Welcome to the World of Game Changing Healthcare Technologies

 

PRESENTER
Greg Caressi
Senior Vice President
Healthcare & Life Sciences
Frost & Sullivan





SESSION
Analyst Greg Caressi digs deeper into the changes happening within the medical technology market. The healthcare sector needs to extend beyond advancing clinical standards of care to address the high costs plaguing the industry. This can be attributable to catastrophic care bankrupting individuals and the health system; hospitals facing insolvency; the need to change processes of care delivery; and information systems and management not delivering appreciative value to clinicians. Following what the healthcare sector is doing to overcome these issues, Caressi identifies five transformations driving opportunities in healthcare:

• Wellness, prevention and reducing the impact of chronic disease
• Re-imagining care delivery and looking at the process of getting clients and care providers adjusted to implementing new technologies
• Facilitating a change from hospital-based consumer roles to consumer roles in smaller clinic environments.
• Moving from product to platform—selling technologies and solutions
• Patient-centered outcome models that add value while driving incremental and distinctive innovation

TAKE-AWAY
Identify key technologies impacting the industry of today as well as tomorrow. Focus on patient-centered, value-based models for efficient, cost-saving solutions

BEST PRACTICE
The following transformations become game-changers in medical technologies:
1. Innovating chronic care approach

• Improves outcomes, lowering system and per-member per-month (PMPM) cost
• Supports cost of care innovations and outcome-based incentives in vendor contracts.
• Extends solutions outside of the hospital setting
• Extends solution models to primary care, home-based interactions and IT solutions to identify and track at-risk individuals

2. Better use of staff

• Chronic disease management requires more interaction with patients at a lower cost, requiring the use of advanced technology and lower-cost clinical personnel
• Chronic disease management strategies: Rigorous process for patient management and care protocols
• Going digital: Preventive care and remote diagnostic models require the use of technology solutions to enable scalability
• Role of new participants
• Proactive patient interaction strategies, new tools and processes, and new vendor and stakeholder partners

3.  Re-imagining care delivery

• Scalability
• Capitated hi-quality care modules require financial viability.
• Department management
• New approaches to improve efficiency in surgical suite, catheterization lab, imaging services, infant / pediatric care, ER, etc.
• Decision support
• Automating non-critical decisions and documentation that take up significant time and add a resource burden
  

4.  Building the ecosystem

• Forming partnerships with a range of stakeholders, vendors, patients and families, analytics service providers, and supply chain
• Process change
• Care coordination and collaboration. Includes initializing artificial intelligence and automation to speed processes, digest information and reduce labor costs and human error
• New revenue focus
• Wellness services, direct contracting with employers and tech innovation co-development with vendors.

5. Changing customer roles

• Rethink the consumer: Beware of disruptions to business on a macro level.
• Identify the target: Rethink and expand target audience, also within same provider organization. Approaches to consider: adaptive and holistic care models.
• Value to individuals
• Patients are no longer passive participants. The patient may not be a direct consumer while still retaining the status of key user
• Role of new participants
• Extend reach to new competitors and partners as the value of analytics, customer relationship management, patient interaction, stakeholder collaboration and service delivery models increase.Provider consolidation
• Consolidation among providers is changing the volume and scale of relationships. Larger providers will likely look to scale back on number of vendors
• Viability of “As a Service” solution and smaller customers
• Small and mid-size providers will increasingly move to a pay-as-a-service model as vendors move toward service/solution models
  

6. Moving from product to platform

• Data vs. information: Value is not derived from data collection, but in the conversion to insight and change in behavioral process
• Security: Eliminate potential data leaks. Insecurity is one of the major impediments to large scale deployment of analytics and connected platforms
• Building the ecosystem: Forming partnerships with key stakeholders is critical
• Decision support: Automating non-critical decisions and documentation, and providing artificial intelligence support to make sense of increased volume of lower-value data
• Monetization strategies: Failure to define monetization models have become key factors behind majority of market exits
• Integration is king: Institutions and consumers will increasingly value integrative solutions that reduce fragmentation of information and processes

ACTION ITEM

The healthcare sector must implement methods of engaging the patient and initiating behavioral change. This will involve many partners and technologies outside of the industry itself. Healthcare will also need to better understand what the patient wants. There are many individualized and customer relationship solutions that must be cultivated.

Healthcare provider organizations are just now beginning to focus on the process of team-based care and learning how to put their staff to better use. Some models promote adding more staff at a lower cost but in the end, re-engineering healthcare means utilizing people in different ways and bringing in technology solutions to help reduce costs. Additionally, lower-paid staff isn't a practical solution to lower healthcare costs.

TAKE-AWAY
Create frameworks to track technologies and competitors in a converging world.

BEST PRACTICE

The last transformation--value-based/patient centered outcome-based models driving incremental and disruptive innovation--first surfaced in 2013. One model is the accountable care contract (ACO), authenticating the change of payments into the category of costs and recognizing that cost is now a potential savings. 

ACTION ITEM
Key lessons learned in recent years:

• ACOs are part of the shift from volume to added-value
• Medical technologies vendors would benefit from exploring outcome-based contracts with providers and payers

TAKE-AWAY
Insight into multi-billion dollar opportunities arises out of the serendipitous tech convergence with high-quality, lower-risk patient care.

BEST PRACTICE  

Technology adaptation will become more valuable when factored into an integrated model. The consumer is not the last evaluator. Committees are being formed to assess how an information solution can be a tool of change throughout organizations, not just a technology solution.
Risk-sharing drives partnerships so the model is no longer treating sickness but preventing it.
 

ACTION ITEM
Look at longer-term relationships and ecosystem partners both within and outside the healthcare sector. Technology companies need to restructure to address market disruptions.
Restructuring points include:

• Inevitable commoditization
• Broader portfolios provide greater flexibility for bundling
• Shredding products with low margins, high competition
• Own entire value chain
• Optimize distribution and sales channels 
• Tax inversion / financial tools

• Honing focus
• Streamline portfolio towards high value, high growth segments 
• Shift away from solutions anchored to fixed reimbursement levels 
• Align R&D, M&A strategies, internal competencies with core focus areas

• Expanding scope and scale
• Build information and services platform around products
• Develop offerings targeting entire disease continuum
• Tier solutions for different use cases, payment models
• Delineate luxury and base offerings (i.e. the Toyota-Lexus model)

FINAL THOUGHT
There are many ways healthcare technologies and direct care solutions can leverage innovation and create new thought around driving up value and lowering costs.