personal Medic Service Provider Hospital and Local Drugstore
Editor's Notes
- I work as contractor and in fact already do selling B2B services to my customers for their projects. My last two years assignment have been at Medtronic. So it gave a great deal of insight on how medical industry operates and how health is delivered. I have chosen for this final assignment on value chain services to analyze possibilities of service offering by aggregating financial, informational, material streams in the entire healthcare industry.
- Costs reduction has always been the issue for this industry. However, if we look at the nature of healthcare it often needs to be excessive to be good. So, how can we provide a good healthcare on affordable price? I do believe that the solution here is to move from perception of healthcare as the product (we don't use it until we need it), as it is shown on slide 2.
- To healthcare as a service, as it is shown on the slide 3.
- The health shall be something that is affordable to keep rather than difficult and expensive to re-gain. The promotion of healthy lifestyle is just one of parts here. There are four distinct types of stakeholders involved in healthcare providing, as it is shown on the slide 4. Each of those stakeholders provides different products. When those types of products are combined, they represent of what we know as a modern healthcare.
- Healthcare begins with financing. Let's look on slide 5. On this slide Hospitals and Local Doctors/Drugstores are combined within one block. Local healthcare providers and hospitals are very much alike other in terms of value chain flows. Local Doctors/Drugstores act as “front-office” treatment facilities and Hospitals/ Specialized Clinics represent “back-offices”. They are two actors of the same block that represents application of healthcare as it is process. Everyone of men would rather remain healthy than sick. But, when it comes to the costs, healthcare providers are usually paid, when people get sick. Would it be better, if healthcare providers would be paid to keep us healthy?!
- Doing it requires re-engineering financial and information flows among all four categories, as it is shown on the slide 6. The first goal shall be to enable plugin-ness of our service with existing healthcare providers. The same principle was very good illustrated during the course and applied by PCH and IDS in the fields of manufacturing and logistic. The service shall provide information sharing and plugin-ness to all third party actors as Hospitals/Specialized Clinics, External Medical Suppliers and External Insurance Companies/Sources of financing the healthcare. The system shall be flexible enough to be able to deal with privacy peculiarities in collecting and analyzing personal health data in different countries.
- Let’s look on the slide 7. One of the key points of this presentation and concept of integrated healthcare is recognizing the global nature of healthcare. The local healthcare shall be hold for emergency and spontaneous treatment cases, where the time really matters. Many treatment of complex issues, which may require time of being in a hospital and be monitored by doctors, can be outsourced in offshore locations, where doctors and hospitals have required expertise/experience in successful treatment of particular cases as well as good reputation in medical world. There's a raise of such facilities, which are specialized with offshore healthcare providing, in India, Panama and other countries. Aggregated information flows and exchange between all actors as patients, hospitals and medical suppliers allows gaining insights in the effectiveness of particular treatment and provides information to value-structuring for different type of treatments. It also allows specialized clinics/hospitals to reduce the emergency amount of inventory they shall have. The opportunity provides creation the perfect front-window healthcare company that enables users to choose an appropriate type and level of insurance. It also offers with the incentives to a user to follow given recommendations regarding food diet, health exercises, following preventive treatments and etc. The system will have no restrictions to accepting people with pre-conditions. The standard health insurance premium is set for everyone. However, if a person cooperates to remain healthy, his health protecting score can be raised and premium is reduced. Having a good process in the place for finance and information flow allows moving further. Let's us look at two distinct categories of materials/information flows for hospital-shore and local-shore treatments.
- Having a good process in the place for finance and information flow allows moving further. Let's us look at two distinct categories of materials/information flows for hospital-shore and local-shore treatments. In the modern paradigm of financing purchasing of equipment/inventory, it's done by hospitals and they book those costs on their capital investment or operational spending. Service may be also done by third-parties, especially if we speak about buying second hand-equipment. It increases the total margin paid. The model itself is presented on slide 8.
- Let's now look at slide 9. Moving from owning to leasing equipment by a hospital would allow to reduce costs of purchasing the equipment and the required capital investment. It would also allow a manufacturer to get more insight and influence on ways of how equipment is serviced and used on the users' side. There're can be different forms of business model in this case, as regular fixed time payments or paying per use/patient. When the business is horizontally and vertically integrated, it does not matter from which point of value-chain the additional financing comes to implement a service oriented delivery. Re-engineering financial and information streams to support optimally the service oriented sales and support may require time. Still, there's the significant benefit. If the product delivered as a service, it can be supported and controlled (partially) by engineers of the company, instead of hospital staff. It allows easier introduction of new and more productive equipment within a hospital. No training doctors is required and the manufacturer gets more accurate information about the whole lifecycle of equipment, as developing, manufacturing, delivering, installing and servicing and ultimately usage of the company. The second advantage is that a hospital/specialized medical center in offshore country is not going to require a massive capital investment to buy and use medical equipment and all required inventory. Thanks to aggregated information integration of two sides (hospital and producer) their common business will be able to leverage finance (to offshore, what we acquire locally) and reduce costs of treatment by an offshore/onshore/near-shore hospital or specialized medical center.
- The slide 10 relates to another, local-shore products category, as it was mentioned above. There is a diagnostic, treatment or medicine that is applied by qualified doctors in a hospital. However, the preventive and post-operative care needs another product cycles. Doctors do not present during treatment. Patients are self-treating them using at home or in the office the medicine, medical implant or any other medical device they may be given by their doctors/hospitals/drugstores. The typical product life cycle is shown here. The big disadvantage is that this life cycle is much relies on a patient in terms of correct usage of prescribed medicine or treating equipment. The info about short-term effects of treatment application also relies solely on observations, which are done by patient or by people observing him during a post-care.
- There are many talks nowadays about the Connected-Healthcare. It is what the Internet Of Things (IOT) trend represents. It will bring disruptions to the healthcare industry during the next 10 years. And it allows transferring the local-shore products based healthcare to local-shore services based healthcare, as it is shown on the slide 11. As in the previous two cases of financing healthcare for a patient and hospital-shore products, the information aggregation is the key. The information aggregation allows not only to transfer the product-based financial model to the service based model. It also supplies medical producers/hospitals/local doctors with the real-time monitoring and all data that relates to a patient health. As an example, there can be an integration of medicine delivery with a smart watch. It could deliver a small quantities of medical substance (when it is required) to a person’s blood stream. It can make lives of thousands allergic people, people with diabetes and old ones easier. The preventive way of healthcare would also allow to reduce qualities of medical substance by delivering only, when it is required. Travellers to wild and unhealthy places of the word may also benefit from this kind of solutions to prevent getting sick from beating by wild animals.
- There are three elements of the Aggregated Healthcare those were covered in this presentation: - Preventive focused/offshore healthcare that allows to reduce costs of healthcare by keeping people healthy and charging them for that, instead of treating them, when they are thick and charging even more. - Hospital automation. Medical Equipment with all required inventory is delivered as a service. Medical engineers will operate it distantly on the behalf of local treating doctors in order to provide a patient life data scans and applying a particular treatment. - Local-shore smart healthcare and application of medicine/treatment, when it is required. There have been many emerging startups to support the local-shore smart healthcare and hospital automation trends. There are also setbacks in industry development as Theranos’ story. Still we see many other startups in this trend. They try to find their success in particular niches. However, the winner of industry will be someone "who takes them all" of those niches and introduces a watch that can be used for a preventive healthcare and will not feel as a wearable medical device at all. Automated healthcare trend emerges in the form of start-up and projects in large companies to facilitate automatic diagnostics and operations of different kind. Those technologies may still require 5 years to become perfectly usable. However, there a clear support of development in this trend and interest by start-up investors. By taking much work from doctors and saving his/her time, the costs of healthcare are also to be saved. Last but not least, preventive based/offshore healthcare. Focusing on a particular medical discipline makes it easy to offer an attractive product to the customer based on accessing his/her conditions and finding out necessary preventive measures to keep him/her healthy in particular area. However, operating in the main stream healthcare is much different from that. Ensuring a customer by preventing different health problems from coming is a great challenge. It’s complex both in terms of figuring out the necessary prevention strategy (some aspects of health may require more attention than others) and figuring out the necessary business model to support the case. Reducing premium based on a personal preventive score provides an incentive for customer to remain healthy. It may be seen by others as introducing inequality among people in terms of paid costs for a healthcare. It is also necessary to understand that the personal health data and its usage could be a very sensitive topic. Data protection as well as gathering and analyzing is one of challenges in order to make the concept of aggregated healthcare feasible.