Med Device Vendors Have Big Opportunities in Health IT Software, Services, and Data Management,

If you’re in the medical device manufacturing or hardware sales business your revenue growth (CAGR) is under pressure like never before. You’re being asked to do more with less but you’re probably going to find that hard to accomplish because of one or more of the following challenges:

* Longer product development timelines caused by more FDA and other government regulations
* Increased demand by customers to have your devices deliver user experiences that are more like “consumer” devices such as cell phones and tablets
* Lower margins as a reaction to commodity competition (your sensor hardware business will be commoditized faster and faster over time)
* More complex and longer sales cycles because devices are now being approved for sale not by facilities and clinical executives alone but increasingly by CIOs and IT teams
* Increased cost of risk management and compliance caused by connectivity requirements

Any one of these challenges is difficult to meet but these days you’re probably being asked to meet more than one simultaneously. The solutions are not simple but the good news is that medical device manufacturers have many revenue generation opportunities today that can fund the new strategic imperatives you’ll need to put into place to meet the challenges listed above.

This briefing, presented by Netspective CEO Shahid Shah, describes some of the opportunities and how device vendors can take advantage of them.

Transcript

1. Device Vendor Opportunities in
   Health IT Data Management
   Data is becoming currency and device vendors shouldn’t
   let health IT software firms own or control it
   By Shahid N. Shah, CEO
   

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2. NETSPECTIVE
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   Who is Shahid?
   • 20+ years of software engineering and multi-
   discipline complex IT implementations (Gov.,
   defense, health, finance, insurance)
   • 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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3. NETSPECTIVE
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   Background
   • A deluge of healthcare data is being
   created as we digitize biology, chemistry,
   and physics.
   • Data changes the questions we ask and it
   can actually democratize and improve the
   science of medicine, if we let it.
   • While cures are the only real miracles of
   medicine, big data can help solve
   intractable problems and lead to more
   cures.
   • Healthcare-focused software engineering is
   going to do more harm than good
   (industry-neutral is better).
   Key takeaways
   • Applications come and go, data lives
   forever. He who owns, integrates, and
   uses data wins in the end.
   • Data from devices is too important to
   be left to software vendors, managed
   service providers, and system
   integrators.
   • There’s nothing special about health IT
   data that justifies complex, expensive,
   or special technology.
   • Spend freely on multiple systems and
   integration-friendly solutions.
   What you’ll learn in this briefing
   Data from devices is too important to be left to others
   

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4. NETSPECTIVE
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   Manufacturer’s have a great deal to worry about
   Customer is trapped by
   their EHR vendors
   Device vendors aren’t
   benefiting from industry
   trends
   Customer base has
   shifted from clinical to
   clinical + IT + system
   integration
   Clinical customer goals
   have shifted from basic
   automation to advanced
   process optimizations
   Device manufacturer’s
   access to regulated IT
   and system integration
   skills is limited
   Struggling to find new
   revenue sources as
   hardware is
   commoditized
   Your customer, competitors, and industry are all shifting
   

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5. NETSPECTIVE
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   Healthcare Industry / Market Trends
   PPACA
   “Affordable Care
   Act”
   ACO
   “Accountable
   Care Org”
   PCMH
   “Medical
   Home”
   MU
   “Meaningful Use”
   Health
   Home
   mHealth
   PCPCC
   “Patient Centered
   Care”
   Major market and regulatory trends that are causing customers and competitors to shift
   Device manufacturers must become experts on all of these terms
   

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6. NETSPECTIVE
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   NEJM believes doctors are trapped by EHRs
   It is a widely accepted myth that medicine requires
   complex, highly specialized information-technology (IT)
   systems.
   This myth continues to justify soaring IT costs,
   burdensome physician workloads, and stagnation in
   innovation — while doctors become increasingly bound
   to documentation and communication products that are
   functionally decades behind those they use in their
   “civilian” life.
   Don’t buy the argument that the “enterprise EHR” should maintain / own / manage all data
   New England Journal of Medicine “Escaping the EHR Trap - The Future of Health IT”, June 2012
   

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7. NETSPECTIVE
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   Trend Goal: Patient Engagement
   •Patients can easily make appointments and select the day and time.
   •Waiting times are short.
   •eMail and telephone consultations are offered.
   •Off-hour service is available.
   Superb Access to
   Care
   •Patients have the option of being informed and engaged partners in their care.
   •Practices provide information on treatment plans, preventative and follow-up care reminders,
   access to medical records, assistance with self-care, and counseling.
   Patient Engagement
   in Care
   •These systems support high-quality care, practice-based learning, and quality improvement.
   •Practices maintain patient registries; monitor adherence to treatment; have easy access to lab
   and test results; and receive reminders, decision support, and information on recommended
   treatments.
   Clinical Information
   Systems
   How does your device help customers engage with their patients?
   Source: Health2 Resources 9.30.08
   

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8. NETSPECTIVE
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   Trend Goal: Coordinated Care
   •Specialist care is coordinated, and systems are in place to prevent errors that occur when
   multiple physicians are involved.
   •Follow-up and support is provided.
   Care Coordination
   •Integrated and coordinated team care depends on a free flow of communication among
   physicians, nurses, case managers and other health professionals (including BH specialists).
   •Duplication of tests and procedures is avoided.
   Team Care
   •Patients routinely provide feedback to doctors; practices take advantage of low-cost, internet-
   based patient surveys to learn from patients and inform treatment plans.
   Patient Feedback
   •Patients have accurate, standardized information on physicians to help them choose a practice
   that will meet their needs.
   Publically available
   information
   How does your device help customers coordinate care across their partners?
   

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9. NETSPECTIVE
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   Why care about MU?
   If you’re not talking about MU you’ll find it harder to get in the door
   2011 2013 2015
   “Enable significant and measurable improvements in population
   health through a transformed delivery system.”
   MU Stage 1 MU Stage 2 MU Stage 3
   Direct Impact:
   Device integration
   proposed
   No Impact
   Indirect Impact:
   Start planning for
   MU
   

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10. NETSPECTIVE
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    There’s money in MU
    Devices can and should be “MU capable”
    

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11. NETSPECTIVE
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    Fit into CIO’s strategic framework
    In the future your devices won’t be sold into customers without CIO approval
    Source: The Advisory Board
    

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12. NETSPECTIVE
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    Implications of health IT trends
    PPACA ACO
    MU PCMH
    Health
    Home
    mHealth
    DATA
    Evidence Based Medicine
    Comparative Effectiveness
    Software
    Regulated IT and Systems
    Integration Services
    

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13. NETSPECTIVE
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    Don’t give up data to others without a fight
    Software vendors, systems integrators, and others don’t have your best interest in mind
    Cloud
    Services
    Management
    Dashboards
    Data Transformation (ESB, HL7)
    Device Gateway
    (DDS, XMPP
    , ESB)
    Enterprise Data
    RCM, Financials,
    EHRs
    Device Inventory
    Cross Device
    App Workflows
    Alarm
    Notifications
    Patient Context
    Monitoring
    Device
    Teaming
    Device
    Management
    Report
    Generation
    HIT
    Integration
    Remote
    Surveillance
    Device
    Data
    SSL VPN
    Patient
    Self-Management
    Platforms
    Device Utilization
    Device reimbursement
    Device profitability
    

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14. NETSPECTIVE
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    New revenue centers in software and services
    0%
    20%
    40%
    60%
    80%
    100%
    Hardware Software Services
    Up
    Down
    Flat
    Ranking
    YoY
    Build the right roadmap so that you don’t leave new revenue on the table
    2 year ranking comparison of Top 30 HIT firms by offering type. Pure play firms are failing behind
    Source - The 2012 Healthcare Informatics 100 ranks the leading 100 vendors by revenues derived from healthcare IT products and services earned in the U.S.
    Focus on
    Services and
    Solutions is
    the way to go
    % of all
    firms by
    offering
    

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15. Market your devices as data generators that
    can help change medical science
    Start small but think big
    

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16. NETSPECTIVE
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    Digitize biology
    Digitize
    chemistry
    Digitize physics
    Predict
    fundamental
    behaviors
    Digitize
    mathematics
    Digitize
    literature
    Digitize social
    behavior
    Predict human
    behavior
    We’re digitizing biology
    Last and past decades This and future decades
    Gigabytes and petabytes Petabytes and exabytes
    

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17. NETSPECTIVE
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    We’re just getting started
    Proteomics
    Emerging
    •Must be continuously collected
    •Difficult today, easier tomorrow
    •Super-personalized
    •Prospective
    •Predictive
    Genomics
    Since 2000s,
    started at $100k
    per patient, <$1k
    soon
    •Can be collected infrequently
    •Personalized
    •Prospective
    •Potentially predictive
    •Digital
    •Family history is easy
    Phenotypics
    Since 1980s,
    pennies per
    patient
    •Must be continuously collected
    •Mostly Retrospective
    •Useful for population health
    •Part digital, mostly analog
    •Family History is hard
    Economics
    Since 1970,
    pennies per
    patient
    •Business focused data
    •Retrospective
    •Built on fee for service models
    •Inward looking and not focused
    on clinical benefits
    Will you be ready for the coming data deluge and can you differentiate your device?
    Biosensors
    Social Interactions
    

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18. NETSPECTIVE
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    Data changes the questions we ask
    Simple visual facts Complex visual facts Complex computable
    facts
    

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19. NETSPECTIVE
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    Implications for scientific discovery
    The old way
    Identify problem
    Ask questions
    Collect data
    Answer questions
    The new way
    Identify data
    Generate questions
    Mine data
    Answer questions
    

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20. NETSPECTIVE
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    We’re in the integration age
    Source: Geoffrey Raines, MITRE
    We’re not in an
    app-driven
    future but an
    integration-
    driven future.
    He who
    integrates the
    best, wins.
    

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21. Educate your customers about the importance of
    medical device data
    Don’t become a commodity sensor company
    

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22. NETSPECTIVE
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    Obvious sources of data
    Clinical systems
    Consumer and
    patient health
    systems
    Core transaction
    systems
    Decision
    support systems
    (DSS and CPOE)
    Electronic
    medical record
    (EMR)
    Managed care
    systems
    Medical
    management
    systems
    Materials
    management
    systems
    Clinical data
    repository
    Patient
    relationship
    management
    Imaging
    Integrated
    medical devices
    Clinical trials
    systems
    Telemedicine
    systems
    Workflow
    technologies
    Work force
    enabling
    technologies
    Your device data needs to fit in and integrate across a wide variety of existing customer data
    

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23. NETSPECTIVE
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    Architect for next generation sources of data
    Clinical trials data
    (failed or successful)
    Secure Social Patient
    Relationship
    Management (PRM)
    Patient
    Communications,
    SMS, IM, E-mail,
    Voice, and Telehealth
    Patient Education,
    Calculators, Widgets,
    Content
    Management
    Blue Button, HL7,
    X.12, HIEs, EHR, and
    HealthVault
    Integration
    E-commerce, Ads,
    Subscriptions, and
    Activity-based Billing
    Accountable Care,
    Patient Care
    Continuity and
    Coordination
    Patient Family and
    Community
    Engagement
    Patient Consent,
    Permissions, and
    Disclosure
    Management
    Your device data needs to fit in and integrate across a wide variety of new sources of data
    

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24. NETSPECTIVE
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    Your device is a great source of data
    Patient Health
    Professional
    Labs &
    Diagnostics
    Medical Devices Biomarkers /
    Genetics
    Source Self reported by
    patient
    Observations by
    HCP
    Specimens Real-time from
    patient
    Specimens
    Errors High Medium Low Low Low
    Time Slow Slow Medium Fast Slow
    Reliability Low Medium High High High
    Discrete size Kilobytes Kilobytes Kilobytes Megabytes Gigabytes
    Streaming size Gigabytes Gigabytes
    Availability Uncommon Common Somewhat
    Common
    Uncommon Uncommon
    Understand how your data compares to other data sources
    

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25. NETSPECTIVE
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    Application focus is biggest mistake
    The customer needs are changing from simple automation to complex process improvements
    Application-focused IT instead of Data-focused IT is causing business problems.
    Healthcare Provider Systems
    Clinical
    Apps
    Patient
    Apps
    Billing
    Apps
    Lab
    Apps
    Other
    Apps
    Partner Systems
    Silos of information exist across
    groups (duplication, little sharing)
    Poor data integration across
    application bases
    

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26. NETSPECTIVE
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    NCI
    App
    NEI
    App NHLBI
    App
    Healthcare Provider Systems
    Clinical
    Apps
    Patient
    Apps
    Billing
    Apps Lab
    Apps Other
    Apps
    Master Data Management, Entity Resolution, and Data Integration
    Partner Systems
    Improved integration by services
    that can communicate between applications
    The Strategy: Modernize Integration
    Be sure you fit into your customer’s data architecture and governance needs
    Need to get existing applications to share data through modern integration
    techniques
    

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27. NETSPECTIVE
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    Data-centric device architecture
    Extensibility and adaptability will be key in a data-centric world
    Device Components 3rd Party Plugins
    App
    #1
    App
    #2
    Security and Management Layer
    Device OS
    (QNX, Linux, Windows)
    Sensors Storage Display Plugins
    Web Server, IM Client
    Connectivity Layer (DDS, HTTP, XMPP)
    • Presence
    • Messaging
    • Registration
    • JDBC, Query
    Plugin Container
    Event Architecture
    Location
    Aware
    1 2
    3
    4
    5
    6
    7
    

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28. NETSPECTIVE
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    Ensure your devices fit in a modern IT architecture
    Don’t give up your device data to others without a fight
    Cloud
    Services
    Management
    Dashboards
    Data Transformation (ESB, HL7)
    Device Gateway
    (DDS, XMPP
    , ESB)
    Enterprise Data
    RCM, Financials,
    EHRs
    Inventory
    Cross Device
    App Workflows
    Alarm
    Notifications
    Patient Context
    Monitoring
    Device
    Teaming
    Device
    Management
    Report
    Generation
    HIT
    Integration
    Remote
    Surveillance
    Device
    Data
    SSL VPN
    Patient
    Self-Management
    Platforms
    Device Utilization
    Device reimbursement
    Device profitability
    

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29. 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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