Getting Beyond the Hype of “Disrupting Healthcare” and Focusing on Actionable Innovation
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This was a Keynote Address I gave at Healthcare Unbound 2013 and focused on what’s needed for healthcare technology innovation in a value- and outcomes-driven model. There’s a ton of hype surrounding disruptive technology innovation in healthcare but nothing is truly making a dent in the healthcare sector the same way as disruptions have occurred in other major segments of our economy. The slow but sure march from Fee For Service Based Care to Outcomes Driven Care has certainly started but it’s neither fast enough nor substantial enough to bend the cost curve or improve value to patients in the short term. This presentation discusses how we can get beyond the hype by focusing on actionable innovation. Specifically, I answered the following questions: * What does innovation in healthcare mean? * Where are the major areas in healthcare where innovation is required? Important takeaways this session included: * Understand PBU: Payer vs. Benefiter vs. User * Understand why healthcare businesses buy stuff so you can build the right thing
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Getting Beyond the Hype of “Disrupting Healthcare” and Focusing on Actionable Innovation
- 1. Getting Beyond the Hype of “Disrupting Healthcare” and Focusing on Actionable Innovation 10th Annual Healthcare Unbound Conference & Exhibition Shahid N. Shah, CEO
- 2. NETSPECTIVE Who is Shahid? • • • • • Serial healthcare IT entrepreneur, advisor to numerous startups, blogger, healthcare futurist 20+ years of software engineering and multi-site healthcare system deployment experience in Fortune 50 and Government sectors. 12+ years of healthcare IT and medical devices experience (blog at http://healthcareguy.com) 15+ years of technology management experience (government, non-profit, commercial) 10+ years as architect, engineer, and implementation manager on various EMR and EHR initiatives (commercial and non-profit) Author of Chapter 13, “You’re the CIO of your Own Office” www.netspective.com 2
- 3. NETSPECTIVE What’s this talk about? Questions answered Key takeaways • Is disruptive innovation in healthcare possible? • What does innovation in healthcare mean? • Where are the major areas in healthcare where innovation is required? • Go narrow, specialize, dive deep • Understand PBU: Payer vs. Benefiter vs. User • Understand why healthcare businesses buy stuff so you can build the right thing www.netspective.com 3
- 4. NETSPECTIVE What does “disrupting healthcare” mean? This is $1 Trillion and the Healthcare Market is about $3 Trillion This is $1 Billion www.netspective.com 4
- 5. No, your innovation will not disrupt healthcare. I promise. The good news is that doesn’t have to. www.netspective.com 5
- 6. No, your big data or mobile ideas will not disrupt healthcare. But if you can use them to add or extract value from the existing system, you’ll do just fine. www.netspective.com 6
- 7. No, your EHR/PHR or app will not be used by enough doctors or patients to disrupt healthcare. But if you can get even a fraction of them to use your software, you’ll do just fine. www.netspective.com 7
- 8. No, your innovation will not be accepted by permissions-oriented institutions. Find customers with a problem-solving culture willing to accept risks and reward failures. www.netspective.com 8
- 9. No, your innovation will not be easily integrated into regulated device-focused clinical workflows. Incumbent vendors will not entertain the potential of new legal liabilities without someone to share it with or new competition without direct compensation. www.netspective.com 9
- 10. NETSPECTIVE What I mean by “actionable innovation” You have made the job of identifying, diagnosing, treating, or curing diseases faster, better, or cheaper for clinicians through the use of information technology (IT) or business models. www.netspective.com You have made the job of self-diagnosing, selftreating, or preventing diseases and improving overall wellness of patients through the use of new incentives, business models, or IT. 10
- 11. NETSPECTIVE Life expectancy is increasing… …but the rate of growth is slowing www.netspective.com 11
- 12. NETSPECTIVE Bacteria used to kill us the most… Per 100k population, Historical Statistics of the United States, Millennial Edition www.netspective.com 12
- 13. NETSPECTIVE We’ve got most infections beat… …except the flu and pneumonia Per 100k population, Historical Statistics of the United States, Millennial Edition www.netspective.com 13
- 14. NETSPECTIVE Infectious diseases used to kill us… …but what’s left seem only to be “manageable” not easily “curable” Top killers in 1900 Pneumonia and influenza TB Diarrhea and enteritis Top killers today Heart disease Cancer Chronic lower respiratory diseases Per 100k population, Historical Statistics of the United States, Millennial Edition www.netspective.com 14
- 15. NETSPECTIVE From cures to management… …young people don’t dye of diseases often now Death by age group, 1900 Death by age group, Today http://siteresources.worldbank.org/INTHSD/Resources/topics/Health-Financing/HFRChap1.pdf www.netspective.com 15
- 16. NETSPECTIVE What Is the Business of Health Care? What business are you in? The Emergence of Health as the Business of Health Care • It's always better to define a business by what consumers want than by what you can produce or build – For example, whereas doctors and hospitals focus on producing health care, what people really want is health • In the future, successful doctors, hospitals, and health systems will shift their activities from delivering health services within their walls toward a broader range of approaches that deliver health. Source: http://www.nejm.org/doi/full/10.1056/NEJMp1206862 www.netspective.com 16
- 17. NETSPECTIVE PBU: Payer vs. Benefiter vs. User If you don’t understand the exact interplay between PBU your product will fail The person or group that actually uses the product. User The person or group that benefits most from the use of the product. www.netspective.com Benefiter Payer The payer is the person/entity that writes the check for your product. 17
- 18. NETSPECTIVE What kinds of users are you targeting? Go narrow and deep not wide and shallow Prevention • Education • Health Promotions • Healthy Lifestyle Choices • Health Risk Assessment 26% of Population 4% of Costs • • Obesity Management Wellness Management • • • • • • • Assessment – HRA Stratification Dietary Physical Activity Physician Coordination Social Network Behavior Modification 35% of Population 22% of Costs Management • • • Diabetes COPD CHF • • • • • Stratification & Enrollment Disease Management Care Coordination MD Pay-for-Performance Patient Coaching 35% of Population 37% of Costs • • • • Physicians Office Hospital Other sites Pharmacology • Catastrophic Case Management Utilization Management Care Coordination Co-morbidities • • • 4% of Population 36% of Costs Source: Amir Jafri, PrescribeWell www.netspective.com 18
- 19. NETSPECTIVE Defining your PBU participants is really hard Don’t focus on market segmentation, but do try to figure out who your customer is Target health sector? Number of employees? Annual sales volume? Geography? Number of hospital beds? Number of patients? Type of patients? The list goes on and on…be specific! www.netspective.com 19
- 20. NETSPECTIVE How will your customer pay for your innovation? If you haven’t figured it out for them, customers will not figure it out for themselves Direct Payment • Your best option • Very few truly disruptive technologies can be directly paid for by providers within the USA • Limited adoption of ‘traditional’ pay for service reimbursement for next generation technology www.netspective.com Direct Reimbursement Indirect Reimbursement • Second best option • Improvements in technology are outpacing payer adoption • Reimbursement will come but its time consuming and difficult • Emerging option • Payer requirements for improved quality and efficiency are creating indirect incentives to adopt innovative solutions • Solutions targeting new value-based reimbursement incentives are highly useful to medical providers 20
- 21. NETSPECTIVE Where does your innovation fit? Target the right market so you understand the regulatory impacts Be aware of regulations, don’t fear them, use them as a competitive advantage Patient Education Least Regulation www.netspective.com Patient Administration Diagnostic Tools Therapeutic Tools Therapies Most Regulation 21
- 22. NETSPECTIVE What problem will you be solving? Focus on jobs that need to be done, not what you want to build Improve medical science? Improve access to care? Reduce costs? Improve therapies? Improve diagnostics? Improve drug design? Improve drug delivery? Create better payment models? www.netspective.com 22
- 23. NETSPECTIVE How to identify the best opportunities From “Jobs to be Done” to the “Five Cs of Opportunity Identification” Circumstance • The specific problems a customer cares about • The way they assess solutions Context • Find a way to be with the customer when they encounter a problem and • Watch how they try to solve it Compensating behaviors Constraints • Develop an innovative means around a barrier constraining consumption • Determining whether a job is important enough to consider targeting • One clear sign is a customer spending money trying to solve a problem Criteria • Customers look at jobs through functional, emotional, and social lenses Source: http://blogs.hbr.org/anthony/2012/10/the_five_cs_of_opportunity_identi.html www.netspective.com 25
- 24. NETSPECTIVE Do you have ideas in payment design? Payment models going fee for service to outcomes-driven care The business needs The technology strategy • Quality and performance metrics • Patient stratification • Care coordination • Population management • Surveys and other directfrom-patient data collection • Evidence-based surveillance • • • • • • • • www.netspective.com Aggregated patient registries Data warehouse / repository Rules engines Expert systems Reporting tools Dashboarding engines Remote monitoring Social engagement portal for patient/family 26
- 25. NETSPECTIVE Can you repurpose or enhance health data? Try to use existing data to create new diagnostics or therapeutic solutions Economics Administrative www.netspective.com Phenotypics Behavioral Biochemical Genomics Proteomics IOT sensors 27
- 26. NETSPECTIVE Some stuff not to focus on Incremental innovation is easier, disruptive innovation is probably more useful • Don’t go for simple incremental innovation if you can be bold and “disruptive” but make it look like you fit into the existing ecosystem nicely • Don’t look at mHealth, look at mobility in healthcare • Don’t look at apps, look at entire systems www.netspective.com 28
- 27. NETSPECTIVE Forget mobile apps, focus on health IOT • With all the attention being paid to mHealth there’s been an useless focus on mobile apps • For the mobile apps, instead focus on mobility in healthcare through “health internet of things (IOT)” and self-care technologies www.netspective.com 29
- 28. NETSPECTIVE Healthcare Industry Fallacies • Healthcare folks are neither technically challenged nor simple techno-phobes (they’re busy saving lives) • Most product decisions are no longer made by clinical folks alone, CIOs are fully involved • Complex, full-featured, products are not easier to sell than simple, stand alone tools that have the capability of interoperating with other solutions are • Hospitals will not buy unless one proves value. • Selling into doctors offices is not easy. www.netspective.com 30
- 29. NETSPECTIVE What makes your products successful • • • • • • • • • • • Easy to explain Defendable and differentiated Attractive partnership opportunities Word of mouth opportunity Potential for PR Scaleable staff and systems Scaleable product — build once, sell many times Uncomplicated Focused Sales model is scaleable and predictable Own relationship with and information about customers www.netspective.com 31
- 30. NETSPECTIVE Why healthcare businesses buy stuff Healthcare businesses have complex buying processes – figure out why and what they buy Increase revenue (topline) Maintain capabilities Reduce costs (bottomline) Attract new patients Increase staff productivity Find your reason www.netspective.com 32
- 31. NETSPECTIVE The Customer Relationship If you can’t figure out why they buy, see if any of the things below make sense Customer Gives You Get • • • • • • • • Money Time Energy Commitment Referrals Past experience Expectations Knowledge www.netspective.com You Give Customer Gets • • • • • • • • Product Price Value Convenience Selection Service Warranty Brand 33
- 32. NETSPECTIVE Health technology sector has many ups and downs Make sure you understand where your product fits in the hypecycle Source: Gartner; “Hype Cycle for Healthcare Provider Applications and Systems, 2010” www.netspective.com 34