Healthcare Unbound: How Close Are We to a Tipping Point? Opening Keynote Presentation

1. Healthcare Unbound:How Close Are We to a Tipping Point?Opening Keynote Presentation July 2007 San Francisco, CA Vince Kuraitis JD, MBA Better Health Technologies, LLC http://e-CareManagement.com blog (208) 395-1197

2. What’s the right metaphor for HU?

3. Overview • Network Effects and HU Markets • How Close Are We To A Tipping Point? • No Sightings • Remote Patient Monitoring (RPM) • Medicare Disease Management • Personal Health Records (PHRs) • The Biggest (Eventual) Tipping Points of All • Mobile telehealth • Health 2.0 • Hospital at Home • Lessons Across HU Market Segments

4. I. Network Effects and HU Markets

5. Network Effects(Tipping Point) Source: Shapiro, C. Varian, H. Network Effects 1998

6. $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)

7. Key Questions • How close are we to a tipping point in various segments of the HU market? • What’s the closest thing to a “sighting” of a tipping occurring? • Why is this important? Will HU • Remain an interesting, sexy topic for the 6 o’clock news to run a feature, or • Become mainstream to health and medical care?

8. II. How Close Are We To A Tipping Point? • No Sightings • Remote Patient Monitoring (RPM) • Medicare Disease Management • Personal Health Records (PHRs) • The Biggest (Eventual) Tipping Points of All • Mobile telehealth • Health 2.0 • Hospital at Home

9. II A. No Sightings EHRs Telemedicine Niche apps (few network effect markets)

10. II B. Remote Patient Monitoring (RPM) Bottom line: 2008 could be a breakthrough year for RPM

11. 2008 could be a breakthrough year for RPM • Continua begins to address major challenges • Interoperability of devices • Pricing (indirectly) • But other challenges remain • IT/integration • Reimbursement/business model • Licensure/regulatory issues

12. II C. Medicare Disease Management Bottom line: One year ago a tipping point (Medicare Health Support) was on the horizon Today, it’s back to square one Market shift toward integration of care providers

13. Medicare DM: Virtually No Evidence of Success • Medicare Health Support appeared to be the favorite son demo to expand DM into Medicare • MHS has attracted worldwide attention • Legislation requires roll out if successful • Elements of MHS model • Focus on highest cost/risk population (frail elderly) • Disease management -- carve out to private companies & health plans ( vs. CCM) • Guaranteed 5% savings business model • Short term ROI • Randomized control trial • Results to-date: virtually no evidence of success. See http://e-caremanagement.com/first-official-report-on-medicare-health-support-dm-pilot-finds-virtually-no-evidence-of-success/

14. The Cats are Herding:Medical Home Model Gaining Momentum

15. The Medical Home Incorporates HU Tech & Apps • Proposed payment framework for the Medical Home model includes $$ for: • coordination of care • health information technology • secure e-mail and telephone consultation; • remote monitoring of clinical data using technology. • Medicare Medical Home Demonstration

16. II D. Personal Health Records (PHRs) Bottom line: Despite significant activity, the current PHR market is fragmented with no tipping point in sight BUT.....Google Health is a wildcard!

17. PHR Background • 2 models of PHRs • Stand alone • Tethered: typically to a health plan, provider, employer • Each has challenges • The “populating the PHR with data” problem • 200 PHRs on the market • Generations of PHRs • 1st generation: PHR as “APPLICATION” -- an online repository of personal health information (PHI) • Next generation – PHR as PLATFORM

18. Source: Markle FoundatonA Common Framework for Networked Personal Health Information,2006. See also: RWJF Project HealthDesign A New Vision for Personal Health Records, May 2007

19. Google Health– A Next Generation PHR(detective work and tea leaf reading) • The Current Market Structure for Personal Health Information (PHI). Your PHI is • Scattered everywhere • Not in standardized formats suitable for a global information economy • Elaboration: http://e-caremanagement.com/connecting-the-dotsgoogle-health-promises-to-create-and-dominate-next-generation-phrs/

20. GH’s Anticipated Technology Model • Patient centric • A personal health URL • Automated data mechanisms to gather and store PHI • Interoperable technical standards: XML and the Continuity of Care Record (CCR) standard • A user interface • Appropriate security and confidentiality measures • Value added functionality (over time)

22. II E. The Biggest (Eventual) Tipping Points of All Mobile Telehealth 60+ companies Possible tipping point sighting: LifeComm (2008) Health 2.0 Hospital at Home

23. Hospital at Home Dates Back to the 1960s

25. EHRs Telemedicine Niche apps Remote Patient Monitoring Disease Management Personal Health Records Mobile telehealth Health 2.0 Etc Current HU Tech & Apps Are A Collective Platform to Support HAH Hospital At Home

26. What would happen at your company if someone said: “We adjusted last year’s market numbers and concluded we were off by $140 Billion.”

27. 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% 1.14 3.0%

28. III. Lessons Across HU Segments

29. We are interdependent • Importance of HIT • Interoperability • Transportability of PHI • Integration of care providers • Are PHRs are the best candidate for a common technology platform? • The issue isn’t whether HU succeeds, it’s when • Actions • Support the Continuity of Care Record standard • Join Continua

30. What’s the right metaphor for HU?

31. END

32. Better Health Technologies, LLC • Technology and health care delivery are shifting:  • From: Acute and episodic care delivered in hospitals and doctors’ offices • To: Chronic disease and condition management delivered in homes, workplaces, and communities • BHT provides consulting, business development, and speaking services to assist companies in:  1) Understanding the shift 2) Positioning – what’s the right strategy, tactics, and business model? 3) Integrating your offering into the value chain – what are the right partnerships?

33. Pre-IPO Companies HealthPost Cardiobeat EZWeb Sensitron Life Navigator Medical Peace Stress Less DiabetesManager.com CogniMed Caresoft Benchmark Oncology SOS Wireless Click4Care eCare Technologies The Healan Group Fitsense Elite Care Technologies Established organizations Intel Digital Health Group Samsung Electronics, South Korea -- Global Research Group -- Samsung Advanced Institute of Technology -- Digital Solution Center Medtronic -- Neurological Disease Management -- Cardiac Rhythm Patient Management Amedisys Siemens Medical Solutions Philips Electronics Joslin Diabetes Center GSK Disease Management Association of America PCS Health Systems Varian Medical Systems VRI Washoe Health System S2 Systems CorpHealth Physician IPA Centocor BHT Clients