USHealthNet, LLC               1. Business Plan - Capsule………….               2. Business Plan - Long Version……            ...
USHealthNetRichard Lynes                                                  cto@mediaone.net                                ...
USHealthNetRichard Lynes                                                   cto@mediaone.net                               ...
USHealthNetRichard Lynes                                                 cto@mediaone.net                                 ...
USHealthNetRichard Lynes                                                 cto@mediaone.net                                 ...
The healthcare industry sits on a vast body of medical knowledge that it has failedto exploit. Practitioners and patients ...
IBM Global Healthcare Industry News - Dr. Know                                            and in many parts of the world, ...
just one procedure--hernia operations--but through sheer repetition anddedicated focus to the constant acquisition of know...
IBM Global Healthcare Industry News - Dr. Know                                            room time, drug use, etc. And we...
imperfect recall, or nerves aggravated byjangling phones. Of course, a computerdoesnt have judgment per se; it suggeststre...
optimize cost and clinical satisfaction."Ultimately, pressures to leverage information in order to glean newmedical knowle...
USHealthNet, LLC                 Seeking: $10,000,000 -$30,000,000 , Already Invested: $200,000:                  Company:...
Application ReviewBusiness Description                        (return to top)MissionUSHealthNet s charter and strategic vi...
Application Reviewand each participant is dependent on the others for parts of that information. In sum, the finance andde...
Application Reviewprofessionals, eligibility verification, and prescription processing. The Electronic Medical Recordmanag...
Application ReviewBenefits to the pharmaceutical market will be:Value Propositions - Pharmaceuticals- Access to clinical d...
Application ReviewPricing strategyThe Companys delivery strategy for this vision is to raise the management of these appli...
Application ReviewTier-III, Extranet -ProcurementOther Products:Marketing              (return to top)Marketing StrategyUS...
Application Reviewreferrals, establish medical care protocols and reimbursement policies and process claims. Suppliersanal...
Application ReviewIn addition, USHealthNet does not have contractual rights to prevent its strategic partners from enterin...
Application ReviewPrior Experience Strategic Planning and Information Technology Solutions                 Thought-Leader,...
Application Review                     Technologies and Tele-communications industries.     Employment Company            ...
Application Review                 Role Advisor                      Part-time Employee                 Title Chief Financ...
Application Reviewbe used to help fund the continued growth into international markets and additional merger / acquisition...
Application Review- Secure the management talent required- Secure the appropriate level of funding and high profile invest...
Application Review  # of employees:General Counsel:Currently interviewing several Boston based firms.Bosotn, MATBDLegal Di...
USHealthNet                   USHealthNet                         Business Plan                 for USHealthNet, a visiona...
USHealthNet                                                         TABLE OF CONTENTSUSHEALTHNET’S ‘BUSINESS PLAN’ ..........
USHealthNet16   IMMEDIATE GOALS..............................................................................................
USHealthNet                        USHealthNet’s ‘Business Plan’1   Executive SummaryUSHealthNet will provide a branded, i...
USHealthNet1.1 Market OverviewAccording to the Health Insurance Association of America, healthcare is the largest single s...
USHealthNet•   With over two thousand information technology vendors competing for their share of the    healthcare indust...
USHealthNetStudies show that 94% of this market is considered "under served" by the current applications onthe market and ...
USHealthNet•   Remotely managed through national network operations centers•   Clinical data management and analysis (Info...
USHealthNet•     Transaction processing (EDI Claims, patient eligibility and e-commerce)•     Advertising (Using the PDA, ...
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Us Health Net Llc

  1. 1. USHealthNet, LLC 1. Business Plan - Capsule…………. 2. Business Plan - Long Version…… 3. Conceptual Design Document…... 4. DiagAssist - Point-of-Care tools… 5. Screen Shots of Prototype…….… 6. ScriptPAD Specificaions…….…….
  2. 2. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 3938 USHealthNet’s ‘Executive Summary1 IntroductionUSHealthNet will provide a branded, integrated, Internet Application Service Platform (iASP) for the administrative, communications andinformation needs of healthcare professionals and for the healthcare information needs of consumers. USHealthNet’s Web destination willconsist of two distinctly different linked Web sites—a subscription-based site for healthcare professionals and a free Health, Wellness andself-service portal site for consumers. USHealthNet will be the single point of access to EDI services, enhanced communications services,branded healthcare content, and other Web-based offerings. For healthcare professionals, USHealthNet is designed to simplify healthcarepractices by integrating multiple administrative, communications and research functions into a single, easy to use Web-based solution.USHealthNet will deliver rich content and application services through its vertical healthcare portal. This portal will be segmented byhealthcare professionals, culled by specialty, and targets a consumer strategy leveraging physician patients. The consumer portal is based onan AOL model building on the community theme. Through a strategic partnership with BroadVision USHealthNet will offer apersonalization engine allowing true 1-2-1 relationship management and InfoMediary services. USHealthNet plans to aggregate the largestnumber of physicians and their patients through an aggressive Merger and Acquisition strategy.In an effort to facilitate a plug-&-play e-commerce platform for third party products and services USHealthNet will develop joint venturesand affiliate partnership alliances. This strategy will include various healthcare centric disciplines: content sourcing and publishing, PracticeManagement Systems, Clinical Information Systems, Backend EDI services, and Integrated Delivery Networks. The trend to consolidatethese operational silos will take a focused and phased implementation plan. The basis for these M & A transactions is to reach critical mass inInternet time, which will drive demand creation for both the B2B and B2C segments. Fueling the inertia created by USHealthNet’s channelstrategy will be the Company’s vision for deploying its iASP offering -- Point-of-Care Knowledge Delivery and Acquisition tools.The value proposition for both the healthcare professional and consumer will be in the Company’s ability to lower physician operating costs,increase revenues and enable quality care through measurable clinical outcome analysis, improving care delivery and disease management.USHealthNet plans on building knowledge bridges that will forge improved relationships bonding physicians, patients and a fragmentedhealthcare system. USHealthNet’s portal will become a trusted brand and premiere destination for brokering healthcare information,products and services that differentiates and provides a sustainable competitive advantage ensuring future annuity business.1.1 Market OverviewAccording to the Health Insurance Association of America, healthcare is the largest single sector of the U.S. economy, consumingapproximately $1 trillion annually, or 14% of the country’s gross domestic product. The healthcare industry consists of a complex mix ofparticipants, which includes:• ”Providers”—physicians, medical practice groups, hospitals and other organizations that deliver medical care;• ”Payers”—the government agencies, insurance companies, managed care organizations and other enterprises that pay the bills for healthcare, this includes PBMs and employers;• ”Suppliers”—clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services;• ”Consumers”—individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employers select health plans, determinebenefit levels, enroll employees and maintain employee eligibility data. Providers verify patient eligibility, collect patient histories, orderdiagnostic tests and x-rays, receive and interpret test results, render diagnoses, make referrals and submit claims to payers. Payers managereferrals, establish medical care protocols and reimbursement policies and process claims. Suppliers analyze and process patient samples ortests, provide results, fill prescriptions and submit claims for reimbursement. These and many other healthcare transactions are also highlydependent on information, and each participant is dependent on the others for parts of that information. In sum, the finance and delivery ofhealthcare requires that consistent, accurate information be shared confidentially across a large and fragmented industry.• Physicians control 85% of the national expenditures for healthcare.• The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.• The physician market size in the U. S. is over 800,000 today.• Those physicians providing outpatient care average 1647 patients per year; each with an annual per capita expenditure of $3875, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Factors contributing to these exorbitant expenses are:
  3. 3. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 3938• =Inappropriate diagnosis and prescription drug use, resulting in a significant number of hospitalizations—between 5 and 25 percent. The costs of treatment for inappropriate drug therapies are staggering - estimated at $100 billion each year1• =The healthcare industry has become an information-intensive profession plagued by substandard methods of data collection, storage, and retrieval, propagating and reinforcing the dysfunctional characteristics of a fragmented healthcare system• With over two thousand information technology vendors and systems integrators competing for their share of the healthcare industry, incompatible operational and technology silos are making it difficult to exchange vital information and critical life-saving knowledge. This need strains the resources of the healthcare community since information must be gathered from disparate sources.• =A large part of healthcare waste is related to compliance red tape, paperwork and decentralized heterogeneous data sources.1.2 The ProblemIn providing care to those patients the physicians face similar basic challenges of people, process and technology:• =Management of patient data during the course of their relationship• =No access to patient data prior to their relationship• =Limited access to patient data throughout the extended healthcare enterprise• =Inconsistent processes and deteriorating relationships across providers, payers, and suppliers• =No communication and leverage of data beyond the practice walls and across the continuum of care• =The need to keep abreast of health findings, enable peer collaboration and review new treatment protocols• =Need to contain costs (administrative, compliance, fraud ) and expand revenue opportunities and measure quality of care and lifeSeveral of the core applications needed by those physicians to manage their patients needs are currently not WEB enabled and less than 6%of the office based physicians population use any combination of the following Point-of-Care (POC) tools:• =Electronic Medical Records (family and payer demographics, medication history, allergies, problem list, etc)• =New prescription orders and refills processing, with Internet fulfillment through Drugstore.com• =Lab Order Entry and Resource Scheduling (workflow processing)• =Diagnostic Decision Support (expert knowledge systems)• =Procurement applications (e-commerce and e-business and ERP)Those core applications have not penetrated the undeserved portion of this market for the following reasons:• They are primarily client server applications that are both expensive to implement (software licensing, hardware, training and backend integration), but are also a large distraction to the practice staff and operations from a management perspective – Back Office versa Front Office - Practice Management versa Patient Management.• Managed Care has driven costs to the lowest level in history, leaving caregivers to question the quality of care and their ability to earn a living and compete in the growing Physician Provider Organization (PPO) space.• =Those practices that do invest in these applications generally only leverage a small percent of their value due largely to the fact that back-office-billing systems are complex data entry systems and do not extend themselves to support front-office POC functions.• =Since the applications are local to each practice, they do not receive the benefits of a consolidated patient treatment profile and outcomes data across practicesStudies show that 94% of this market is considered “under served” by the current applications on the market and unable to address the Point-of-Care information needs. The Total-Cost-of-Ownership (TCO) on a per seat (single-user) basis would exceed $150,000 dollars over fiveyears. With more than 325,000 physicians working in physician group practices, it is easy to see why the turnkey systems integration servicesmarket for this segment will double in revenue by the end of the decade. Its $10 billion mark today, according to leading analyst MikeKnepper of Volpe, Welty & Co. The domestic market for digital clinical information networks has been estimated at $350 billion dollars,international (including U.S.) at $1.2 - 1.3 trillion dollars yearly (the estimate based on data from the World Health Organization, the U.S.Census Bureau).1 National Pharmaceutical Council.
  4. 4. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 39381.3 The SolutionUSHealthNet’s iASP offering consists of an N-tiered application service strategy, which connects physicians and patients to USHealthNet’sportal through a single access point using a Web browser based Thin-Client interface. These services integrate critical Point-of-CareKnowledge Tools allowing secure global access over the Internet. A patient has access to a read only EMR and a Java Smart card containingvital healthcare data will be offered for free to consumers, and for healthcare professionals the full POC suite will be offered through theCompany’s premium subscription services. Extranet access is offered to branded affiliate partners, enabling local e-commerce transactionsmaximizing site stickiness while ensuring a consistent user experience and ensuring patient privacy and physician confidence.USHealthNet’s Java Enterprise Beans and Corba application component framework supporting the iASP subscription service offering willconsist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP analytical reporting services9. Java and XML Search Engine, integrating (UMLS) Tools and semantic networksThe USHealthNet vision is to provide increased functionality to a broader cross-section of the physician’s market by breaking down thecurrent barriers to entry and providing the following benefits to the physicians practice, patients and consumers, and pharmaceutical industry:1.3.1 Value Propositions – Physicians• Significantly lower cost of entry through a multi-tiered subscription model, effectively eliminating the Total-Cost-of-Ownership• More intuitive functionality, delivering a point and click information rich experience through Web based Thin-Client interface• Less intrusive infrastructure, remotely managed, eliminating hardware and software obsolescence (Outsourced to ASPs)• Guaranteed Quality of Service, by our national network operations center alliance partners• Clinical data repository management, providing analytical reporting services (InfoMediary service)• Leverage EMR database beyond the practice and across the continuum of care, location and technology independence• Reduced encounter documentation time (SOAP/Progress notes) enabling an increase in patient flow, as well as reduced liabilityAdditional benefits to the consumer and Pharmaceutical markets will be:1.3.2 Value Propositions – ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium and proprietary health and wellness content.Consumers can use the information to educate themselves on healthcare-related matters, allowing them to make better-informed healthcaredecisions. In addition, USHealthNet can e-mail updates based on a consumer’s profile and can search and retrieve member-specifichealthcare information from the Web. InfoMediary service affiliates will be marketing third party products and services using BoardVisionenabling a true 1-2-1 user experience. Affiliates target against high-level patient/consumer profiles, which do not compromise personal data,only segment level profiling data is available and this is secured in a BroadVision database behind USHealthNet’s data center fire-walls.1.3.3 Value Propositions - Pharmaceuticals• Access to clinical data repository, reducing new drug time-to-market expense and risk• Provide direct to physician and patient/consumer (DTC)2 marketing channel, influencing prescribing behavior• Access to patient base for clinical trails and analytical reporting services (Data Mining) 3• Direct link to Physicians Desktop for branded InfoMediary services• Access to patients and consumers of healthcare products through sponsorship programs on USHealthNet’s portal2 Predicted spending on DTC advertising for 1998 is close to $1.6 billion, a 60% increase over 19973 All personal healthcare information is highly confidential and USHealthNet understands its commitments to patient privacy and will notunder any circumstances compromise a patient’s personal healthcare data.
  5. 5. USHealthNetRichard Lynes cto@mediaone.net 3 Acorn StreetFounder and Chief Technology Officer Scituate, MA 02066USHealthNet, LLC (781) 545 - 39381.4 Revenue ModelsThe Company’s delivery strategy for this vision is to raise the management of these applications up into the network, delivering subscription-based access to these applications for individual practices. The applications will be Internet based, providing the scale, security and ease ofuse that has been the hall-mark and success of the WEB today.Key sources of revenue from this business will be:• Subscript to Vertical Healthcare Portal (content and community only), targeting physicians, and segmented by specialty• Subscript services for Internet Application Service Platform (iASP – Point-of-Care Knowledge Delivery tools)• InfoMediary services allowing affiliate partners to participate in the Company’s e-Commerce platform and service offerings• Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)• Transaction processing (EDI Claims, patient eligibility, transcription services and e-commerce)• Health Plan Auctions, giving PPOs and employers more control over contract negotiations with payer organizations• Advertising - using the Physicians Desktop the Company can use both a Push and a Pull model, supporting new off-line messaging1.5 Capital requirements will be:• $10 - 30 million for sales, marketing and PR, operations, partnership acquisitions, technology licensing and development, and Merger & Acquisition opportunities.• Outsource portal development and content sourcing to Agency.com.• Outsource infrastructure deployment to NaviSite, a CMGi company, and USinternetworking• Affiliates pre-paid or underwriting physician subscriptions (General content subscription levels, not premium, which offers iASP services)4• To fuel the Company’s consumer e-Commerce and InfoMediary service strategies USHealthNet’s market capitalization projections are $500 million with 10 % market penetration are not unrealistic1.5.1 Investment OpportunitiesThis is an early stage opportunity for investors:• The research has been done and the business case proven• Prototypes have been developed• Business plan has been drafted• Several key members of the management team have been identified, with an eager desire to identify additional members• Industry experts from both the medical and internet fields have committed to advisory roles• Technology partners have been identified and initial negotiations have begun• An initial venture partner has expressed a desire to participate if a second partner can be secured1.6 ManagementRichard Lynes - is the founder and CTO of USHealthNet and has a proven track record serving as CIO and CTO for several successfulcompanies. To his credit Mr. Lynes brings more then twenty-four years of industry experience in Information Systems, Tele-communications, and business. His involvement with the Internet spans more then a decade and inspirers many of his visionary strategies,bridging e-commerce/e-business, integrating ERP and SCM, and his Thought-Leadership in the areas of converging business models andtechnologies is without question. Mr. Lynes is an experienced leader, mentor and team player, and understands the value of human capital.1.7 ConclusionUSHealthNet ‘s charter and strategic vision is to provide e-commerce capabilities and service excellence for the healthcare industry bydeveloping Internet transport and Web-based clinical applications, management services, and a community healthcare information deliverynetwork. USHealthNet will be the premier provider of Point-of-Care knowledge tools and services for the healthcare industry.USHealthNet’s strategy reflects the future state, vision and direction for the healthcare industry. This premise is based on the fact that allroads lead to the patient and physician, therefore all investment decisions, including IT capital and human resources need to be alignedstrategically across all points of patient and physician interaction.4 The pre-paid or underwritten subscription services will be paid for in part from our shared revenue and joint marketing programs foraffiliate, and alliance partnerships
  6. 6. The healthcare industry sits on a vast body of medical knowledge that it has failedto exploit. Practitioners and patients pay the price.Dr. KnowBy Regina E. Herzlinger, DBA & Russell J. Ricci, MDHealthcare is one of the worlds most knowledge-intensiveindustries--yet the practitioners on its front lines are cut off from thenetwork connectivity tools that could deliver information to those whoneed it. Every day, physicians rely on their wits, their training, theirpast experiences with patients, and the information shared amongcolleagues to make critical medical judgments. And yet few attemptshave been made to codify systematically physicians experience intreating patients so that the resulting body of knowledge could be moreefficiently shared among colleagues.The healthcare industry, ofcourse, spews out "raw"information by the ton, but useful,meaningful information that couldinfluence patient outcomespositively and point to medicalbreakthroughs isnt sharedefficiently--if at all. Whilemedical bills are computerized,diagnosis and treatment recordslargely arent. Likewise, little hasbeen done to track and studypatient outcomes methodically sothat physicians could identify themost successful treatments.The answer, many believe, lies in evidence-based medicine. This newapproach has already demonstrated that it can deliver better care atlower cost--no mean feat in an industry plagued by escalating costs,
  7. 7. IBM Global Healthcare Industry News - Dr. Know and in many parts of the world, increasingly dissatisfied customers. But it is not without controversy. In fact, it may be one of the most hotly debated topics among medical practitioners today. The problem is well known. "What has been referred to as a double standard of truth in medicine persists," says Dr John Wennberg, an epidemiologist and director of The Dartmouth Atlas of Health Care in the United States, a 10-year study that has documented a wide variation in medical treatments. In the US, new drugs are tested to determine clinical efficacy, he points out, but "the outcomes of other treatment options...are not systematically subject to evaluation." The result, says Dr Wennberg, is unnecessary scientific uncertainty about medical treatments. For decades, practitioners have been concerned about wide variations in medical treatment documented the world over. Demography-based health patterns and differing health care systems contribute to these differences, but what troubles many is the extent to which incomplete information may cause disagreement among physicians about diagnoses and treatments. Enter evidence-based medicine. Heres how it works: Physicians, in concert with their colleagues, use data mining and relational databases to sift through patient histories and clinical research data in order to glean knowledge--to understand the risks and benefits of various medical treatments and how they affect different "classes" of patients. The best practices--or optimal outcomes--that emerge are then used to create treatment guidelines for subsequent patients. Ideally, computer networks could deliver these up-to-the-minute guidelines and decision-critical data directly to the point of service. It is an iterative process, with each new patient or clinical trial added so that constant learning is assured and new ways of doing things are never stifled. Some call this real-time medicine. "In the ideal world," says Dr Steve Shaha, a research director for the US-based Gartner Group, "practitioners would have the data right at their fingertips at the point of decision-making, like the heads-up display for a fighter pilot. To accomplish this, wed need a lot of computerization to capture electronic patient records and feed back critical clinical data. These data repositories would be designed to allow people to make the best possible diagnoses and choose the best treatment path." Evidence in Practice The efficient sharing of medical knowledge is probably best promulgated through an organizational approach known as the focused factory. Torontos Shouldice Hospital is one such facility. It performs
  8. 8. just one procedure--hernia operations--but through sheer repetition anddedicated focus to the constant acquisition of knowledge, it appears toperform them better than anyone else. At Shouldice, a hernia operationtakes half the time and costs half as much as at the average hospital.Whats more, it fails only 1 percent of the time, compared to a 10 to 15percent failure rate elsewhere. Capture in computer databases what caregivers at Shouldice do right, and that focused knowledge could become treatment guidelines, exportable via networks to support physicians at facilities worldwide. Thats the goal at the M.D. Anderson Cancer Center in Houston, Texas, a focused factory, and perhaps the most advanced user of evidence-based medicine in the US. Using a network-based data program enabled by the clinical evidencecollected, grouped, and deemed critical by its doctors, the centerscomputer system currently tracks patients and suggests treatmentsalong 98 different treatment paths covering 8 diseases.The results, according to Dr Mitchell Morris, associate vice presidentfor information services, are quality outcomes at lower cost. Forhysterectomies, Dr Morris cites a reduction of total hospital costs by20 percent, length of stay by 33 percent, medication costs by 35percent, and lab testing by 74 percent--all the while increasing patientsatisfaction. Comparable results have been achieved in lung resections,with a 30 percent drop in overall hospital costs, and most importantly,decreased readmissions, meaning the treatment was done right the firsttime.The practice of evidence-based medicine is not confined to focusedfactories. It is being implemented at clinics and hospitals around theworld. At the Childrens Hospital of Buffalo (CHOB) in New York, DrLinda Brodsky, director of CHOBs Center for Integrated OutcomesHealth Care, has led the institutions development of an outcome-basedapproach to medicine predicated on patient data. "We started bylooking at patient data historically," says Brodsky, "and then we askedourselves what we would like to see happen to these patientsmedically, and what would we like the outcome to be in terms ofpatient satisfaction and cost." The results were more far-reaching thanexpected, and from their initial 2 pilot programs, CHB is nowconducting over 20 studies."We saw a ripple effect," says Dr Brodsky. "We improved thesame-day surgery process and the use of anesthesia, we cut operating
  9. 9. IBM Global Healthcare Industry News - Dr. Know room time, drug use, etc. And weve seen a slow change in the method of practice--partly due to peer pressure and partly due to the fact that the results are compelling." For example, based on their training and experience, individual surgeons at CHOB tended to practice one of two methods for a specific type of eye surgery. By sharing patient data and studying outcomes, they learned that one method wasnt better than the other. Instead, different methods were warranted based on the patient profile--and doctors now apply both in a different way. Already, several large organizations in the US are convinced of the merits of evidence-based medicine. Among them are VHA, a cooperative of 1,600 hospitals and facilities serving 26 percent of US patients, and BJC Health System, the second-largest nonprofit healthcare system in the nation. VHA is building one of the countrys largest healthcare extranets, which expedites the sharing of best practices and will include a knowledge database to develop treatment pathways for major conditions like pneumonia, asthma, and acute stroke. BJC has nearly finished its efforts to centralize information within a network, with an eye toward improving patient care and outcomes through computer-assisted treatment decisions. Despite the momentum, success is hardly assured. Tens of thousands of practitioners, clinics, pharmacies, and hospitals have amassed a cornucopia of information in treating patients but have left it to molder away in paper form. Moving it to databases will be a monumental task, requiring new outlays for IT. Second, the industry will have to push hard for standards so that data can be shared. Third, patient privacy concerns will have to be met through technology solutions (which do already exist) and stringent organizational procedures. But the biggest barrier could be the concerns raised by caregivers. Evidence on Trial Some doctors and patients protest that computer-driven medicine will never be accepted. Doctors may balk at surrendering some of their expensively acquired diagnostic and treatment skills to a computer, and patients may not want to see their physicians pecking away at keyboards like airline reservation clerks during consultations. Physician resistance to evidence-based medicine has many sources. One is the old debate of man versus machine. Here, the computer has some obvious advantages, including computational memory. At the Latter Day Saints Hospital in Salt Lake City, Utah, a computer determines which antibiotic should be administered to a patient by analyzing 45 variables. A doctor typically considers three to five. The computer-fed results have led to fewer complications and shorter hospital stays. A computers "judgment" cant be clouded from a bad nights sleep,
  10. 10. imperfect recall, or nerves aggravated byjangling phones. Of course, a computerdoesnt have judgment per se; it suggeststreatments based on algorithms and availableclinical data. Nor can computers take intoaccount the ineffable--a doctorsunderstanding of how a patients personalityor circumstances might affect treatment andrecovery, for example.Moreover, healing, some argue, is an art, nota business process. To purists, computers mechanize--if notprofane--the sacred art of medicine. The art advocates have a point.The human body is not reducible to a machine. But then,evidence-based medicine is not intended to be medicine by computerfiat. Treatment guidelines only help to narrow therapeutic options; theydo not eliminate them. And guidelines arent created out of whole clothby a computer: They are the sum total of physicians expertise; theirprevious diagnoses and treatment decisions. But becauseevidence-based medicine is predicated on team decision-making andcollaboration--anathema to many professionals, not just medicalpractitioners-- such arguments sometimes fall on deaf ears.Not surprisingly, the pursuit of evidence-based medicine has given riseto charges of cookbook medicine. "Cookbook medicine," says DrMorris, "is meant to imply a simplistic approach to care, somethingbeneath the skills of a trained doctor. People are not cups of sugar andcant be quantified that way. But, in fact, weve long used cookbookmedicine in areas like clinical trials. And the reality is, the insuranceindustry is trying to develop its own medical cookbook from a purelycost-control standpoint. So weve worn down physician opposition bytelling them, The cookbook is coming. Whom do you want to write it?Insurance people or doctors?"Next in a long line of hurdles is the possibility that evidence-basedmedicine will be misused or abused. No physician will dare buck thecomputer, its suggested. Or, more worrisome, no managed-careprovider or hospital administrator will allow a physician to do so.Health care driven by an institutions cost-control objectives alone isnot the desired outcome, and if physicians take the lead, is not theinevitable one.As Dr Shaha points out, managed-care operations often stumble atattempts to institutionalize evidence-based medicine because theirmotives are suspect. But done correctly--which to Shaha necessitatesthat physicians lead the process--evidence-based medicine, hebelieves, facilitates a true patient-practitioner partnership, and "is thebest way to reduce unwanted or unproductive variation in practice and
  11. 11. optimize cost and clinical satisfaction."Ultimately, pressures to leverage information in order to glean newmedical knowledge and share it may come from several quarters.Already, the Joint Commission on the Accreditation of HealthcareOrganizations, the predominant standards and accrediting body forhealthcare organizations in the US, has announced that assessingpatient outcomes will become part of the accreditation process by1999. As standards and criteria evolve sufficiently to facilitatecomparison, the data will be made public. And people are turning tothe web in record numbers to find out more about their medicalconditions and explore new treatments--all of which they want todiscuss with their doctors. The information explosion via all mediameans that paternalistic or arbitrary systems will be under increasingassault. In other words, "we know best" policies just wont cut it.Patients will be the judge of health care and they will demandproof--evidence in the form of usable information. Some practitionerswill be ready to provide it.Regina E. Herzlinger, DBA, is a professor at the Harvard Business School and isthe author of several critically acclaimed books, including Market-Driven HealthCare: Who Wins, Who Loses in the Transformation of Americas Largest ServiceIndustry (Addison Wesley Longman, 1997).Russell J. Ricci, MD, is IBMs General Manager of the global healthcare industry.Prior to joining IBM, Dr Ricci was the president of New Health Ventures at BlueCross and Blue Shield of Massachusetts. Copyright (c) 1998 International Business Machines Corporation. Reprinted with permission from Think Leadership 1998 Volume 3 Number 2 All rights reserved Illustrations by Sandra Dionisi Think Leadership magazine online edition: http://www.ibm.com/thinkmag
  12. 12. USHealthNet, LLC Seeking: $10,000,000 -$30,000,000 , Already Invested: $200,000: Company: Contact: USHealthNet, LLC Mr. Richard Lynes 3 Acorn Street CTO and Founder Scituate, MA 02066 Phone: 781-545-3938 Web site: http://www.USHealthNet.com Fax: Email: Incorp: LLC, 7/15/99, DE cto@mediaone.net Industry 1: Physician-Practice Management Referred by: Industry 2: Internet Service Providers Red Herring Magazine USHealthNet Boston, MA Table of Contents s Company Overview s Marketing s Business Description s Management & Staffing s Product or Service s Capitalization s Sales s Financial DataCompany Overview (return to top)USHealthNet, a visionary Community Healthcare Information Delivery Network.USHealthNet will provide a branded, integrated, internet Application Service Platform (iASP) for theadministrative, communications and information needs of healthcare professionals and for the healthcareinformation needs of consumers. USHealthNets Web destination will consist of two distinctly differentlinked Web sites--a subscription-based site for healthcare professionals and a free Health, Wellness andself-service portal site for consumers. USHealthNet is a single point of access to EDI services, enhancedcommunications services, branded healthcare content, and other Web-based offerings. For healthcareprofessionals, USHealthNet is designed to simplify healthcare practices by integrating multipleadministrative, communications and research functions into a single, easy to use Web-based solution
  13. 13. Application ReviewBusiness Description (return to top)MissionUSHealthNet s charter and strategic vision is to provide e-commerce capabilities and service excellencefor the healthcare industry by developing Internet transport and Web-based clinical applications,management services, and a community healthcare information delivery network. USHealthNet will bethe premier provider of Point-of-Care knowledge tools and services for the healthcare industry.Key GoalsUSHealthNets strategy reflects the future state, vision and direction for the healthcare industry. Thispremise is based on the fact that all roads lead to the patient and physician, therefore all investmentdecisions, including IT, capital and human resources need to be aligned strategically across all points ofpatient and physician interaction.USHealthNet expects to accomplish the following by the end of Q-4 99:- Secure the appropriate level of funding and high profile investment partners- Develop strategic relationships with hosting companies, i.e. NaviSite, Digex and Usi in order to provide the data center infrastructure needed to support iASP services.- Develop syndicated content relationships with healthcare publishers.- Develop affiliate partners programs to support e-business and InfoMediary services.- Achieve milestones for Physician downloads of PDA to support service subscriptions.- Achieve milestones for Consumer B2C and B2ME InfoMediary services.Stage: startupStarted working: October 1, 1996Do you have a prototype or demo?Search KeywordsiASP, IDN, CHIN, internet Application Service Platform, Point-of-Care Knowledge Delivery andAquisition Tools, Electronic Medical Records (EMR), InfoMediary Services, B2B, B2C and B2MEProduct or Service (return to top)Problem SolvedAll healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employersselect health plans, determine benefit levels, enroll employees and maintain employee eligibility data.Providers verify patient eligibility, collect patient histories, order diagnostic tests and x-rays, receive andinterpret test results, render diagnoses, make referrals and submit claims to payers. Payers managereferrals, establish medical care protocols and reimbursement policies and process claims. Suppliersanalyze and process patient samples or tests, provide results, fill prescriptions and submit claims forreimbursement. These and many other healthcare transactions are also highly dependent on information,
  14. 14. Application Reviewand each participant is dependent on the others for parts of that information. In sum, the finance anddelivery of healthcare requires that consistent, accurate information be shared confidentially across alarge and fragmented industry.Underlying TechnologyUSHealthNets iASP offering consists of an N-tiered application service strategy, which connectsphysicians and patients to USHealthNets portal through a single access point using a Web browser basedThin-Client interface. These services integrate critical Point-of-Care Knowledge Tools allowing secureglobal access over the Internet. These POC tools will be offered for free to consumers and through theCompanys premium subscription services for healthcare professionals. Further access is offered tobranded affiliate products and services, maximizing site stickiness while ensuring a consistent userexperience.USHealthNets Java Enterprise Beans and Corba application component framework supporting the iASPsubscription service offering will consist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP9. Java XML Search Engine, integrating (UMLS) Tools and semantic networksIntellectual PropertiesDo to the nature of providing our outsourcing iASP offerings, several key technology partners have beenidentified and will require license agreements.Manufacturing ProcessWe have an outsourcing agreement in place for all custom development and integration services throughour strategic partnership with a local Boston based developer.Sales (return to top)Unique selling propositionThe Value Proposition - Healthcare ProfessionalA Web-based Thin-Client front-end application provides a Single Point of Access for healthcareprofessionals. This reduces the need for healthcare professionals to use multiple administrative,communications and information services by integrating these applications and services via the Internet.USHealthNet will enter into relationships to assist healthcare professionals in obtaining all hardware andancillary services necessary to use USHealthNet, including Internet access, computer hardware, training,and support. USHealthNets Premium subscription access to iASP and Knowledge Management Servicesprovides a suite of Point-of-Care (POC) tools, including backend EDI services for healthcare http://www.garage.com/garage/preview.shtml (3 of 15) [6/16/1999 2:46:37 AM]
  15. 15. Application Reviewprofessionals, eligibility verification, and prescription processing. The Electronic Medical Recordmanages patients across the continuum of care, ScritpPAD, Lab Order Entry and DiagAssist a DiagnosticDecision Support tool, offer healthcare professionals unparalleled control throughout the life-cycle ofcare.The USHealthNet vision is to provide increased functionality to a broader cross-section of the physiciansmarket by breaking down the current barriers and providing the following benefits to the healthcareprofessionals:Value Propositions - Physicians- Significantly lower cost of entry (Multi-tiered subscription models)- More intuitive functionality (Web based Thin-Client)- Less intrusive infrastructure (Outsourced to ASPs)- Remotely managed through national network operations centers- Clinical data management and analysis (InfoMediary service)- Leverage of database beyond the practice and across the continuum of care- Freedom from hardware and software obsolescenceAdditional benefits to the consumer market will be:Value Propositions - ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium and proprietaryhealth and wellness content. Consumers can use the information that is provided through USHealthNetwithout charge to educate themselves on healthcare-related matters, allowing them to make betterinformed healthcare decisions. In addition, USHealthNet can deliver personalized content and e-mailupdates based on a consumers profile and can search and retrieve member-specific healthcareinformation from the Web. InfoMediary service affiliates will be marketing products against high-levelpatient/consumer profiles, which do not compromise personal data, only segment level profiling data isavailable and this is secured in a BroadVision database behind USHealthNets data center fire-walls.Premium and Proprietary ContentOnline Healthcare Communities.Through planned acquisitions, USHealthNet will provide access to online communities that provideconsumers with personalized information about their health conditions and allow them to participate inmessage boards, real-time chat rooms and support networks via the Web. In addition, onlinecommunities provide member-generated content based on shared experiences.Convenience and Reliability.Through USHealthNet Web site, patients can obtain information regarding office hours, location andother matters without having to place a telephone call to the physicians office. In addition, patients canreceive healthcare information that is reviewed and approved by medical professionals under theirphysicians USHealthNet Web site -- a reliable and familiar source of information.
  16. 16. Application ReviewBenefits to the pharmaceutical market will be:Value Propositions - Pharmaceuticals- Access to clinical data repository- Reduced new drug R & D life cycle- Improving Time-to-Market- Access to patient base for clinical trails- Direct link to Physicians Desktop for promotions and advertising- Access to consumers of healthcare products (Direct to Consumers)USHealthNets Vertical Healthcare Portal is segmented by specialty for physicians and personalized onthe consumers B2C portal. USHealthNet uses a 1-2-1-personalization engine for physician profiling andpatients -- only branded affiliate products and services are offered and transacted within the sites,customized physician Intranets and knowledge delivery services are tailored based on a multi-tieredsubscription model. USHealthNet intends to add services and content in the future, including aWeb-enabled medical transcription service offering, hospital/physician referral services and insurancebenefits administration.Ease of Use.USHealthNet will offer a bundled Thin-Client Application Suite and Knowledge Management servicesprovided by a standards-based Java Physicians Desktop interface integrated with a Web browser.Therefore, subscribers who use the USHealthNet s services do not require training on multipleproprietary devices and require no knowledge of the Internet and its navigation issues.Cost Savings.USHealthNet will offer tiered InfoMediary services allowing affiliate partners to market products andservices targeted against confidential profiles achieving true personalization across all points of contactinsuring a consistent user experience. By aggregating physicians and reaching critical mass USHealthNetwill be uniquely positioned to offer procurement services, practice management service, and other thirdparty offerings through these affiliate partners. Physicians and patients will be offered financial incentiveawards for referring non-members and by participating in other marketing programs.In-addition to the USHealthNets POC tools a unified messaging platform, supporting chat, conferencingand email service will be rolled-out. USHealthNets Web sites and premium research and educationalcontent will be priced competitively and healthcare professionals will pay no more for these services thanif purchased individually.Distribution plansUSHealthNet plans to evolve demand creation by launching creative advertising campaigns acrosschannels and through strategic partners, Internet search engines, banners ads and more traditional mediaplays. The Company has started discussions with Omnicom subsidiaries that will lead to strong strategicpartnerships. These subsidiaries provide brand strategy, PR and media buys, campaigns, andUSHealthNet will partner with Agency.com for the development of the Companys Portal sites.
  17. 17. Application ReviewPricing strategyThe Companys delivery strategy for this vision is to raise the management of these applications up intothe network, delivering subscription access to these applications to individual practices. The applicationswill be Internet based, providing the scale, security and ease of use that has been the hall-mark andsuccess of the WEB today.Key sources of revenue from this business will be:- Subscript to Vertical Healthcare Portal (Segmented based on specialty)- Subscript service for Internet Application Service Platform (iASP - Point-of-Care tools)- InfoMediary services allowing affiliate partners to participate in the Companys e-Commerce- Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)- Transaction processing (EDI Claims, patient eligibility and e-commerce)- Advertising (Using the PDA, the Company can us both a Push and a Pull model)MarginsThe annuity service based model supporting multi-tiered revenue streams can not be compared to themore traditional product model companies, which report gross margins of only 30-60%.Top 3 ProductsName Description Avg. PriceTier-I, Point-of-Care Provides critical life saving SubscriptionsKnowledge Acquisition & knowledge at the point of service (tiered pricing)Delviery Tools InfoMediary services allowingTier-II, InfoMediary Variable and affiliate partners to market productsServices fixed pricing -- and services TransactionTier-III, Extranet - iASP, shared e-commerce/e-business model - standardProcurement platform and vertical portal p Year 1 Year 2 Year 3 Year 4 Year 5 1998 1999 2000 2001 2002Name units units units units unitsTier-I, Point-of-CareKnowledge Acquisition &Delviery ToolsTier-II, InfoMediaryServices
  18. 18. Application ReviewTier-III, Extranet -ProcurementOther Products:Marketing (return to top)Marketing StrategyUSHealthNets channel strategy will be organized according to its four main customer segments:providers, payers, suppliers and consumers. USHealthNets direct sales force will target significantpotential customers in each market segment by region. In certain instances, USHealthNets direct salesforce will work with complementary brokers, value-added resellers and systems integrators to delivercomplete solutions for major customers. In addition, senior management plays an active role in the salesprocess by cultivating industry contacts. USHealthNet markets its applications and services throughdirect sales contacts, strategic relationships, the sales and marketing organizations of its strategicpartners, participation in trade shows articles in industry publications. USHealthNet will attend a numberof major trade shows each year and will sponsor executive conferences, which feature industry expertswho address the information systems needs of large healthcare organizations. USHealthNet will supportits sales force with technical personnel who perform demonstrations of USHealthNets applications andassist clients in determining the proper hardware and software configurations.The key to market dominance, is first mover advantage, value proposition, execution, and most importantaggregating users through acquisition and retention strategies. A parallel strategy is to make the cost ofentry to high for competitors and the switching costs for users to high for consideration.Target MarketAccording to the Health Insurance Association of America, healthcare is the largest single sector of theU.S. economy, consuming approximately $1 trillion annually, or 14% of the countrys gross domesticproduct. The healthcare industry consists of a complex mix of participants, which includes:- "Providers" -- physicians, medical practice groups, hospitals and other organizations that deliver medical care;- "Payers" -- the government agencies, insurance companies, managed care organizations and other enterprises/employers that pay the bills for healthcare;- "Suppliers" -- clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services; and- "Consumers" -- individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement. Employersselect health plans, determine benefit levels, enroll employees and maintain employee eligibility data.Providers verify patient eligibility, collect patient histories, order diagnostic tests and x-rays, receive andinterpret test results, render diagnoses, make referrals and submit claims to payers. Payers manage
  19. 19. Application Reviewreferrals, establish medical care protocols and reimbursement policies and process claims. Suppliersanalyze and process patient samples or tests, provide results, fill prescriptions and submit claims forreimbursement. These and many other healthcare transactions are also highly dependent on information,and each participant is dependent on the others for parts of that information. In sum, the finance anddelivery of healthcare requires that consistent, accurate information be shared confidentially across alarge and fragmented industry.- The U.S. Healthcare expenditure is $1.2 trillion and growing.- Physicians control 85% of the national expenditures for healthcare.- The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.- The physician market size is over 800,000 today.- Those physicians provide care to an average of 1647 patients per year; each with an annual per capita expenditure of $3633, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Forrester Research, Inc. reports that the overall market for outsourcing packaged software applicationswill grow from approximately $1 billion in 1997 to over $21 billion by 2001. These services includepackaged application software implementation and support, customer support and network developmentand maintenance. Reasons for the growth in outsourcing include:- The scarcity of information technology professionals.- The challenges faced by a non-technical company in hiring, motivating and retaining qualified application engineers and information technology employees.- The desire by companies to focus on their core business.- The difficulties that businesses experience in developing and maintaining their networks and software applications.- The fast pace of technical change that shortens time to obsolescence and forces increases in capital expenditures as companies attempt to keep up with leading technologies.These factors do not reflect the growth of more tranditional e-commerce/e-business projections.CompetitionUpon first glance the competitive situation may be perceived as high risk due to the large number ofInternet healthcare content sites, vendor/systems integrators, and back office billing system vendors.USHealthNet sees short-term competition from Internet sites that have subscription models targetinghealthcare providers and consumers. USHealthNet is differentiating itself by offering premium servicesfor healthcare content alongside application services.Many of the Companys current and potential competitors have greater resources to devote to thedevelopment, promotion and sale of their services; longer operating histories; greater financial, technicaland marketing resources; greater name recognition; and larger subscriber bases than the USHealthNetand, therefore, have a significantly greater ability to attract subscribers and advertisers. Many of thesecompetitors may be able to respond more quickly than the USHealthNet to new or emerging technologiesin the Internet and the personal communications market and changes in Internet user requirements and todevote greater resources than the USHealthNet to the development, promotion and sale of their services.
  20. 20. Application ReviewIn addition, USHealthNet does not have contractual rights to prevent its strategic partners from enteringinto competing businesses or directly competing with the USHealthNet. While these statements can bepositioned as a negative resulting in a high-risk investment, they represent the reality of marketconditions for every company today and well into the future.Competitive AdvantageUSHealthNets integrated Web service delivery model (iASP) positions the true competitive situationwith a more focused strategic value proposition.Many of the more sessioned players in the healthcare market have been traditional product companies,which would prevent them from competing in the Internet service space in the short-term. Thesecompanies are not the usual first-movers and early adopters. They have funded business plans buildaround a product model company and operational structures to support them. Product development lifecycles constrain traditional product companies from the point of view that measures success bytime-to-market, mass customization, personalization, and elasticity to rapidly changing market dynamics.Many of these companies will seek security in partnership strategies that include them in the marketsnatural trends toward consolidation and disintermediation.Management & Staffing (return to top)Full-time permanent employees: 1Part-time employees: 0Contractors: 7Critical positions not yet filledCEO, COO, Chief Marketing Officer, SVP Business Development, VP Research & DevelopmentPersonnel Richard Lynes Role Founder Title CTO Functions Provide IT vision and strategy alignment http://www.garage.com/garage/preview.shtml (9 of 15) [6/16/1999 2:46:37 AM]
  21. 21. Application ReviewPrior Experience Strategic Planning and Information Technology Solutions Thought-Leader, achieving improved operating efficiency through IT and business strategy alignment, and increased shareholder value by leveraging technology as a competitive differentiator. Professional Competencies: - Strategic IT and Business planning for e-commerce, e-business and Knowledge Management as a competitive differentiation in the B2B, B2C and B2ME markets, integrating both buy-side, sell-side and customer facing processes - Mentoring companies executives in their migration from traditional mass marketing and operational practices to those of 1-2-1 personalization; Customer Relationship Marketing (CRM) utilizing interactive media, database marketing, and the integration of legacy Line-of-Business applications, including SCM, OLR and ERP solutions - Guiding executives on the sweeping changes, trends and impacts of technology on competitive strategies, business objectives and business transformation - Technical team lead on the design, development and deployment of scaleable Enterprise-wide information, software and systems architectures. Supporting Intranet/Extranet application infrastructure components for MRO purchasing and e-catalog procurement, Human Resources, Sale Force Automation, Knowledge Management, and strategies for linking channel partners, suppliers and customers. Serving as CIO and CTO for several market leaders, Mr. Lynes past successes have been achieved by developing visionary technology strategies and facilitating information flow within the senior management strategic planning function. By improving knowledge utilization through linking corporate stakeholder processes and objectives, client business strategies, and facilitating cooperation between cross-functional teams, Mr. Lynes insights have created a more customer centric approach and methodology. Colleagues have often described Mr. Lynes as an approachable team player who has a proven knack of forecasting and keeping them abreast of critical changes in the dynamic, fast paced world of technology. His talent does not come from a crystal ball, but from a substantial career of following the movements within both the Information
  22. 22. Application Review Technologies and Tele-communications industries. Employment Company Title Years History Sequitor Medical EVP, CIO 2 Technology, Inc. Bronner Slosberg VP, CTO 3 Humphrey CommSoft Technoloy, VP, R & D 3 Inc. Education Institution Degree Year Georgia Tech BS Computer Science 1980 Chris Bulter Role Advisor Other Boards Opus2Other Affiliations Agency.com Wendy Roberts Role AdvisorOther Affiliations Agency.com Jack Barette Role AdvisorOther Affiliations Agency.com Don Leavitt Role AdvisorOther Affiliations Harvard Business School Pat Morand Role Advisor Kelly Mahoney Role AdvisorOther Affiliations Essential.com Jeff Heywood
  23. 23. Application Review Role Advisor Part-time Employee Title Chief Financial Officer Other Boards StarQuest Software, Inc.Other Affiliations Adobe Systems, Inc. Functions Responsible for Companys financal modeling, M & A strategies, VC and partnership development.Capitalization (return to top) Shares $ Invested Founders: 10,000,000 $200,000 Other Senior Managers: Other Employees: Outside Directors: Other Investors: Total: 10,000,000 $200,000Current investors?We currently have none.Do you have any debt financing?No...Total funding to date: $200,000How have funds been used to date?I have bootstrapped all the research, prototype development, and strategy. No other funding vehicle hasbeen approached todate.Now seeking: $10,000,000How will the money you are now trying to raise be used?USHealthNets working capital requirements for fiscal year 1999 and 2000 will be raised throughexternal private angle investors, partners and institutional equity funding vehicles in the amount of $10million, along with additional commitments to enable the Companys acquisition strategy. Projectedramp-up costs, operations, sales and marketing, and product/service development will be running at anestimated average monthly burn rate of $550,000 for the first eighteen months. As part of our strategy,year two revenue coupled with stock valuations and market capitalization, as well as a possible IPO, will
  24. 24. Application Reviewbe used to help fund the continued growth into international markets and additional merger / acquisitionopportunitiesDo you have any preferred skills for your investors?USHealthNet seeks professional high profile investment partners that will provide assistance indeveloping a world class management team, board-of-directors and advisory board. The Company wouldalso expect our investment partners to actively solicit their network for opportunities in the area of M &A strategy and strategic partnerships. Furthermore, the Company would expect to have access to the rightinvestment bankers in order to build the relationships with analysis and others in preparations for takingthe Company public.Dream investors?1. Pharmaceutical Companies2. AOL and Amazon.com3. Intel (as part of their data center strategy)4. Ericsson Inc., IBM, Sun5. CMGi Ventures, AT&T Ventures6. ibankersWhat are you offering?EquityHow else have you tried to raise money?I have not started this process until now.Exit StrategyUSHealthNets exit strategy is simple, Longer term, as measured in Internet time (12-18 months),Healtheon/WebMD, Synetics, EMR (Electronic Medical Records) vendors and other competitors maybegin to view USHealthNet as a valued asset. USHealthNet views itself as a possible acquisitioncandidate for Healtheon/WebMD, Synetics or AOL. USHealthNet and its investors will evaluate both M& A and IPO strategies as a function of the Companys requirements for new capital and current capitalmarket conditions.The downside to any investment needs to be articulated as a high risk and assess the leverage points toillustrate the high returns and value of the Companys tangible assets, Intellectual Property, partnershipsand subscriber-base. USHealthNets investment in IT based assets will be evidenced by planned patentfilings, as well as the unique Web based Java/Corba framework, which delivers on the promise ofUSHealthNets iASP offerings.Understanding this, the worst case scenario is that the Company assets will be acquired by one of severalInternet based healthcare market leaders. This minimizes the risks as it is a win - win for those who canafford to stay in.Top 3 ConcernsImmediate GoalsUSHealthNet expects to accomplish the following by the end of Q-4 99:
  25. 25. Application Review- Secure the management talent required- Secure the appropriate level of funding and high profile investment partners- Develop strategic relationships with hosting companies, i.e. NaviSite, Digex and Usi in order to provide the data center infrastructure needed to support iASP services.- Develop syndicated content relationships with healthcare publishers.- Develop affiliate partners programs to support e-business and InfoMediary services.- Achieve milestones for Physician downloads of Physician Desktop Applications to support service subscriptions.- Achieve milestones for Consumer B2C and B2ME InfoMediary services.3 References or customers1. Malcom Speed, Chairman & CEO, Rapp Collins2. Wendy Roberts, Partner, Agency.com3. Kelly Mahoney, Chief Marketing Officer, Essential.comFinancial Data (return to top)Capital needed to break even: $30,000,000Quarter to break even: 3/2000Fiscal Year End: 12/31Months of cash on hand: 0Current revenues: $0 (per month)Current expenses: $20,000 (per month) ($ numbers in Year 1 Year 2 Year 3 Year 4 Year 5 000s) Year: 1998 1999 2000 2001 2002 Revenues: $0 $0 Cost of goods: Operating Expenses: Net income: Investment received: Capital Expenditures: End of year cash balance:
  26. 26. Application Review # of employees:General Counsel:Currently interviewing several Boston based firms.Bosotn, MATBDLegal Disputes?"none"Bank: Fleet and Bank BostonBoston, MATBDAccountants: Thomas Britt, CPAWater Town, MATom BrittAudited Financials? noFor how long? (in months)Anything else?I do not wish to have any of this information shared with parties whom may have invested in Healhteonor WebMD.The financial projections are not finished and therefore are not included because of the ambiguityinvolved in modeling these service based revenue streams. However, a ten- percent market sharerepresenting 80,000 physician subscribers and five-percent of the insured population or 12 millionpatient/consumer members represents a multi-billion dollar annuity based opportunity.
  27. 27. USHealthNet USHealthNet Business Plan for USHealthNet, a visionary Health Care Information Delivery System. June 11, 1999 Business Plan Copy Number [1 of 50 ]This document contains confidential and proprietary information belonging exclusively to Richard Lynes Richard Lynes Chief Technology Officer 3 Acorn Street Scituate, MA 02066 (781) 545-3938 cto@mediaone.netThis is a business plan. It does not imply an offering of Securities. Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  28. 28. USHealthNet TABLE OF CONTENTSUSHEALTHNET’S ‘BUSINESS PLAN’ .................................................................................................................. 11 EXECUTIVE SUMMARY ............................................................................................................................... 1 1.1 MARKET OVERVIEW........................................................................................................................................ 2 1.2 THE PROBLEM ................................................................................................................................................. 3 1.3 THE SOLUTION ................................................................................................................................................ 4 1.3.1 Value Propositions – Physicians........................................................................................................... 4 1.3.2 Value Propositions – Consumers .......................................................................................................... 5 1.3.3 Value Propositions - Pharmaceuticals.................................................................................................. 5 1.4 REVENUE MODELS .......................................................................................................................................... 5 1.5 CAPITAL REQUIREMENTS WILL BE: .................................................................................................................. 6 1.5.1 Investment Opportunities ...................................................................................................................... 62 INTRODUCTION ............................................................................................................................................. 73 THE BUSINESS ................................................................................................................................................ 94 THE STRATEGIC OPPORTUNITY.............................................................................................................. 95 THE MARKET POTENTIAL/MARKET SIZE/MARKET GROWTH RATES ....................................... 96 THE MARKET DRIVERS/KEY TRENDS .................................................................................................. 107 THE OPPORTUNITY .................................................................................................................................... 108 THE SOLUTION............................................................................................................................................. 119 THE PRODUCTS/OFFERINGS ................................................................................................................... 1110 THE VALUE PROPOSITION — HEALTHCARE PROFESSIONAL..................................................... 12 10.1 EASE OF USE............................................................................................................................................. 12 10.2 COST SAVINGS.......................................................................................................................................... 1211 THE VALUE PROPOSITION — CONSUMERS ....................................................................................... 13 11.1 PREMIUM AND PROPRIETARY CONTENT ................................................................................................... 13 11.1.1 Online Healthcare Communities ......................................................................................................... 13 11.1.2 Convenience and Reliability................................................................................................................ 1312 THE STRATEGIC GRIPPER: “THAT’S FANTASTIC” .......................................................................... 1313 ADVERTISING AND PUBLIC RELATIONS............................................................................................. 1414 THE BUSINESS MODEL .............................................................................................................................. 1415 SALES AND MARKETING .......................................................................................................................... 14 Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  29. 29. USHealthNet16 IMMEDIATE GOALS.................................................................................................................................... 1517 COMPETITION.............................................................................................................................................. 1518 OUR DIFFERENTIATORS........................................................................................................................... 1519 USE OF FUNDS .............................................................................................................................................. 1620 EXIT STRATEGY .......................................................................................................................................... 1621 FINANCIAL ANALYSIS/PRO-FORMA ESTIMATES ............................................................................. 1622 MANAGEMENT TEAM ................................................................................................................................ 1723 DEVELOPMENT TEAM............................................................................................................................... 1824 ADVISORY BOARD ...................................................................................................................................... 1825 CONCLUSION ................................................................................................................................................ 22 Confidential & Proprietary Property of Richard Lynes Draft Only – June 11, 1999
  30. 30. USHealthNet USHealthNet’s ‘Business Plan’1 Executive SummaryUSHealthNet will provide a branded, integrated, internet Application Service Platform (iASP)for the administrative, communications and information needs of healthcare professionals and forthe healthcare information needs of consumers. USHealthNet’s Web destination will consist oftwo distinctly different linked Web sites--a subscription-based site for healthcare professionalsand a free Health, Wellness and self-service portal site for consumers. USHealthNet is a singlepoint of access to EDI services, enhanced communications services, branded healthcare content,and other Web-based offerings. For healthcare professionals, USHealthNet is designed tosimplify healthcare practices by integrating multiple administrative, communications andresearch functions into a single, easy to use Web-based solution.USHealthNet will deliver rich content and application services through its vertical healthcareportal. This portal will be segmented by healthcare professionals, culled by specialty, and targetsa consumer strategy leveraging physician patients. The consumer portal is based on an AOLmodel building on the community theme. Through a strategic partnership with BroadVisionUSHealthNet will offer a personalization engine allowing true 1-2-1 relationship managementand InfoMediary services. USHealthNet plans to aggregate the largest number of physicians andtheir patients through an aggressive Merger and Acquisition (M & A) strategy.In an effort to facilitate a plug-&-play e-commerce platform for third party products and servicesUSHealthNet will develop joint ventures and affiliate partnership alliances. This strategy willinclude various healthcare centric disciplines: content sourcing and publishing, PracticeManagement Systems, Clinical Information Systems, Backend EDI services, and IntegratedDelivery Networks. The trend to consolidate these operational silos will take a focused andphased implementation plan. The basis for these M & A transactions is to reach critical mass inInternet time, which will drive demand creation for both the B2B and B2C segments. Fuelingthe inertia created by USHealthNet’s channel strategy will be the Company’s vision fordeploying its iASP.The value proposition for both the healthcare professional and consumer will be in theCompany’s ability to lower physician operating costs, increase revenues and provide quality carethrough measurable clinical outcome analysis. USHealthNet’s portal will become a trusted brandand premiere destination for brokering healthcare information, products and services thatdifferentiates and provides a sustainable competitive advantage ensuring future annuity business. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 1 - June 11, 1999
  31. 31. USHealthNet1.1 Market OverviewAccording to the Health Insurance Association of America, healthcare is the largest single sectorof the U.S. economy, consuming approximately $1 trillion annually, or 14% of the countrysgross domestic product. The healthcare industry consists of a complex mix of participants, whichincludes:• "Providers" -- physicians, medical practice groups, hospitals and other organizations that deliver medical care;• "Payers" -- the government agencies, insurance companies, managed care organizations and other enterprises that pay the bills for healthcare, this includes employers;• "Suppliers" -- clinical laboratories, pharmaceutical companies, and other groups that provide tests, drugs, x-rays and other services; and• "Consumers" -- individual patients who receive medical care, and the government agencies, employers and other organizations that represent groups of individuals.All healthcare participants rely heavily upon information to perform their roles in the industry.Individuals compare medical plans, choose physicians and submit claims for reimbursement.Employers select health plans, determine benefit levels, enroll employees and maintain employeeeligibility data. Providers verify patient eligibility, collect patient histories, order diagnostic testsand x-rays, receive and interpret test results, render diagnoses, make referrals and submit claimsto payers. Payers manage referrals, establish medical care protocols and reimbursement policiesand process claims. Suppliers analyze and process patient samples or tests, provide results, fillprescriptions and submit claims for reimbursement. These and many other healthcaretransactions are also highly dependent on information, and each participant is dependent on theothers for parts of that information. In sum, the finance and delivery of healthcare requires thatconsistent, accurate information be shared confidentially across a large and fragmented industry.• The U.S. Healthcare expenditure is $1.2 trillion and growing.• Physicians control 85% of the national expenditures for healthcare.• The administrative costs for providing healthcare have been estimated at between $198 billion and $250 billion per year.• The physician market size is over 800,000 today.• Those physicians provide care to an average of 1647 patients per year; each with an annual per capita expenditure of $3633, representing an aggregate annual billing of $236 Billion for 735 million office visits per year.Factors contributing to these exorbitant expenses are:• Inappropriate diagnosis and prescription drug use, resulting in a significant number of hospitalizations -- between 5 and 25 percent. The costs of treatment for inappropriate drug therapy are staggering - estimated at $100 billion each year, National Pharmaceutical Council.• The healthcare industry has become an information-intensive profession plagued by substandard methods of data collection, storage, and retrieval. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 2 - June 11, 1999
  32. 32. USHealthNet• With over two thousand information technology vendors competing for their share of the healthcare industry, incompatible operational and technology silos are making it difficult to exchange vital information and critical life-saving knowledge. This need strains the resources of the healthcare community since information must be gathered from disparate sources.• A large part of healthcare waste is related to red tape, paperwork and decentralized data sources.1.2 The ProblemIn providing care to those patients the physicians face similar basic challenges:• Management of patient data during the course of their relationship• Lack of access to patient data prior to their relationship• Lack of access to patient date throughout the extended healthcare enterprise• Inconsistent processes and deteriorating relationships across providers• No communication and leverage of data beyond the practice walls• Need to keep abreast of health findings and new treatments• Need to contain costs and expand revenue opportunitiesSeveral of the core applications needed by those physicians to manage their practices needs arecurrently not WEB enabled and less than 6% of office based physicians use any combination ofthe following Point-of-Care (POC) tools:• Electronic Medical Records• New prescription orders and refills processing• Lab Order Entry and Results• Diagnostic Decision Support• Procurement applicationsThose core applications have not penetrated the undeserved portion of this market for thefollowing reasons:• They are primarily client server applications that are both expensive to implement (software licensing, hardware, training), but are also a large distraction to the practice operation from a management perspective – Back Office versa Front Office.• Managed Care has driven the cost to new levels, leaving caregivers to question the quality of care and their ability to earn a living and compete in the growing PPO space.• Those practices that do invest in these applications generally only leverage a small precent of their value due largely to the fact that back-office billing systems are complex data entry systems and do not extend themselves to support front-office Point-of-Care services.• Since the applications are local to each practice, they do not receive the benefits of consolidated patient or treatment and outcome data across practices. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 3 - June 11, 1999
  33. 33. USHealthNetStudies show that 94% of this market is considered "under served" by the current applications onthe market and unable to address the Point-of-Care information needs. The Total-Cost-of-Ownership1 on a per seat basis would be $150,000 dollars over five years. With more than325,000 physicians working in physician group practices, it is easy to see why turnkey systemsintegration services market segment will double in revenue by the end of the decade, from its$10 billion mark today, according to leading analyst Mike Knepper of Volpe, Welty & Co.The domestic market for digital clinical information networks has been estimated at $350 billiondollars, international (including U.S.) at $1.2 - 1.3 trillion dollars yearly (the estimate based ondata from the World Health Organization, the U.S. Census Bureau).1.3 The SolutionUSHealthNet’s iASP offering consists of an N-tiered application service strategy, whichconnects physicians and patients to USHealthNet’s portal through a single access point using aWeb browser based Thin-Client interface. These services integrate critical Point-of-CareKnowledge Tools allowing secure global access over the Internet. These POC tools will beoffered for free to consumers and through the Company’s premium subscription services forhealthcare professionals. Further access is offered to branded affiliate products and services,maximizing site stickiness while ensuring a consistent user experience.USHealthNet’s Java Enterprise Beans and Corba application component framework supportingthe iASP subscription service offering will consist of nine integrated applications:1. LifeTime (Longitudinal Electronic Medical Records)2. DiagAssist (Diagnostic Decision Support System)3. ScriptPad (Prescription and Drug Interaction Services)4. LabDirect (Lab Order and Results)5. Enterprise Workflow Engine and XFDL/XML based Forms Engine6. Enterprise Resource Planning (ERP)7. Enterprise Master Patient Index (EMPI)8. Clinical Data Repository and OLAP9. Java XML Search Engine, integrating (UMLS) Tools and semantic networksThe USHealthNet vision is to provide increased functionality to a broader cross-section of thephysicians market by breaking down the current barriers and providing the following benefits tothe physician practice:1.3.1 Value Propositions – Physicians• Significantly lower cost of entry (Multi-tiered subscription models)• More intuitive functionality (Web based Thin-Client)• Less intrusive infrastructure (Outsourced to ASPs)1 Review http://www.fujitsu-computers.com/coo/main.html and http://www.info-edge.com/55090301.htm Confidential & Proprietary Property of Richard Lynes Draft Only – Page 4 - June 11, 1999
  34. 34. USHealthNet• Remotely managed through national network operations centers• Clinical data management and analysis (InfoMediary service)• Leverage of database beyond the practice and across the continuum of careAdditional benefits to the consumer market will be:1.3.2 Value Propositions – ConsumersUSHealthNet provides healthcare consumers with a single point of access to premium andproprietary health and wellness content. Consumers can use the information that is providedthrough USHealthNet without charge to educate themselves on healthcare-related matters,allowing them to make better informed healthcare decisions. In addition, USHealthNet candeliver personalized content and e-mail updates based on a consumers profile and can search andretrieve member-specific healthcare information from the Web. InfoMediary service affiliateswill be marketing products against high-level patient/consumer profiles, which do notcompromise personal data, only segment level profiling data is available and this is secured in aBroadVision database behind USHealthNet’s data center fire-walls.2Benefits to the pharmaceutical market will be:1.3.3 Value Propositions - Pharmaceuticals• Access to clinical data repository• Reduced new drug time-to-market expense• Access to patient base for clinical trails3• Direct link to Physicians Desktop for promotions• Access to consumers of healthcare products1.4 Revenue ModelsThe Company’s delivery strategy for this vision is to raise the management of these applicationsup into the network, delivering subscription access to these applications to individual practices.The applications will be Internet based, providing the scale, security and ease of use that hasbeen the hall-mark and success of the WEB today.Key sources of revenue from this business will be:• Subscript to Vertical Healthcare Portal (Segmented based on specialty)• Subscript service for Internet Application Service Platform (iASP – Point-of-Care tools)• InfoMediary services allowing affiliate partners to participate in the Company’s e-Commerce• Sponsorships, bounty and bundles (Up-sell and Cross-sell opportunities)2 All personal healthcare information is highly confidential and USHealthNet understands its commitments topatient privacy and will not under any circumstances compromise a patient’s personal healthcare data3 Ibid. Confidential & Proprietary Property of Richard Lynes Draft Only – Page 5 - June 11, 1999
  35. 35. USHealthNet• Transaction processing (EDI Claims, patient eligibility and e-commerce)• Advertising (Using the PDA, the Company can us both a Push and a Pull model)1.5 Capital requirements will be:• $10 - 30 million for sales, marketing and PR, operations, partnership acquisitions, technology licensing and development, and M & A opportunities.• Outsourced portal development to Agency.com.• Outsourced infrastructure deployment to NaviSite, a CMGi ISP, and USinternetworking• Affiliates pre-paid or underwriting the first 100,000 physician subscriptions (General content subscription levels, not premium, which offers iASP services)4• To fuel the Company’s consumer e-Commerce and InfoMediary services strategiesUSHealthNet’s market capitalization projections are $500 million with 10 % market penetrationare not unrealistic. Anticipated revenue growth will be:1.5.1 Investment OpportunitiesThis is an early stage opportunity for investors:• The research has been done and the business case proven• Prototypes have been developed• Business plan has been drafted• Several key members of the management team have been identified, with an eager desire to identify additional members• Industry experts from both the medical and internet fields have committed to advisory roles• Technology partners have been identified and initial negotiations have begun• An initial venture partner has expressed a desire to participate if a second partner can be securedUSHealthNet s charter and strategic vision is to provide e-commerce capabilities and serviceexcellence for the healthcare industry by developing Internet transport and Web-based clinicalapplications, management services, and a community healthcare information delivery network.USHealthNet will be the premier provider of Point-of-Care knowledge tools and services for thehealthcare industry.USHealthNet’s strategy reflects the future state, vision and direction for the healthcare industry.This premise is based on the fact that all roads lead to the patient and physician, therefore allinvestment decisions, including IT, capital and human resources need to be aligned strategicallyacross all points of patient and physician interaction.4 The pre-paid or underwritten subscription services will be paid for in part from our shared revenue and jointmarketing programs for affiliate, and alliance partnerships Confidential & Proprietary Property of Richard Lynes Draft Only – Page 6 - June 11, 1999

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