Getting Beyond the Hype of “Disrupting Healthcare” and Focusing on Actionable Innovation

This was a Keynote Address I gave at Healthcare Unbound 2013 and focused on what’s needed for healthcare technology innovation in a value- and outcomes-driven model.

There’s a ton of hype surrounding disruptive technology innovation in healthcare but nothing is truly making a dent in the healthcare sector the same way as disruptions have occurred in other major segments of our economy. The slow but sure march from Fee For Service Based Care to Outcomes Driven Care has certainly started but it’s neither fast enough nor substantial enough to bend the cost curve or improve value to patients in the short term.

This presentation discusses how we can get beyond the hype by focusing on actionable innovation. Specifically, I answered the following questions:

* What does innovation in healthcare mean?
* Where are the major areas in healthcare where innovation is required?

Important takeaways this session included:
* Understand PBU: Payer vs. Benefiter vs. User
* Understand why healthcare businesses buy stuff so you can build the right thing

Transcript

1. Getting Beyond the Hype of
   “Disrupting Healthcare” and
   Focusing on Actionable Innovation
   10th Annual Healthcare Unbound
   Conference & Exhibition
   Shahid N. Shah, CEO
   

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   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”
   

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   What’s this talk about?
   Questions answered
   • Is disruptive innovation in
   healthcare possible?
   • What does innovation in
   healthcare mean?
   • Where are the major areas
   in healthcare where
   innovation is required?
   Key takeaways
   • Go narrow, specialize, dive
   deep
   • Understand PBU: Payer vs.
   Benefiter vs. User
   • Understand why healthcare
   businesses buy stuff so you
   can build the right thing
   

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4. NETSPECTIVE
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   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.
   

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    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.
    

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

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

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

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    Top killers today
    Heart disease Cancer
    Chronic lower
    respiratory
    diseases
    Top killers in 1900
    Pneumonia
    and influenza
    TB
    Diarrhea and
    enteritis
    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
    

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    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
    

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    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
    

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    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.
    

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    What kinds of users are you targeting?
    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
    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
    

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    Defining your PBU participants 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
    

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    How will your customer pay for your innovation?
    Direct Payment
    • Your best option
    • Very few truly disruptive
    technologies can be
    directly paid for by
    providers within the USA
    • Limited adoption of
    ‘traditional’ pay for service
    reimbursement for next
    generation technology
    Direct Reimbursement
    • Second best option
    • Improvements in
    technology are outpacing
    payer adoption
    • Reimbursement will come
    but its time consuming and
    difficult
    Indirect Reimbursement
    • Emerging option
    • Payer requirements for
    improved quality and
    efficiency are creating
    indirect incentives to adopt
    innovative solutions
    • Solutions targeting new
    value-based
    reimbursement incentives
    are highly useful to medical
    providers
    If you haven’t figured it out for them, customers will not figure it out for themselves
    

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    Where does your innovation fit?
    Therapies
    Therapeutic
    Tools
    Diagnostic
    Tools
    Patient
    Administration
    Patient
    Education
    Target the right market so you understand the regulatory impacts
    Most Regulation
    Least Regulation
    Be aware of regulations, don’t fear them, use them as
    a competitive advantage
    

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    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
    

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    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
    

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    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
    

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    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
    

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    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
    

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    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
    

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    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.
    

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    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
    

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    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
    

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    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
    

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    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”
    

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33. 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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