Shift from fee for service to outcomes-driven care will drive opportun

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I presented this opinionated look at why the Medicare Shared Savings plans, ACOs and other outcomes-driven payment models are being promoted over fee for service (FFS) models and what that means for service providers and integrators. Evidence driven healthcare is required to help reduce costs and data drives evidence – the problem is that institutions are having trouble pulling together all the data they need. Current health IT systems integrate poorly and anyone that can improve that data integration to help with pricing transparency, cost transparency, care coordination, and population health management will have work for years.

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Shift from fee for service to outcomes-driven care will drive opportunities for SIs and solution providers:

Shift from fee for service to outcomes-driven care will drive opportunities for SIs and solution providers Smart VAR Healthcare Summit May 2014 Shahid N. Shah, CEO

Who is Shahid?:

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”

What’s this talk about?:

What’s this talk about? Questions answered Is disruptive innovation in healthcare possible? What does innovation in healthcare mean and how do you help customers make it happen? Where are the major areas in healthcare where innovation is required and can you grow your business by helping your customers achieve them? Key takeaways Go narrow, specialize, dive deep Understand PBU: Payer vs. Benefiter vs. User Understand why healthcare businesses buy stuff so you can serve them in ways they find you indispensable

What does “disrupting healthcare” mean?:

What does “disrupting healthcare” mean? This is $1 Trillion and the Healthcare Market is about $3 Trillion This is $1 Billion

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No, your innovation will not disrupt healthcare. I promise. The good news is that doesn’t have to.

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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.

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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.

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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.

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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.

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. You have made the job of self-diagnosing, self-treating, or preventing diseases and improving overall wellness of patients through the use of new incentives, business models, or IT. What I mean by “actionable innovation” You can help your customers achieve practical, relevant, actionable solutions

Life expectancy is increasing…:

Life expectancy is increasing… …but the rate of growth is slowing

Bacteria used to kill us the most…:

Bacteria used to kill us the most… Per 100k population, Historical Statistics of the United States, Millennial Edition

We’ve got most infections beat…:

We’ve got most infections beat… …except the flu and pneumonia Per 100k population, Historical Statistics of the United States, Millennial Edition

Infectious diseases used to kill us…:

Infectious diseases used to kill us… …but what’s left seem only to be “manageable” not easily “curable” Per 100k population, Historical Statistics of the United States, Millennial Edition

From cures to management…:

Death by age group, 1900 Death by age group, Today From cures to management… …young people don’t dye of diseases often now http://siteresources.worldbank.org/INTHSD/Resources/topics/Health-Financing/HFRChap1.pdf

What Is the Business of Health Care?:

What Is 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 – how will you be able to help them achieve those goals?   What business are you in? The Emergence of Health as the Business of Health Care Source: http ://www.nejm.org/doi/full/10.1056/NEJMp1206862

PBU: Payer vs. Benefiter vs. User:

PBU: Payer vs. Benefiter vs. User If you don’t understand the exact interplay between PBU your product will fail The payer is the person/entity that  writes the check  for your product. The person or group that  benefits  most from the use of the product. The person or group that actually  uses  the product.

What kinds of users are your customers targeting?:

What kinds of users are your customers targeting? Help your customers go narrow and deep not wide and shallow Obesity Management Wellness Management Assessment – HRA Stratification Dietary Physical Activity Physician Coordination Social Network Behavior Modification Education Health Promotions Healthy Lifestyle Choices Health Risk Assessment Diabetes COPD CHF Stratification & Enrollment Disease Management Care Coordination MD Pay-for-Performance Patient Coaching Physicians Office Hospital Other sites Pharmacology Catastrophic Case Management Utilization Management Care Coordination Co-morbidities Well Patient At Risk Chronic Care Acute Treatment Prevention Management 26% of Population 4% of Costs 35% of Population 22% of Costs 35% of Population 37% of Costs 4% of Population 36% of Costs Source: Amir Jafri, PrescribeWell

Shift from Fees for Service (FFS) to Value (FFV):

Shift from Fees for Service (FFS) to Value (FFV) The Shift The clinical model is shifting away from treatment of chronic conditions and focusing more on prevention, wellness, obesity intervention, behavior and lifestyle modification . Implications Clinical operations are shifting to hospital and physician ‘centered’ services that will rely heavily on health information technologies to monitor, coordinate, and manage care . Successful Transition in Care resulting in Reduced Hospital Readmission Rates Proactive population management Patient engagement and collaboration Disease prevention through wellness and obesity management Chronic disease management Care coordination and collaboration Metrics and analytics

How Digital Health helps in shift:

How Digital Health helps in shift

How to best identify your customers:

How to best identify your customers Help them stay away from market segmentation, focus on identifying PBU particpants Identifying your customers will depend on helping your customers identify theirs

How will your customers get paid for innovation?:

How will your customers get paid for innovation ? If you haven’t figured it out for them, customers will not figure it out for themselves

Your customers’ innovation fit determines your opportunities:

Your customers’ innovation fit determines your opportunities Most Regulation Least Regulation Be aware of regulations, don’t fear them, use them as a competitive advantage

Problems your customers looking to solve:

Problems your customers looking to solve Focus on jobs that customers need to be done, not what you want to build

What you need to know these days:

What you need to know these days

Problems you can solve for your customers:

Problems you can solve for your customers Focus on jobs that customers need to be done, not what you want to build

Do you have ideas in payment design?:

The business needs Quality and performance metrics Patient stratification Care coordination Population management Surveys and other direct-from-patient data collection Evidence-based surveillance The technology strategy Aggregated patient registries Data warehouse / repository Rules engines Expert systems Reporting tools Dashboarding engines Remote monitoring Social engagement portal for patient/family Do you have ideas in payment design? Payment models going fee for service to outcomes-driven care

Can you repurpose or enhance health data?:

Can you repurpose or enhance health data? Can you help customers use data to create new diagnostics or therapeutic solutions IOT sensors Administrative

Some stuff not to focus on:

Some stuff not to focus on 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 Incremental innovation is easier, disruptive innovation is probably more useful

Forget mobile apps, focus on health IOT:

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

Healthcare Industry Fallacies:

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.

What makes your products successful:

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

Why healthcare businesses buy stuff:

Why healthcare businesses buy stuff Healthcare businesses have complex buying processes – figure out why and what they buy

The Customer Relationship:

The Customer Relationship If you can’t figure out why they buy, see if any of the things below make sense

Health technology sector has many ups and downs:

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”

Thank You:

Thank You Visit http://www.netspective.com http :// www.healthcareguy.com E-mail shahid.shah@netspective.com Follow @ ShahidNShah Call 202-713-5409

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