What’s next for healthcare information technology innovation? Vanderbilt Healthcare Conference 2012 Shahid N. Shah, CEO

NETSPECTIVE www.netspective.com 2 Who is Shahid? • 20+ years of software engineering and multi- site healthcare system deployment experience • 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”

NETSPECTIVE www.netspective.com 3 What’s this talk about? Questions answered • What does innovation in healthcare mean? • Where are the major areas in healthcare where innovation is required? Key takeaways • Understand PBU: Payer vs. Benefiter vs. User • Understand why healthcare businesses buy stuff so you can build the right thing

NETSPECTIVE www.netspective.com 4 What I mean by “innovation” For this presentation, we’ll assume that “innovation” means either: a) 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 b) You have made the job of self-diagnosing, self-treating, or preventing diseases and improving overall wellness of patients through the use of IT Innovation in healthcare is especially hard to define given the wide variety of constituencies

NETSPECTIVE www.netspective.com 5 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. 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

NETSPECTIVE www.netspective.com 6 PBU: Payer vs. Benefiter vs. User Payer Benefiter 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.

NETSPECTIVE www.netspective.com 7 What problem will you be solving? Improve medical science? Improve access to care? Reduce costs? Improve therapies? Improve diagnostics? Improve drug design? Improve drug delivery? Create better payment models? Focus on jobs that need to be done, not what you want to build

NETSPECTIVE www.netspective.com 8 How to identify the best opportunities Circumstance • The specific problems a customer cares about • The way they assess solutions Context • Find a way to be with the customer when they encounter a problem and • Watch how they try to solve it Constraints • Develop an innovative means around a barrier constraining consumption Compensating behaviors • Determining whether a job is important enough to consider targeting • One clear sign is a customer spending money trying to solve a problem Criteria • Customers look at jobs through functional, emotional, and social lenses From “Jobs to be Done” to the “Five Cs of Opportunity Identification” Source: http://blogs.hbr.org/anthony/2012/10/the_five_cs_of_opportunity_identi.html

NETSPECTIVE www.netspective.com 9 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

NETSPECTIVE www.netspective.com 10 Can you repurpose or enhance health data? Proteomics Genomics Biochemical Behavioral Phenotypics Economics Try to use existing data to create new diagnostics or therapeutic solutions IOT sensors Administrative

NETSPECTIVE www.netspective.com 11 Some stuff not to focus on • Don’t go for simple incremental innovation if you can be bold and disruptive • 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

NETSPECTIVE www.netspective.com 12 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

NETSPECTIVE www.netspective.com 13 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.

NETSPECTIVE www.netspective.com 14 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

NETSPECTIVE www.netspective.com 15 Why healthcare businesses buy stuff Increase revenue (topline) Maintain capabilities Reduce costs (bottomline) Attract new patients Increase staff productivity Find your reason Healthcare businesses have complex buying processes – figure out why and what they buy

NETSPECTIVE www.netspective.com 16 The Customer Relationship Customer Gives You Get • Money • Time • Energy • Commitment • Referrals • Past experience • Expectations • Knowledge You Give Customer Gets • Product • Price • Value • Convenience • Selection • Service • Warranty • Brand If you can’t figure out why they buy, see if any of the things below make sense

NETSPECTIVE www.netspective.com 17 Defining your customer is really hard Target health sector? Number of employees? Annual sales volume? Geography? Number of hospital beds? Number of patients? Type of patients? The list goes on and on…be specific! Don’t focus on market segmentation, but do try to figure out who your customer is

NETSPECTIVE www.netspective.com 18 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 Visit http://www.netspective.com http://www.healthcareguy.com E-mail [email protected] Follow @ShahidNShah Call 202-713-5409