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The shift from Fee for Service to Outcomes-Driven care means huge opportunities for systems integrators and service providers who know how to deal with data

Shahid N. Shah
May 06, 2014
2.3k

The shift from Fee for Service to Outcomes-Driven care means huge opportunities for systems integrators and service providers who know how to deal with data

I presented this opinionated look at why the Medicare Shared Savings plans, ACOs and other outcomes-driven payment models are being promoted over fee for service (FFS) models and what that means for service providers and integrators. Evidence driven healthcare is required to help reduce costs and data drives evidence – the problem is that institutions are having trouble pulling together all the data they need. Current health IT systems integrate poorly and anyone that can improve that data integration to help with pricing transparency, cost transparency, care coordination, and population health management will have work for years.

Shahid N. Shah

May 06, 2014
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  1. Shift from fee for service to outcomes-
    driven care will drive opportunities for
    SIs and solution providers
    Smart VAR Healthcare Summit
    May 2014
    Shahid N. Shah, CEO

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  2. NETSPECTIVE
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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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  3. NETSPECTIVE
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    What’s this talk about?
    Questions answered
    • Is disruptive innovation in
    healthcare possible?
    • What does innovation in
    healthcare mean and how do
    you help customers make it
    happen?
    • Where are the major areas in
    healthcare where innovation
    is required and can you grow
    your business by helping your
    customers achieve them?
    Key takeaways
    • Go narrow, specialize, dive
    deep
    • Understand PBU: Payer vs.
    Benefiter vs. User
    • Understand why healthcare
    businesses buy stuff so you
    can serve them in ways
    they find you indispensable

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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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  5. www.netspective.com 5
    No, your innovation will not
    disrupt healthcare.
    I promise.
    The good news
    is that doesn’t
    have to.

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  6. www.netspective.com 6
    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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  7. www.netspective.com 7
    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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  8. www.netspective.com 8
    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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  9. www.netspective.com 9
    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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  10. NETSPECTIVE
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    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.
    What I mean by “actionable innovation”
    You can help your customers achieve practical, relevant, actionable solutions

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  11. NETSPECTIVE
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    Life expectancy is increasing…
    …but the rate of growth is slowing

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  12. NETSPECTIVE
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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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  13. NETSPECTIVE
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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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  14. NETSPECTIVE
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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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  15. NETSPECTIVE
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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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  16. NETSPECTIVE
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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 – how will you be able
    to help them achieve those goals?
    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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  17. NETSPECTIVE
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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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  18. NETSPECTIVE
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    What kinds of users are your customers targeting?
    Help your customers 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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  19. NETSPECTIVE
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    Shift from Fees for Service (FFS) to Value (FFV)
    The Shift
    The clinical model is shifting
    away from treatment of
    chronic conditions and
    focusing more on prevention,
    wellness, obesity intervention,
    behavior and lifestyle
    modification.
    Implications
    Clinical operations are shifting to hospital and
    physician ‘centered’ services that will rely heavily
    on health information technologies to monitor,
    coordinate, and manage care.
    • Successful Transition in Care resulting in
    Reduced Hospital Readmission Rates
    • Proactive population management
    • Patient engagement and collaboration
    • Disease prevention through wellness and
    obesity management
    • Chronic disease management
    • Care coordination and collaboration
    • Metrics and analytics

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  20. NETSPECTIVE
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    How Digital Health helps in shift
    Successful Transitions of
    Care
    Reduced Hospital
    Readmissions
    Innovative Practice
    Models like Patient
    Centered Medical
    Homes
    Prevention, Wellness,
    Obesity intervention
    Behavior adjustments
    and modification
    Physician Marketing
    Personalized
    Concierge-Like
    Medicine
    Total Population
    Management

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  21. NETSPECTIVE
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    How to best identify your customers
    FFS vs. FFV?
    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!
    Help them stay away from market segmentation, focus on identifying PBU particpants
    Identifying your
    customers will depend
    on helping your
    customers identify theirs

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  22. NETSPECTIVE
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    How will your customers get paid for 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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  23. NETSPECTIVE
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    Your customers’ innovation fit determines your opportunities
    Therapies
    Therapeutic
    Tools
    Diagnostic
    Tools
    Patient
    Administration
    Patient
    Education
    Most Regulation
    Least Regulation
    Be aware of regulations, don’t fear them, use them as
    a competitive advantage

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  24. NETSPECTIVE
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    Problems your customers looking to solve
    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 customers need to be done, not what you want to build

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  25. NETSPECTIVE
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    What you need to know these days
    Consumer Health,
    mHealth, eHealth
    Health IT Product
    Development
    Wireless & Mobile
    Strategies
    Collaboration,
    Social Technologies
    Cloud Computing
    Strategies
    MedTech Product
    Development
    Content &
    Document
    Management
    (CMS/DM)
    Enterprise
    Architecture, SOA
    Regulated Product
    Management
    Trust Models &
    Regulated Privacy,
    Security Planning
    Technology Due
    Diligence

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  26. NETSPECTIVE
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    Problems you can solve for your customers
    Patient Discovery
    •Website
    •Pre-Patient
    Provider Search
    •Patient Connect
    •Patient
    Scheduling
    •Reminder call,
    scheduling,
    Ensuring Patient
    show up
    •Patient Intake
    Practice
    Management
    •Patient
    Scheduling
    •Charge Capture
    •Practice
    Management /
    Billing Tools
    •Revenue
    Analytics
    •Claims Scrubing
    •Billing Services
    •Pricing
    Management
    (Aggregated
    Billing Data
    analytics)
    •Reviews /
    Feedback
    Infrastructure
    •DaaS
    •Network
    •Office
    Automation
    Clinical
    Management
    •MU2 Compliant
    EHR
    •eRX
    •Voice
    Recognition
    •Clinical Language
    Understanding
    Integration
    •Patient Connect
    integration to PM
    •HIE
    •Labs
    •Device
    Connectivity
    •Image storage /
    EMR Access
    •Clearing Houses
    •Gateways
    Consulting
    Services
    •ICD
    •HIPAA
    •Practice
    Consulting
    •Revenue
    Planning
    •Legal and
    Compliance
    •Clinical Workflow
    Optimization
    •Billing to Clearing
    House
    Integration
    •Records
    Management /
    Migration
    Focus on jobs that customers need to be done, not what you want to build

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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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  28. NETSPECTIVE
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    Can you repurpose or enhance health data?
    Proteomics
    Genomics
    Biochemical
    Behavioral
    Phenotypics
    Economics
    Can you help customers use 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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  31. NETSPECTIVE
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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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  32. NETSPECTIVE
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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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  33. NETSPECTIVE
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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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  34. NETSPECTIVE
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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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  35. NETSPECTIVE
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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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  36. Thank You
    Visit
    http://www.netspective.com
    http://www.healthcareguy.com
    E-mail [email protected]
    Follow @ShahidNShah
    Call 202-713-5409

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