tie healthcare technology innovation zen chu

Healthcare Information TechnologyInnovation & Opportunities

The Indus EntrepreneurTiE Boston Symposium

Microsoft New England July 2009

Zen ChuAccelerated Medical Ventures

ZEN @ ACMEDX.COM

Unique Healthcare Mission & Business

• Safety & Effectiveness Paramount• Evidence-Based Outcomes• Regulatory & Reimbursement Barriers• Cost-effective to society• Alignment of 4 P’s & Big G– Patients– Payers– Providers– Products– Goverment

Multiple CustomersWho Pays?

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Products & Services

Drugs, Medical Devices, Capital Equipment

Software, Services

Patients vf

Healthcare Players

PayersInsurers, Employers, Medicare

ProvidersPhysicians, Hospitals, Nursing Homes

Procedures

$$$

Information Asymmetries Confound Best Practices© zen@acmedx.com

Healthcare Delivery Value ChainComplex Value Chain Across Disease Cycle

Source: Porter & Teisberg, Redefining Health Care© zen@acmedx.com

US Healthcare Spending 2007$2.3 Trillion, 15.2% GDP

31%

21%10%

8%

7%

23% Hospital Care

Physician ServicesPharma

Nursing Homes

Admin Costs

OtherDevices, DiagnosticsPharmacy, etc

Source: PHRMA Annual Report 2008© zen@acmedx.com

Sources of Healthcare Dollars

Health Care Cost InflationPassed Along Value Chain Without Cost Controls

Source: McKinsey Global Institute

Who Aligned To Manage Wellness?

Source: Clayton Christensen, Innovator’s Prescription

Fragmentation & Scalability ChallengesGeography, Specialty, Disease State

700 Payers

5700 US Hospitals

Medical Product Companies

Negotiated Payments & Pricing Among Each Player & Region

© zen@acmedx.com

Successful Products & Services Pattern

• Prove Effective Therapies for Right Patient– Unmet Medical Need– Remove treatment ambiguity– Improve Standard of Care– Comparative Effectiveness

• Prove it quickly & efficiently• Productivity = Save Physician Time• Reduce Patient Pain• Enable New (Cheaper) Provider & Venue• Intellectual Property (Patents, trademarks, brand)• Lower Cost

Necessary But Insufficient

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Healthcare Information TechnologyChallenges

• HIT under-invested vs other industries– 2.2-3.8% IT/Total Operating Expense (HIMSS)– 50% less gross revenue investment than banking

(Gartner)

• Spaghetti code & lack of standards• Privacy & security costs• Technology cost inflation under microscope

… But strong case for HIT as Quality Driver Obama’s $19B HITECH Funding

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Enabling New Business ModelsNEW MODEL EXAMPLE

• New Device SonoSite Ultrasound• New Workflows e-Prescribing• Payment Services Athena Healthcare• Collective Knowledge Sermo Social Network• New Therapies Image-Guided Therapy• Direct to Consumer iPhone Disease Management• Outsourcing O2i Teleradiology• Decentralization In Home Warfarin Testing• Pay 4 Performance Cerner• Bundling Episode-Based Pricing• Unbundling Bluetooth BP reporting

© zen@acmedx.com

Additional Reading• Viswanathan, Vijay. “Special Report: Medicine Goes Digital.” The Economist 16 April, 2009.• Gawande, Atul. “The Cost Conundrum.” The New Yorker 1 June, 2009.• Gawande, Atul. Complications: A Surgeon’s Notes On An Imperfect Science. 2002, Picador.• Center for Accelerating Medical Solutions. Investing in Innovation: Accelerating Disease Research Through

Philanthropy and Business. www.fastercures.org, 2005.• Chesbrough, Henry. Open Business Models. 2006, Harvard Business School Press.• Christensen, Clayton. The Innovator’s Dilemma. 1997, Harvard Business School Press.• Christensen, Clayton, et al. Seeing What’s Next. 2004, Harvard Business School Press. • Megantz, Robert. How to License Technology. 1996, John Wiley & Sons.• Moore, Geoffrey. Crossing the Chasm. 1991, HarperCollins.• Porter, M. and Teisberg, E. Redefining Healthcare: Creating Value-Based Competition on Results. 2006, Harvard

Business School Press. • www.thehealthcareblog.com• www.health2con.com• www.himss.org• http://www.economist.com/specialreports/displaystory.cfm?story_id=13437990• http://cimit.typepad.com/cimit_forum_blog/2008/05/zen-chu-slides.html• http://cimit.typepad.com/cimit_forum_blog/2009/04/the-new-economic-playbook-for-healthcare-development.

html

© zen@acmedx.com

Healthcare Information TechnologyInnovation & Opportunities

Panel Discussion

Prof. Bhaskar Chakravorti Harvard Business School, McKinseyZen Chu Accelerated Medical VenturesPam Randhawa Sermo, Inc.Joseph Ternullo Partners Healthcare

Center for Connected Health