monetizing the future: business model...
TRANSCRIPT
Monetizing the Future: Business
Model Transformation in
Healthcare
Digital health technologies and value based
reimbursement spur new opportunities
December 2016
2
Advanced Woundcare Market Update
3 <0000-00>
Global Woundcare Market Value Based Care Transition, Opens the Door For New Services & Solutions
How big is the market and how fast
is it growing?
Revenue
($ Billion)
Growth
Rate (%)
2016 16.8
2017 17.3 3.2
2018 17.8 3.4
2019 18.4 3.4
Region: Global
Global Woundcare Market Revenue Share by Sector, 2016
Wound Cleansers and Debriding
Agents 7%
Dry Gauze 8%
Film Dressings 3%
Hydrocolloids 5%
Traditional Adhesive
18%
NPWT 11%
Wound Closure 21%
Alginates 2%
Hydrogels 1%
Skin Grafts & Substitutes
4%
Foam Dressings 6%
Non-Adherant 6%
Biomaterials 2%
Other 6%
Acelity 22%
Smith & Nephew
19%
Molnlycke 12%
Convatec 8%
Coloplast 4%
Medline 2%
3M 3%
Other 30%
Global Advanced Woundcare Market
Revenue Share by Competitor, 2016
*Red highlight denote
Advanced Woundcare
market segments
“What was once a payment is now a cost. What was
once a cost is now a potential savings.”- Hospital CEO
• Where is it Performed?
• Who Performs it?
• What is Tracked/Measured/ Documented?
• How is it Paid for?
Opportunities
For Business Model
Transformation
In
Woundcare
Source: Frost & Sullivan Research
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Market Snapshot U.S. Election and 21st Century Cures Act Alter Market Landscape
MACRA
In The
News
Industry
Shifts
• Chronic Care Management
Focus
• Codes for Mobility Related
Disability
• Screening
• Election/ New HHS and CMS heads
• Device Tax/ Cadillac Tax
• 21st Century Cures Act
• Consolidation
• Products to Services
• Patient Education
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Market Snapshot Europe New Rules Transform Regulation to be More like the FDA
Regulatory
In The
News
Industry
Shifts
• Stricter Requirements ( High
Risk)
• Increased Transparency &
Traceability
• BREXIT Impact?
• NHS Modernization Initiatives
• Precision Medicine Initiatives
(France, UK, Germany)
• Product Portfolio Strategies
• Managed Care Services
(Medtronic)
• R&D Strategy
6
Digital Transformation in Healthcare
Six Big Themes for Business Model Transformation Driving Factors For Change
7 Value Based
Reimbursement
Digital Transformation of
Care Delivery
New Market Entrants
Collaboration &
Partnerships
Healthcare
Consumerism
As-a-Service Centric
Business Models
8
Community
Emergency Response Intelligence
Supply Chain
Logistics
Mobility
Automated
Kiosks
Internet of Medical Things Connectivity Enables New Opportunities for How and Where Care is Delivered
In- Home
In-Clinic
In- Hospital
Home Medical
Devices
Peripherals
Digital
Assistants
On- Body
Wearables
Implants
Smart
Devices
Activity
Monitoring
Consultations/
Coaching
Lab on a
Chip
Care
Coordination
Tech
Hand held Medical
Tech
Ambulatory
Therapies
Smart
OR
Patient
Surveillance
Connected
Equipment
Analytics/
Informatics
Storage Machine
Learning
Cyber-
security Inter-
operability
Decision
Support
The Internet of Medical Things (IoMT) entails any
ecosystem of connected medical technologies
supporting targeted health and well being
services.
(Real
time
location
system)
RTLS-
9 <0000-00>
Right Care, Right Place, at the Right Time Value Drivers in the New Healthcare Economy
Source: Frost & Sullivan
10 MA3C-18
Global Perspectives Digital Transformation Occurring in Varying Degrees within Each Region
Source: Frost & Sullivan Analysis
United States
• $200 M Precision Medicine Initiative
• 75% of large employers now offer
some form telehealth services as
part of plans (48% in 2015).
• Clarity on FDA guidelines regarding
regulation of digital health
technologies helping to accelerate
growth.
Western Europe
• Google DeepMind working with NHS in
UK on a number of health data initiatives.
• Notable start ups targeting care
coordination platforms.
• Companies like Philips, Siemens, Nokia
investing heavily in consumer digital
health.
India.
• Make in India movement, and
industry accelerator initiatives to lead
to the rise of a new breed of home
grown medical technology
developers.
• Tools are helping to bridge gaps in
care continuum.
China
• Regulatory barriers removed for
private insurance.
• Over $1.1 B in funding for digital
health start ups in 1H 2016 (Pin An
Good Doctor, Spring Rain, iCarbonX)
11
Business Model Transformation
12
Evolving Medical Device Service-Based Business Models Shifting Focus from Selling Products to Insights
Va
lue
fo
r C
us
tom
er
Near Term Mid Term Long Term
Medical Products Medical Products
Services
Medical Products
Services
Intelligence
Medical Platforms Medical Solutions
• Product-as-a-Service
• Data-as-a-Service
• Platform-as-a-Service
• Managed Services
• Insight-as-a-Service
• Automation-as-a-Service
• Robotics-as-a-Service Evidence Based Care
Real-time Outcome based Care
Predictive & Preventive Care
Artificial
Intelligence
Augmented
Reality Robotics
Wearables/
Biosensors
mHealth
IoMT
Big Data & Health
Analytics
• Sell Parts/Hardware
• Consumables/Upgrades
• Repair/ Maintenance Support
• Leasing and Buying Support
Medical Products
13
Source: Frost & Sullivan
10
9
8
7
6
5
4
3
2
1 2 3 4 5 6 7 8 9 10
Emerging Business Models in Healthcare How do you find the right model for your solution?
Customer Value Enhancement
Mo
ne
tiza
tio
n O
pp
ort
un
ity
Healthcare
Marketplace
Product/
Process
Digitization
Mass
Customization
e-Commerce/
m-Commerce
Product-as-
a-Service
Software-as-
a-Service
Platform-as-
a-Service
Data-as-
a-Service
Managed
Services
Shared
Economy
Risk-sharing
Models Crowdsourcing
Open
Source
Single Firm
Independent
Model
New
Market
Creation
Single
Product
Strategy
Disaggregation
Social
Enterprise
On-demand
Health
Healthcare Industry: Comparative Analysis of B2B and B2C Models, Global, 2016
High
High
Low
Low
B2C
B2B
Note:
• The size of the bubble represents customer outreach. These business models are not exclusive to each other.
• Some of these models represent B2B2C relationships. The ratings for the business models are relative to each other.
Traditional
Business Models
Emerging
Business Models
14
0
10
20
30
40
50
60
70
2013 2014 2015 2016 2017 2018 2019 2020 2021
Dedicated HC SmartPhones
0.1 0.1 0.1 0.1 0.2 0.3 0.4 0.6 0.9
Mobile POC Tools 0.0 0.1 0.3 0.6 1.3 2.4 4.5 7.4 12.0
Wearables 2.0 3.9 5.1 6.6 8.5 11.1 14.5 18.9 23.0
Healthcare Apps 2.8 4.1 6.6 9.9 13.0 16.8 21.4 27.0 27.9
Re
ve
nu
e (
$ B
illio
n)
Novel Point of Care Technologies Transform mHealth Innovations in Product as-a-Service Business Models
Note: All Figures are rounded. The base year is 2015; Source: **mHealth App Developer Economics 2014, 2015, Frost & Sullivan
mHealth Enabled Care Market: Revenue Forecast,
Global, 2013–2021 Mobile Point of Care Tools
Silhouette Aranz Medical
EyeNETRA’s NetraG
MobiUS SP1 System
MedWand
CliniCloud Smart Devices
Philips Lumify Withings Blood Pressure
Scout Wound Vision
15
Clinical Grade Wearables Gain Commercial Traction Novel Data and Platform as-a-Service Business Models
Medical and Clinical-Grade Wearables
Source: Frost & Sullivan
Note: The consumer health wearables segment mainly includes unregulated
wellness, fitness, and sports wearables with defined health use case(s).
2.4 3.1
3.9 5.0
6.5
8.3
10.6
1.5
2.0
2.6
3.4
4.6
6.2
8.3
0
2
4
6
8
10
12
14
16
18
20
2014 2015 2016(E) 2017(F) 2018(F) 2019(F) 2020(F)
Rev
en
ue (
$ B
illio
n)
Healthcare Wearables Segment: Revenue Forecast, Global, 2014–2020
Medical and Clinical-Grade Wearables
Consumer Health Wearables
Other Wearables
16
Artificial Intelligence Systems in Healthcare: Revenue
Forecast, Global, 2013–2021
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenue 507.0 633.8 811.1 1,065 1,438 2,002 2,882 4,298 6,662
Re
ve
nu
e (
$ M
illi
on
)
Year
Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan
Artificial Intelligence Systems Automate Decision Suport Enabling Insights as-a-Service Business Models
Medical Imaging
Wellness Wearables
Ins
igh
ts
Clin
ica
l
Wo
rkfl
ow
Cognitive
Platforms
17
Business Model Innovation Case Studies
18
Medtronic’s Long Term Strategy in Diabetes Integrating Devices, Monitoring, & Machine Learning
Near Term Mid Term Long Term
Sensor-augmented Pump
Threshold/Predictive Suspend
Hybrid Closed
Loop
Artificial
Pancreas
• Minimally-invasive Insulin
Delivery Device
• Optional Sensor for CGM
• Connected devices and
biometrics
• Disease-relevant data
• Actionable insights
• Machine Learning
• Smartphone Control
• Next-gen Delivery Platform Image source: wikimedia.org, Minimed_515_2009
Image source: medtronicdiabetes.com
Foundational Device and
Sensor-augmented Pump Additional Data Sources and
Differential Analytics
Platform-based Intelligence
Solutions
Image source: medtronicdiabetes.com
Source: medtronicdiabetes.com, Investor and analyst briefing, Frost & Sullivan
19
Medtronic Hospital Solutions— Managed Services Platform-based cath lab solution for hospitals in Europe
Devices
Smart Financing Model
Capital Equipment
Cath Lab & Hospital IT
Cath Lab Management & Staffing
Operational Excellence Consulting
Growth Acceleration Services
Capital Structure
Optimization
Operational
Efficiencies
Patient Access
Solutions
Till Q2 FY16, Medtronic’s Hospital Solutions business has completed 66 long-term CLMS and ORMS agreements
with hospital systems, representing over $1.5 Billion in revenue over an average span of 6 years.
Key Benefits Focus Areas
Source: Medtronic; Frost & Sullivan
20
Smith & Nephew Establishes Syncera eCommerce Enables Rep Free Sales Models
Key Components of the Rep Free Solution
Medical Device Procurement
(Smith & Nephew - Total Knee and
Hip Replacement Systems)
Hospital Staff Training
(Syncera Virtual Backtable -
Rapid Surgical Staff Learning)
Process Automation
(Syncera TrayTouch - Advanced
Tray Analytics for OR)
1 2 3
21
OPM—Mass Customization Leveraging 3D Printing to Personalize Medical Implants
Cranial
Facial Shoulder
Reconstruction
Spine Rib Replacement
Spacer for
Knee
Infection
Osteotomy Wedge Small Bones Foot
Small Bones
Hand
Acetabular
Cup
Ankle Reconstruction
Share patient’s imaging
(MRI or CT scan) for
custom solutions
Surgeon
Collaboratively design desired
implant using OsteoFab®
proprietary 3D-printing process
OPM’s OEM Services for Medical Device Implants
OPM’s Turnkey Contract Manufacturing Services
Range of OPM’s Custom-made 3D Implants
Shipped within 5 days of receipt of STL file
Imp
lan
t M
an
ufa
ctu
red
at
OP
M’s
Sit
e
Shipped within weeks to surgeon
OEM Client’s
Engineering Team
Selects approved design
files from OPM’s
OsteoFab® Platform
Determines manufacturability
and provides a price quotation
for your review
FDA Approved
Image source: Thinkstock, press kit. Source: OPM; Frost & Sullivan OPM (Oxford Performance Materials)
22
Apixio—Insights as a Service Using Machine Learning to Enable Predictive & Prescriptive Care
Medical/Rx claims
Clinical documents
(EHR)
Clinical documents
(Scanned/Faxed)
Patient Care
Profiles
Quality Profiler
and Patient
Attribution
Extraction
Personalized
Appropriate
Care Results
Patient
Registry or
Certified
Engine
ACO & CMS
Value-based
Payment
MA Star
Ratings
Pay for
Performance
Population
Health Mgmt
Larger Bonuses
Accurate Score
Accurate Score
Better Payment
Accurate Alerting
Higher Compliance
Accurate Score
Better Payment
Quality Measurement Use Cases
EB Protocol
Computation Utilization
Mgmt
Decision
Support
Provider
Performance
Care Mgmt.
Workflows
Retrospective
Analysis
Prospective
Analysis
Prospective
Analysis
Retrospective/
Prospective
Analysis
Computable EBM Use Cases
Data Acquisition & Processing Adaptive and Learning-based Analytics Use Case by Applications
1
2
Monetization
Model
• Subscription based
• Pay as you go
• Performance based
Source: Apixio Inc.; Frost & Sullivan
23
Healint – Innovation Happening Across the Globe Global Platform for Patient Monitoring, Research and Clinical Data (Singapore)
Source: Healint; Frost & Sullivan
Operating Model
Chronic Disease Management Research and
Development
Institutes
Dashboards
Monitoring Devices
Inputs - Vitals signs
B2B
Inputs - Data
Academic
Healthcare
Provider
B2C
Healint app
available on
Apple Store
Actionable Insights
Inputs - Data
Active input by
physician
1
2
3
4
Population
study
24
Digital Woundcare Opportunities
25
Source: Frost & Sullivan
Current Wound Treatment
Paradigm
Integrated Wound Management
• Outcomes Tracking
• Best Practices
Data Driven Healthcare
• Efficient Communication
• Patient Transition
Care Co-ordination/Monitoring
• Wound Bed Preparation
• Healing
Treatment
• Right treatment
• Right Patient, Right Time
Diagnosis/Detection
• Patient Engagement
• Prevent Recurrence
Prevention Inefficent:
• Standardized Protocols
• Clinical Coordination
• Understanding of True
Patient Impact
Integrating Wound Management Coordinated Care Facilitation the Key to Service Based Solutions
26
Innovation Opportunities Technology Enabled Solutions to Optimize the Clinical Workflow
Innovation
Opportunities
Deep Tissue Injury
Detection
Point of Care
Diagnostics
Healing Technologies
Biosensors
Next Generation
Mechanical/ Energy
Devices
Clinical
Algorithms
Outcomes
Tracking
Risk Stratification
Tools
Source: Frost & Sullivan; Image Source: http://imageresource.gilcommunity.com/
Data-driven Best
Practices
Ca
re
Co
-ord
ina
tion
27
Digital Health in Wound Diagnostics Innovative Point of Care Tools Help Track Wound Healing
28
Digital Health Support in Wound Care Workflow Digital Tools Help Connect a Fragmented Clinical Environment
29
Conclusion
30
Business Model Flaws
Over Engineered – Unnecessary Device
Complexity
Lack of Interoperability
Security Vulnerabilities
Unreliable/ Inaccurate Data
Targeting the Wrong Customers
6 Common Points of Failure in Digital Health Solution
Key Areas of Market Failure
Source: Frost & Sullivan Analysis
31
For Additional Information
Venkat Rajan Global Research Director: Visionary Healthcare
(210) 247-2427
Diana Bragg Strategic Account Manager: Transformational
Health
(210)-247-3825
32
Appendix-
Supplementary Analysis & Case Studies
33
Making the Transition from Reactionary to Predictive &
Proactive Care Intervention
Analysis
Data Collection
Comprehension
34
Precision Medicine Involves More than Just Genomics
Clinical
Factors
Real-Time
Monitoring
Factors
Exogenous
Factors
Omics/Dx
Factors
• Reduce adverse
drug reaction
(ADRs)
• Reduce Ineffective
prescriptions and
treatments
• More accurate and
rapid determination
of response to
therapy
• Patient-
empowerment
• Enhanced data for
future scientific
discoveries
• More effective and
safer therapeutics
• More precise
predictions of
diseases
• Earlier disease
detection
• Shift to more
patient-centric care
• Increased value-
based care
• New monetization
opportunities
Functions Benefits Precision Medicine
Patient
Source: Frost & Sullivan
35
Validic API— Interoperability Bridging the interoperability gap between healthcare companies and digital health technologies
On-body/
In-home/
RPM Home
Medical
Devices
Peripherals
Wearables
Implants
Health
Apps
Activity
Monitoring Other
mHealth
Solutions
Pu
sh
es S
ca
tte
red
an
d
Unsta
nd
ard
ize
d D
ata
Pu
lls A
ggre
ga
ted
an
d S
tan
dard
ize
d
Rele
va
nt H
ea
lth
Data
Health Systems
& Providers
Wellness
Companies
Payers
Pharmaceuticals
Cloud-based Technology
Platform:
Standardizes and normalizes the
data in an easily digestible format
1 2
Clinical, Fitness, and Wellness
Data from Non-hospital Settings
Source: Validic; Frost & Sullivan
36
Medtronic Hospital Solutions— Managed Services Platform-based cath lab solution for hospitals in Europe
Devices
Smart Financing Model
Capital Equipment
Cath Lab & Hospital IT
Cath Lab Management & Staffing
Operational Excellence Consulting
Growth Acceleration Services
Capital Structure
Optimization
Operational
Efficiencies
Patient Access
Solutions
Till Q2 FY16, Medtronic’s Hospital Solutions business has completed 66 long-term CLMS and ORMS agreements
with hospital systems, representing over $1.5 Billion in revenue over an average span of 6 years.
Key Benefits Focus Areas
Source: Medtronic; Frost & Sullivan
37
physiQ - Personalized Predictive Analytics Solution
Transform patient’s
multivariate data set into
personalized health and
wellness index.
Cloud-based Personalized
Predictive Analytics Platform
Physician remotely access personalized
health index and provide personalized
consultation/medication
Wellness professional leverages fitness
index to personalize activity and diet
Healthcare Providers and
Payers
Partnership with OEMs/Software Providers
B2
B2
C
B2
B
Feedback
1 2 3
Consumer wearables OEMs Clinical Wearables OEMs
B2B
Consum
er
Devic
e +
phys
iQ
Pre
dic
tive A
naly
tics P
latf
orm
Solu
tion
Clinical Device + physiQ
Predictive Analytics
Platform Solution
Marketing Channels
Direct
Indirect
FDA 510k-cleared
Source: physiQ; Frost & Sullivan
DaaS Business Model - Transform and personalize multivariate data set from wearables/sensors