1. Healthcare Unbound: How Close Are We to a Tipping Point? Opening Keynote Presentation July 2007 San Francisco, CA Vince Kuraitis JD, MBA Better Health Technologies, LLC http://e-CareManagement.comhttp://e-CareManagement.com blog (208) 395-1197

2. Whats the right metaphor for HU?

3. © www.bhtinfo.com 3 Overview I.Network Effects and HU Markets II.How Close Are We To A Tipping Point? A.No Sightings B.Remote Patient Monitoring (RPM) C. Medicare Disease Management D. Personal Health Records (PHRs) E. The Biggest (Eventual) Tipping Points of All Mobile telehealth Health 2.0 Hospital at Home III.Lessons Across HU Market Segments

4. © www.bhtinfo.com 4 I. Network Effects and HU Markets

5. © www.bhtinfo.com 5 Network Effects (Tipping Point) Source: Shapiro, C. Varian, H. Network Effects 1998Network Effects

6. $34 B Market for Healthcare Unbound Technologies Total Acute Chronic ADL/elder$0.35 $US (billions) $0.37$0.47$0.59$0.73$0.98$1.2$1.6$2.0$2.4$3.0$3.7 $0.10$0.13$0.22$0.38$0.65$1.2$3.8$12.1$23.1$26.3$25.7$26.7 $0.00 $0.01$0.02$0.65$2.0$3.6$3.5$3.0$3.2 $0.45$0.50$0.69$0.97$1.4$2.1$5.7$15.7$28.7$32.3$31.7$33.6 (Numbers have been rounded)

7. © www.bhtinfo.com 7 Key Questions How close are we to a tipping point in various segments of the HU market? Whats the closest thing to a sighting of a tipping occurring? Why is this important? Will HU –Remain an interesting, sexy topic for the 6 oclock news to run a feature, or –Become mainstream to health and medical care?

8. © www.bhtinfo.com 8 II. How Close Are We To A Tipping Point? A.No Sightings B.Remote Patient Monitoring (RPM) C. Medicare Disease Management D. Personal Health Records (PHRs) E. The Biggest (Eventual) Tipping Points of All Mobile telehealth Health 2.0 Hospital at Home

9. © www.bhtinfo.com 9 II A. No Sightings EHRs Telemedicine Niche apps (few network effect markets)

10. © www.bhtinfo.com 10 II B. Remote Patient Monitoring (RPM) Bottom line: 2008 could be a breakthrough year for RPM

11. © www.bhtinfo.com 11 2008 could be a breakthrough year for RPM Continua begins to address major challenges –Interoperability of devices –Pricing (indirectly) But other challenges remain –IT/integration –Reimbursement/business model –Licensure/regulatory issues

12. © www.bhtinfo.com 12 II C. Medicare Disease Management Bottom line: – One year ago a tipping point (Medicare Health Support) was on the horizon – Today, its back to square one – Market shift toward integration of care providers

13. © www.bhtinfo.com 13 Medicare DM: Virtually No Evidence of Success Medicare Health Support appeared to be the favorite son demo to expand DM into Medicare –MHS has attracted worldwide attention –Legislation requires roll out if successful Elements of MHS model –Focus on highest cost/risk population (frail elderly) –Disease management -- carve out to private companies & health plans ( vs. CCM) –Guaranteed 5% savings business model –Short term ROI –Randomized control trial Results to-date: virtually no evidence of success. See http://e- caremanagement.com/first-official-report-on-medicare-health-support-dm-pilot- finds-virtually-no-evidence-of-success/ http://e- caremanagement.com/first-official-report-on-medicare-health-support-dm-pilot- finds-virtually-no-evidence-of-success/

14. © www.bhtinfo.com 14 The Cats are Herding: Medical Home Model Gaining Momentum

15. © www.bhtinfo.com 15 The Medical Home Incorporates HU Tech & Apps Proposed payment framework for the Medical Home model includes $$ for: –coordination of care –health information technology –secure e-mail and telephone consultation; –remote monitoring of clinical data using technology. Medicare Medical Home Demonstration

16. © www.bhtinfo.com 16 Medicare Medical Home Demonstration (MMHD) December 2006 – Congresses passes MMHD MMHD similarity to MHS: high cost, chronic patients; multiple comorbidities MMHD differences from MHS –No requirement of 5% guaranteed savings –Physicians can keep 80% of savings

17. © www.bhtinfo.com 17 II D. Personal Health Records (PHRs) Bottom line: – Despite significant activity, the current PHR market is fragmented with no tipping point in sight – BUT.....Google Health is a wildcard!

18. © www.bhtinfo.com 18 PHR Background 2 models of PHRs –Stand alone –Tethered: typically to a health plan, provider, employer Each has challenges The populating the PHR with data problem 200 PHRs on the market Generations of PHRs –1st generation: PHR as APPLICATION -- an online repository of personal health information (PHI) –Next generation – PHR as PLATFORM

19. © www.bhtinfo.com 19 Source: Markle Foundaton A Common Framework for Networked Personal Health Information, 2006.A Common Framework for Networked Personal Health Information See also: RWJF Project HealthDesign A New Vision for Personal Health Records, May 2007A New Vision for Personal Health Records

20. © www.bhtinfo.com 20 Google Health– A Next Generation PHR (detective work and tea leaf reading) The Current Market Structure for Personal Health Information (PHI). Your PHI is –Scattered everywhere –Not in standardized formats suitable for a global information economy Elaboration: http://e-caremanagement.com/connecting-the-dotsgoogle- health-promises-to-create-and-dominate-next-generation-phrs/ http://e-caremanagement.com/connecting-the-dotsgoogle- health-promises-to-create-and-dominate-next-generation-phrs/

21. © www.bhtinfo.com 21 GHs Anticipated Technology Model –Patient centric –A personal health URL –Automated data mechanisms to gather and store PHI –Interoperable technical standards: XML and the Continuity of Care Record (CCR) standard Continuity of Care Record (CCR) –A user interface –Appropriate security and confidentiality measures –Value added functionality (over time)

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23. © www.bhtinfo.com 23 Three Potential Leverage Points –A GH platform could simultaneously create AND dominate next generation PHRs. –Google Health promises to overcome the populating the PHR challenge Automated data feeds The Continuity of Care Record standard as the MP3 of PHI –Potential for rapid, dramatic network effects

24. © www.bhtinfo.com 24 II E. The Biggest (Eventual) Tipping Points of All Mobile Telehealth –60+ companies –Possible tipping point sighting: LifeComm (2008) Health 2.0 Hospital at Home

25. Hospital at Home Dates Back to the 1960s

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27. © www.bhtinfo.com 27 Current HU Tech & Apps Are A Collective Platform to Support HAH EHRs Telemedicine Niche apps Remote Patient Monitoring Disease Management Personal Health Records Mobile telehealth Health 2.0 Etc Hospital At Home

28. © www.bhtinfo.com 28 What would happen at your company if someone said: We adjusted last years market numbers and concluded we were off by $140 Billion.

29. © www.bhtinfo.com 29 Elaborate Proof of a Hypothesis..... The Willie Sutton Theory of Hospital-At-Home Projected 2014 U.S. Annual Hospital Costs = $1 TrillionProjected Projected HU 2015 market of $34 B = 3.4% 1.14 3.0%

30. © www.bhtinfo.com 30 III. Lessons Across HU Segments

31. © www.bhtinfo.com 31 We are interdependent –Importance of HIT Interoperability Transportability of PHI –Integration of care providers Are PHRs are the best candidate for a common technology platform? The issue isnt whether HU succeeds, its when Actions –Support the Continuity of Care Record standard –Join Continua

32. Whats the right metaphor for HU?

33. © www.bhtinfo.com 33 END

34. © www.bhtinfo.com 34 Better Health Technologies, LLC Technology and health care delivery are shifting: –From: Acute and episodic care delivered in hospitals and doctors offices –To: Chronic disease and condition management delivered in homes, workplaces, and communities BHT provides consulting, business development, and speaking services to assist companies in: 1) Understanding the shift 2) Positioning – whats the right strategy, tactics, and business model? 3) Integrating your offering into the value chain – what are the right partnerships?

35. © www.bhtinfo.com 35 BHT Clients Pre-IPO Companies HealthPost Cardiobeat EZWeb Sensitron Life Navigator Medical Peace Stress Less DiabetesManager.com CogniMed Caresoft Benchmark Oncology SOS Wireless Click4Care eCare Technologies The Healan Group Fitsense Elite Care Technologies Established organizations Intel Digital Health Group Samsung Electronics, South Korea -- Global Research Group -- Samsung Advanced Institute of Technology -- Digital Solution Center Medtronic -- Neurological Disease Management -- Cardiac Rhythm Patient Management Amedisys Siemens Medical Solutions Philips Electronics Joslin Diabetes Center GSK Disease Management Association of America PCS Health Systems Varian Medical Systems VRI Washoe Health System S2 Systems CorpHealth Physician IPA Centocor