Healthcare Unbound State of the Union Opening Keynote Presentation

1. Healthcare UnboundState of the UnionOpening Keynote Presentation July 2006 Boston, MA Vince Kuraitis JD, MBA Better Health Technologies, LLC www.bhtinfo.com (208) 395-1197

3. Agenda • “Remarkable” Events Of the Past Year • Everything You Know is Wrong What You Think You “Know” • The killer app for HU technologies is chronic disease management • Providers, especially physicians, are technology curmudgeons • HU is about Home Sweet Home • A $34 B HU market by 2015? No way! The “Truth” revealed

4. I. “Remarkable” Events of the Past Year

5. “Remarkable” Events Of The Past Year • Continua created through Intel’s leadership • Medicare pilot/demo projects launched • Medicare Health Support (MHS) • Care Management for High Cost Beneficiaries (CMHCB) • American Health Information Community (AHIC) breakthrough projects launched • Secure messaging • Personal Health Records • Industry consolidation • DM: Matria acquires CorSolutions; Healthways acquires Lifemasters • Philips acquires Lifeline • Physicians (AAFP and ACP) endorse the “medical home” model • Qualcomm announces plans for a healthcare MVNO • SPAN study finds: DM + RPM > DM alone • UK – National framework agreement for telecare achieved • VeriChip announces IPO plans • California enacts the Tom Cruise Ultrasound Bill • ....and many others

6. II. Rethinking assumptions... ...which have created conventional wisdom

7. What You Think You “Know” A) The killer app for HU technologies is chronic disease management The “Truth” Hospital-At-Home (HAH) Promises to Be the Biggest Disruption of All!

8. $34 B Market for Healthcare Unbound Technologies $US (billions) ADL/elder $0.35 $0.37 $0.47 $0.59 $0.73 $0.98 $1.2 $1.6 $2.0 $2.4 $3.0 $3.7 Chronic $0.10 $0.13 $0.22 $0.38 $0.65 $1.2 $3.8 $12.1 $23.1 $26.3 $25.7 $26.7 Acute $0.00 $0.00 $0.00 $0.00 $0.01 $0.02 $0.65 $2.0 $3.6 $3.5 $3.0 $3.2 Total $0.45 $0.50 $0.69 $0.97 $1.4 $2.1 $5.7 $15.7 $28.7 $32.3 $31.7 $33.6 (Numbers have been rounded)

9. Hospital at home is defined as a service that provides active treatment by health care professionals, in the patient's home, of a condition that otherwise would require acute hospital in-patient care, always for a limited period.

10. While there is some overlap.... Disease/condition management is mostly about avoiding hospital care (and other high-cost care) HAH is mostly about substituting for hospital care

11. Hospital-at-Home -- Background • Concept emerged in the 1960s • Significant research/literature base • Almost all outside of U.S. • Cochrane review • Hopkins as only U.S. project • Irony • HAH definition varies • NOT based on leveraging technology • But, HAH can be turbocharged with technology

12. Elaborate Proof of a Hypothesis..... The Willie Sutton Theory of Hospital-At-Home Projected 2014 U.S. Annual Hospital Costs = $1 Trillion Projected HU 2015 market of $34 B = 3.4%

13. Outside the U.S. ....

14.  Cost reduction opportunity Hospital safety/error issues Concerns over hospital acquired infections Patient preference for home Benefit structures & incentives Advancing tech allows for safe care in home  Potential burden on caregivers Risk of HAH being viewed as a reincarnation of managed care Physician concerns and inconvenience? HAH Driving/Restraining Forces

15. Call to Action The U.S. needs to join & advance the world dialogue about hospital-at-home

16. What You Think You “Know” B) Providers, especially physicians, are technology curmudgeons The “Truth” Providers are beginning to see the light...

17. Primary Care Physicians Endorse the Medical Home Model • The American College of Physicians position paper on the Advanced Medical Home describes that key elements of a revised reimbursement system should include compensation for: • b) adoption and use of health information technology for quality improvement; c) provision of enhanced communication access such as secure e-mail and telephone consultation; d) remote monitoring of clinical data using technology; and e) pay-for-reporting or pay-for-performance. (p.8)

18. Don’t Count Providers Out Yet • DM companies and health plans were winners of the Medicare Health Support pilot project awards (MMA §721) • But, Medicare has many provider based experiments in the works • Care Management for High Cost Beneficiaries demo • Medicare Health Care Quality Demonstration (MMA §646) • Medicare Care Management Performance Demonstration MMA (§649) • others? • Keep an eye on provider initiatives outside the U.S.

19. What You Think You “Know” C) Healthcare Unbound is about Home Sweet Home The “Truth” The Who had it right...HU is about “going mobile”

20. Ancient Hieroglyphics Provide Insights to Our Past

21. Let’s look at a prehistoric HU hieroglyphic from 1999 ...what’s wrong with this picture?

22. Mobile/Wireless Apps – the Next Wave of Technology Disruption [Forrester, June 2004]

23. The Disconnect • Chronic Disease/Condition Management is migrating • From a clinical based model • Toward a behavior change model How can you optimize behavior change without 24x7x365 connectivity to the patient?

24. Implications • We have underestimated the impact of mobile/wireless technologies for HU • We need to reframe the UI debate • From: Competition among specialized home devices vs. PCs vs. TVs vs. other • To: Integrationand interoperability to achieve 24x7x365 connectivity

25. What You Think You “Know” D) A $34 B HUmarket by 2015? No way! The “Truth” $34 B under sizes the HU market.

26. There Must Be Very Good Times Ahead, Right? xHU Wrong! Near-term, HU is at the peak of inflated expectations.

27. Summing Up the Truths (Long-term) • Hospital-At-Home (HAH) promises to be the biggest disruption of All! + • Providers are beginning to see the light... + • The Who had it right...HU is about “going mobile” = • $34 B under sizes the HU market

28. Long-term....A (Not So) Rhetorical Question • If we can spend $1 Trillion a year in the U.S. to care for people in buildings where • There is a high risk of infection • 98,000 people die annually due to medical errors • The cost of care is higher than anywhere else • People don’t want to be Why would we spend only 3.4% as much ($34 B) to care for people in their homes and communities?

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30. Pre-IPO Companies HealthPost Cardiobeat HomMed EZWeb Sensitron Life Navigator Medical Peace Stress Less DiabetesManager.com CogniMed Caresoft Benchmark Oncology SOS Wireless Click4Care eCare Technologies The Healan Group FitSense Technology Established organizations Samsung Electronics, Seoul Intel Digital Health Group Medtronic Philips Corporate Strategy Group, Amsterdam Siemens Medical Solutions Joslin Diabetes Center Sears Methodist Retirement System National Rural Electric Cooperative Association Disease Management Association of America Blue Cross Blue Shield of Massachusetts PCS Health Systems Varian Medical Systems VRI Washoe Health System S2 Systems CorpHealth Physician IPA Centocor BHT Clients

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