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
2. NETSPECTIVE www.netspective.com 2 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”
3. NETSPECTIVE www.netspective.com 3 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
4. NETSPECTIVE www.netspective.com 4 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
5. NETSPECTIVE www.netspective.com 5 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
6. NETSPECTIVE www.netspective.com 6 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
7. NETSPECTIVE www.netspective.com 7 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
8. NETSPECTIVE www.netspective.com 8 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?
9. NETSPECTIVE www.netspective.com 9 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
10. NETSPECTIVE www.netspective.com 10 There’s money in MU Devices can and should be “MU capable”
11. NETSPECTIVE www.netspective.com 11 Fit into CIO’s strategic framework In the future your devices won’t be sold into customers without CIO approval Source: The Advisory Board
12. NETSPECTIVE www.netspective.com 12 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
13. NETSPECTIVE www.netspective.com 13 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
14. NETSPECTIVE www.netspective.com 14 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
15. Market your devices as data generators that can help change medical science Start small but think big
16. NETSPECTIVE www.netspective.com 16 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
17. NETSPECTIVE www.netspective.com 17 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
18. NETSPECTIVE www.netspective.com 18 Data changes the questions we ask Simple visual facts Complex visual facts Complex computable facts
19. NETSPECTIVE www.netspective.com 19 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
20. NETSPECTIVE www.netspective.com 20 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.
21. Educate your customers about the importance of medical device data Don’t become a commodity sensor company
22. NETSPECTIVE www.netspective.com 22 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
23. NETSPECTIVE www.netspective.com 23 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
24. NETSPECTIVE www.netspective.com 24 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
25. NETSPECTIVE www.netspective.com 25 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
26. NETSPECTIVE www.netspective.com 26 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
27. NETSPECTIVE www.netspective.com 27 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
28. NETSPECTIVE www.netspective.com 28 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
29. Thank You Visit http://www.netspective.com http://www.healthcareguy.com E-mail shahid.shah@netspective.com Follow @ShahidNShah Call 202-713-5409