Ian mor

E-Health, Wealth, and Happiness: 

E-Health, Wealth, and Happiness Ian Morrison

Key Driving Forces: 

Key Driving Forces The New Economy Public Discontent with Healthcare Reluctantly Empowered Consumers Rubble of the Managed Care Revolution The Fruits of Innovation The Promise of the Web but the lack of IT Infrastructure

The Long Boom: 

The Long Boom Openness in technology, trade and communication New technology Internet and E-commerce Genetics and genomics Nanotechnology Markets and networks over government and hierearchies

America’s Technology Boom: 

America’s Technology Boom Demographics of the Baby Boom The 401 (K)ing of America The NASDAQ Wealthy: betting with the house’s money Day trading by individuals and institutions The “Who wants to be a Millionaire?” Effect Until recently, Dot.Commers had free money to buy servers, ad space, brands and people

So Where Does it End?: 

So Where Does it End? The Internet is the engine of change and productivity The hydraulics of IPOs Forced the Establishment into Dot.com If it ends it will end badly, but……. This is not 1929 yet Leverage is less Markets are more regulated Instruments are more diverse

The Second Curve: 

The Second Curve First Curve Second Curve

The Curves: 

The Curves First Curve The established way of doing business Most of the current Profit and Revenue Slowing in the long run Second Curve New business or new way of doing business Radically different from the first Source of future growth

Knowledge as Value: 

Knowledge as Value Product Price per Pound Pentium III 800 Mhz $42,893.00 Viagra 11,766.00 Gold 4,827.20 Hermes Scarf 1,964.29 Palm V 1,726.92 Saving Private Ryan on DVD 874.75 Cigarettes 100.00 Mercedes-Benz E-Class Sedan 18.98 Chevrolet Cavalier Sedan 6.76 Hot-Rolled Steel 0.19 Source: Fortune, March 20, 2000 p. 68

Drivers of the Second Curve: 

Drivers of the Second Curve New Technologies Faster, better, cheaper New Consumers Anything, any time, any place New Emerging Geographic markets Asia, Latin America, Eastern Europe

Morrison’s Five Laws of the Internet: 

Morrison’s Five Laws of the Internet Law 1: The Mother of all Commoditizers Law 2: The margin is captured by the consumer not the innovator Law 3: It is a 1 to 1 medium but the race is on to build mass brands Law 4: The Alberta Tar Sands Model of internet advertising Law 5: There is a lot of physical fulfillment in e-commerce

Internet Advertising: 

Internet Advertising Source: Nielsen Netratings, July 1999

Business to Business Infrastructure Players : 

Business to Business Infrastructure Players Hard Infrastructure: Nortel, JDS Uniphase Soft Infrastructure: Ariba, Oracle, I 2 New Plumbers: Exodus, Sapient Market Makers: Commerce One, FreeMarkets Vertical Markets: Healtheon, Metalsite Toolmakers: Kana, Siebel

Market Capitalization of Emerging Players: 

Market Capitalization of Emerging Players Selected Market Capitalizations (Billions of Dollars) March 17 April 6 April 25 I-2 26.7 16.5 12.9 Exodus 25.7 22.3 13.7 Ariba 25.6 9.3 12.9 Commerce One 15.7 8.1 7.6 Kana Communications 7.2 3.1 3.1 FreeMarkets 6.6 3.4 1.9 (Xerox) (17.1) (16.9) (17.7)

Managed Care Definition: 

Managed Care Definition An organized system of healthcare financing and delivery that takes the excess profits of hospitals, specialists, and drug companies and gives them to consultants

Public’s Satisfaction with Health Care Industry Decreases: 

Public’s Satisfaction with Health Care Industry Decreases

Public Perceptions of Whether Managed Care Improves Quality: 

Public Perceptions of Whether Managed Care Improves Quality

Physicians Are Markedly Less Satisfied: 

Physicians Are Markedly Less Satisfied Physician satisfaction with practice

Who Helps Physicians?: 

Who Helps Physicians? What or who has helped or hurt physicians ability to provide quality patient care?

Consumerization in Healthcare: 

Consumerization in Healthcare Rising Education Levels Tiering of benefits Relentless Media Coverage Direct to Consumer (DTC) Advertising Disease Group Advocacy Complementary and alternative medicine Cyberchondria

CyberChondriacs Are Real: 

CyberChondriacs Are Real 60 million adults searched the Web for health care information in 1998, rising to 70 million in 1999 That’s 68% of the 44% of Americans who were online (1998) 91% found what they needed

Harris Interactive 10,000 Chronically Ill Patients : 

Harris Interactive 10,000 Chronically Ill Patients Internet Sources used by Chronically Ill

Rising Numbers of Uninsured: 

Rising Numbers of Uninsured Employee Benefits Research Institute, Trends in Health Care Coverage, Issue Brief, 1997

The Erosion of Employer Sponsored Coverage: 

The Erosion of Employer Sponsored Coverage (The Future of Health Care, Baylor College of Medicine, 1998)

Managed Care in Turmoil: 

Managed Care in Turmoil HMOs almost as unpopular as tobacco companies Uninspired offerings Premium Increases….passed on to employees Rx costs killing managed care generally Tiering of Formularies: Let consumers trade up

Pharmaceutical Costs Are Rising: 

New Innovative Products Formularies are manageable DTC Advertising Product and Brand Awareness Detail Force is Back “For our commercial lives, on a PMPM basis, pharmaceutical costs will exceed inpatient hospital costs by the year 2000.” —HMO CEO in California Pharmaceutical Costs Are Rising

Slide26: 

Pharmaceuticals Cost Container or Cost Exploder?

Information Technology: 

Information Technology Doctors are cheap and technophobic Lack of clinical usage Massive investment required Who will pay and for what? Interoperability is coming

Slide28: 

Practice Management EMR Financial Transactions Clinical Transactions EMR Non Practice Uses Practice Management Financial Transactions Clinical Transactions Non Practice Uses Old Paradigm Doctors using Computers New Paradigm

E-Health Business Models: 

E-Health Business Models Advertising Subscriptions Paid and Sponsored (WebMD has 11 million free months) Soft E-Commerce (Services) Hard E-Commerce (Goods) Transactions (Claims, Reports) Pharmaceutical Sales and Marketing Data Mining

Seven Futures for E-Health: 

Seven Futures for E-Health Limited Cyberchondria AOL for Doctors Bloomberg of Health Bettyware (PC Version Bobware) Doctors Shopping Network E-Practice.com Platform for E-Health Redesign

Health Plan Strategies: 

Health Plan Strategies Vertical Integration for Value Virtual Single Payer Differentiation Product Channel Consumer

Provider Strategies: 

Provider Strategies Consolidator Regional Cartel Benevolent Monopolist Specialty Focus Organs Offerings Outcomes

Healthcare Strategies: 

Healthcare Strategies Health Plans Virtual Single Payer and Hamster Care Hospitals BBA Begging: Short term Cartels and benevolent monopolists Physicians Hope it stops and we go back to 1975 Pharmaceuticals Hope it never stops, worried it might

Elements of a Breakout Strategy: 

Elements of a Breakout Strategy Start with patients and physicians Demonstrate value based on customer joy Aligned incentives: Organizational capitation and micro fee for service Pay physicians for performance Use the internet for everything E-Mail, FAQs and hour long hand holding

The Role of Journalists: 

The Role of Journalists Solution seeking not just managed care bashing Even handed coverage of very uneven debates Health as a business, health as public policy, health as consumer story, health as a science and technology story, health as human interest……they are connected…… Especially in E-Health