Telehealth SustainAbility: Where Did the Money Go?

1. Joseph R. Biggs, Ph.D., HSPP Jeffrey S. Harper, Ph.D., CFE Telehealth SustainAbility: Where Did the Money Go?

2. The Lugar Center for Rural Health • Division of Union Hospital • 380 bed not-for-profit medical center • Serves over 200,000 patients per year • Established in 1992 as Midwest Center • Mission • Advancing rural health through education, innovation, and collaboration.

3. The Lugar Center for Rural Health • Began utilizing technology to advance rural health in 1999 • Telehealth services have expanded through grant funding • US Department of Health and Human Services • Health Resources and Services Administration (HRSA) • Office for the Advancement of Telehealth (OAT)

4. Telehealth Network Grant Program (TNGP) • Lugar Center was 2010 grant recipient • HRSA – H2ARH20178 • Monies used to: • Support infrastructure upgrades • Expand telehealth services into neighboring rural communities • formalize and subsidize the Wabash Valley Rural Telehealth Network (WVRTN)

5. Wabash Valley Rural Telehealth Network • Partnership of multiple health care organizations and specialty practices • Participate in Live Video Interactive (LVI) telehealth • Purpose: to alleviate the barriers to accessing equitable health care services • Annual telehealth consult volume has grown • From 300 to over 5,000

6. Telehealthspecialties include: • Behavioral health • Cardiology • Pulmonology • Nephrology • Child psychiatry • Neurology • Diabetes education • Field STEMI • Occupational health • Pediatric consults for burns, microplasty, and congenital anomalies.

7. A Methodology for Sustainability • Phase I – Needs Assessment • Define the objectives and scope of the assessment • Identify partners/clients, products, and services to include in the assessment • Determine stakeholder needs/requirements • Assess product/service attributes and viability • Measure current resource allocation to current product/service delivery

8. A Methodology for Sustainability • Phase I – Needs Assessment (Continued) • Identify present revenue sources and potential future revenue sources • Data analysis • Develop findings for strategy formulation • Presentation to management/staff for agreement/adjustment

9. A Methodology for Sustainability • Phase II – Strategy Formulation • Treat the findings from Phase I with various analytical tools (competitive forces, value chain and virtual value chain, BCG matrices, decision chain, gap analysis, and others as applicable) • Define strategic alternatives

10. A Methodology for Sustainability • Phase II – Strategy Formulation (Continued) • Present to management for strategic choice • Develop goals and objectives to support strategic choice • Presentation to management/staff for agreement/adjustment

11. A Methodology for Sustainability • Phase III – Action Plan Development • Develop product/service design and implementation schedule • Develop revenue projection • Develop responsibilities and milestones matrix • Develop quality assurance/client satisfaction metrics

12. A Methodology for Sustainability • Phase IV – Obtain Stakeholder Buy-In • Final report issued to management, presentations by the consultant as necessary • Management review and accountability plan

13. A Methodology for Sustainability • Preliminary Investigation • Scope • All Telehealth • WVRTN • Review of Best Practices • Emerging industry • Home health care • Strategic Analyses

14. A Methodology for Sustainability • Industry Analysis • Market size • Scope of competitive rivalry • Availability of economies of scale • Whether industry profitability is above or below par

15. A Methodology for Sustainability • Competitive Analysis • Rivalry among competing organizations • The potential entry of new competitors • Competitive pressures from substitute products • Bargaining Power of Suppliers • Bargaining Power of Customers

16. A Methodology for Sustainability • Key Findings – Competitive Analysis • The sustainability plan will be most effective by ensuring that future partners/affiliates are committed to the network and will incur significant switching costs if they choose to move to a competitor; • A good strategy will include a plan for continued research and development to maintain competitive advantage;

17. A Methodology for Sustainability • Key Findings – Competitive Analysis • It is relatively unlikely that telehealth will see a large influx of new players in the short term; • Potential affiliates will probably not find substitute products for online telehealth readily available; • WVRTN should be attentive to its membership as the sustainability model is developed and introduced.

18. A Methodology for Sustainability • Analysis of Key Driving Forces • Changes in the industry growth rate • Product innovation and technology change • Diffusion of technical know-how • Regulatory influences and government policy changes

19. Key Findings from Preliminary Investigation • The telehealth market is new and unproven. Therefore, a successful strategy will be based upon thoughtful projections and “best-guesses” that will require a degree of flexibility and rethinking as it is carried out. • The strategy must include an adequate revenue stream from telehealth “customers” that will fund operations and innovation. • The Telehealth Department has the present capacity to deliver robust services and applications to new customers.

20. Key Findings from Preliminary Investigation (Continued) • The organization’s reputation, recognition, and potential referrals to new customers from its present partners indicate high potential for market expansion. • Continued innovation will be a key in future market penetration. • The strategic plan should capitalize on the organization’s reputation, present products, and future innovations – each of which is a core competency and competitive advantage. • The strategy will be dependent upon a market-driven organizational culture (see next slide).

21. Key Findings from Preliminary Investigation (Continued) • Amarket-focused strategy will have to be adopted. The strategy will need to include: • Development of an appropriate profile for future affiliates; • Establishment of a market-based pricing modelthat is justifiable to CFOs of affiliates; • Reasonable acquisition targets and methods; and • Funding metrics that will show progress to sustainability.

22. Key Findings from Preliminary Investigation (Continued) • A specific subset of industry opportunities will need to be agreed upon in order to develop precisely targeted activities for exploiting new and sustainable revenues.

23. Sustainability Retreat • All Center administration and staff, plus key players from the hospital; • One-day agenda focusing on a market-based approach to growth; and • Intention: to build a consensus regarding future direction.

24. Strategy Formulation Retreat • Session 1: INTRODUCTION • Review of Preliminary Findings • Working Sustainability Strategy Statement Presentation • “Next steps” process discussion • How will our new strategy work with Union Hospital? • How will our new strategy work with our partners?

25. Strategy Formulation Retreat • Session 2: Market Identification • What kinds of organizations should we pursue as partners (customers)? • Where will our partners be located? • How will we find our prospective partners? • How important are eCommerce and the Internet in our new sales model?

26. Strategy Formulation Retreat • Session 3: Our Products and Services • What products and services do we presently provide that have great value to the market? • What products and services do we presently provide that have limited or little value to the market? • What new products and services can we provide in the near term that will have great value to the market?

27. Strategy Formulation Retreat • Session 4: Sales and Development Responsibilities • Who “sells” our products and services now? • Who creates our products and services now? • Who will sell our products and services to a larger market? • Who will create our products and services for a larger market?

28. Strategy Formulation Retreat • Session 5: Product and Service Pricing • What is the price of our products and services? • What is the cost of our products and services? • How should future pricing be structured? • What prices should we charge? • What is our justification for our prices?

29. Strategy Formulation Retreat • Session 6: Assimilation • Where do research, innovation, and creativity fit in? • What is our “Elevator Speech?” • How will we know when we are successful?

30. Lessons Learned Through the Process • Culture shift is painful • It is important to let everyone have input • Differing perspectives, ideas, and attitudes must be considered • An outside facilitator is needed • Consensus ≠ Compromise