digital transformation—spotlight on the hospital: jonathan melnick, lux research (digital health...

Digital Transformation—Spotlight on the Hospital

Jon Melnick, Ph.D.Senior AnalystJanuary 7, 2017

About Lux Research

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3

Agenda

Digital disruption comes to an industry near youDigital pushes traditional care past existing practicesRestructuring the digital hospital

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Electronics giants are betting big on Digital Health and Wellness“Google Ventures Shifts Focus to Health Care” WSJ Dec 2014

The venture group plans to continue investing in the area, looking to capitalize on an explosion of health data and new ways to analyze it.

- Bill Maris, head of Google Ventures “Google Bets on Health: 'The Most You Can Lose Is All Your Money'” Bloomberg Feb 2016

• Health care became GV’s largest investment category in 2014, topping consumer, data and artificial intelligence, enterprise and robotics. In 2013, only 6 percent of GV’s investments were in health care. That jumped to 34 percent in 2014 and 31 percent in 2015.

Apple Goes Big on Digital Health, Acquires Gliimpse [personal health data platform that enables any American to collect, personalize, and share a picture of their health data] ETF Daily August 2016

“Aetna and Apple collaborate on digital health and wellness for employers” Internal Health Management September 2016

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Electronics disruption happens fast, but not in healthcare

Timeframe: 2-5 years to lock in30+ years of dominance

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Electronics disruption happens fast, but not in healthcare

Timeframe: 2-5 years to lock in30+ years of dominance

Source: Commonwealthfund.org

Automotive shows what is coming to healthcare

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“We take steel, raw steel, and turn it into car. They have

no idea what they’re getting into if they[ Apple] get into that.” former GM CEO Dan

Akerson February 2015

1950

1960

1970

1980

1990

2000

2010

2020

2030

0%10%20%30%40%50%60%

1% 3% 4%10%

15%20%

30%35%

50%

Electron-ics and

software as per-cent

of total car cost

Apple CarPlay

Apple Titan

The new automotive supply chain will be blown wide open, and innovation is decoupled, and accelerated

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Tier 1 supplierTier 2

supplier

Tiers 3-5

Raw materials

Electronics

Components

Foundries

Raw materials

OEM (Automaker)

ODM(Device maker)

New car models every

4-7 years

New car electronics

hardware every 1 yearNew car software

every 1 month

Diamler is more concerned about Apple’s moves than GM

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“We take steel, raw steel, and turn it into car. They have

no idea what they’re getting into if they get into that.”

former GM CEO Dan Akerson February 2015

“What is important for us is that the brain of the car, the

operating system, is not iOS or Android or someone else but it’s

our brain,” “We do not plan to become the

Foxconn of Apple,”Diamler CEO Dieter Zetsche

September 205

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Agenda

Digital disruption comes to an industry near youDigital pushes traditional care past existing practicesRestructuring the digital hospital

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19th century technology is the basis for today’s hospital structure

Physiological specialties define today’s hospital

Modern hospitals began in 18th centuryDepartment specialization (and organization) started in the 19th century

When does care become about data and analysis as opposed to doctor’s specialty?

Cardiology

Ear, nose, and throat

Dermatology

Gastroenterology

Ophthalmology

Psychiatry

Endocrinology

Neurology

Pulmonology

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Digital threatens to transform every conceivable arena

Exam

Decision-making

Location

Source: Lux Research

Arena

Hospitals

Data security

Data storage

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Digital threatens to transform every conceivable arena

Past

Exam

Decision-making

Location

Cybersecurity

Centralized repository

Doctor

Centralized

20th Century

Source: Lux Research

Arena

Hospitals

Data security

Data storage

Qualitative symptoms

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Digital threatens to transform every conceivable arena

Past Future

Exam

Decision-making

Location

Cybersecurity IoT Security

Centralized repository Blockchain

Data

Doctor AI

Centralized Distributed

20th Century 21st Century

Source: Lux Research

Arena

Hospitals

Data security

Data storage

Qualitative symptoms

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Agenda

Digital disruption comes to an industry near youDigital pushes traditional care past existing practicesRestructuring the digital hospital

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Gastroenterology

A “digital” hospital is organized differently

Cardiology

Ear, nose, and throat

Dermatology

Gastroenterology

Ophthalmology

Psychiatry

Endocrinology

Neurology

Cardiovascular disease

Skin cancer

Diarrhoeal disease

Visual impairment and blindness

Epilepsy

Depression

AsthmaLung cancer

Parkinson’s disease

Diabetes

Infertility

Pulmonology

Deafness and hearing loss

Data-driven hospital departments:

MonitoringDiagnosticsPredictive analyticsTherapeuticsAssistive technologyBehavior augmentation

DPATATBA

M

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Predictive analytics connections link previously disconnected conditions

Cardiovascular disease

Skin cancer

Diarrhoeal disease

Visual impairment and blindness

Epilepsy

Depression

AsthmaLung cancer

Parkinson’s disease

Diabetes

Infertility

Episodic condition

Predictive Analytics

Deafness and hearing loss

Prediction based on environmental factors

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Behavior augmentation solutions are most common

MonitoringDiagnosticsPredictive analytics

TherapeuticsAssistive technology

Behavior augmentation

Cardiovascular disease

Skin cancer

Diarrhoeal disease

Visual impairment and blindness

Epilepsy

Depression

AsthmaLung cancer

Parkinson’s disease

Diabetes

Infertility

Deafness and hearing loss

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Monitoring- Temperature sensing becomes a core capability

Fertility tracking

Breast cancer screening

Epileptic seizure prediction

Childhood development

Takeaways

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Intervention

Referrals

Appointments

Symptoms

Prevention

Assistive/ Treatment

Prediction

Monitoring/ Diagnostics

Healthcare ElectronicsData-driven healthcare will upset quality of care and the patient experience, forcing existing providers to compete in ways far outside of core competenciesThere will be room for both data and medical expertise, but how quickly does each evolve, how do they share profits?

Thank you

Lux Research Inc 100 Franklin St. 8th Floor Boston, MA 02110

Jon Melnick, Ph.D.Senior Analystjonathan.melnick@luxresearchinc.com